A Dynamic Approach to Inflation Targeting in Transition Economies

ZEI Working Paper No. B00-11

54 Pages Posted: 30 Oct 2000  

Lucjan T. Orlowski

Sacred Heart University - John F. Welch College of Business

Date Written: August 2000

Abstract

This study views inflation targeting as a viable monetary regime for more advanced transition economies. A dynamic approach to the trajectory of disinflation and to the flexibility of direct inflation targeting is presented in the context of achieving monetary convergence to the EU/AMU. The candidate countries are advised to begin from strict inflation targeting and to follow with a more flexible inflation targeting regime before they establish a necessary 'foundational credibility' and monetary stability. These steps, ultimately followed by a euro-peg, are necessary in preparing for accession to the eurozone. The early experiences of the Czech Republic and Poland with inflation targeting are examined.

JEL Classification: E32, E52, P33

Suggested Citation

Orlowski, Lucjan T., A Dynamic Approach to Inflation Targeting in Transition Economies (August 2000). ZEI Working Paper No. B00-11. Available at SSRN: https://ssrn.com/abstract=248130 or http://dx.doi.org/10.2139/ssrn.248130

Lucjan T. Orlowski (Contact Author)

Sacred Heart University - John F. Welch College of Business ( email )

5151 Park Avenue
Fairfield, CT 06825
United States
203-371-7858 (Phone)

HOME PAGE: http://www.sacredheart.edu/ltorlowski.cfm

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