Publication detail

Ten Years of Czech Inflation Targeting: Missed Targets and Anchored Expectations

Author(s): doc. Mgr. Tomáš Holub Ph.D.,
Ing. Jaromír Hurník Ph.D.,
Type: Articles in journals with impact factor
Year: 2008
Number: 6
ISSN / ISBN: ISSN 1540-496X
Published in: Emerging Markets Finance and Trade, vol. 44, no. 6 (November/ December), str. 59-79
Publishing place:
Keywords: Inflation targeting, inflation expectations, expectations’ surveys
JEL codes: E31, E52, E58
Suggested Citation:
Grants: IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: This paper focuses on the first ten years of experience with the Czech inflation targeting regime. Under this regime, the Czech Republic has successfully achieved disinflation. However, there were two periods of substantial inflation target undershooting and economic slack, related to two episodes of sharp exchange rate appreciation. Dealing with exchange rate volatility has been a key challenge for inflation targeting in the Czech Republic. In spite of the missed targets, though, the regime has been successful at anchoring inflation expectations of analysts and firms close to the announced targets, suggesting that it has worked well as a nominal anchor for the economy.


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