Work detail

Reaction Functions of the CNB and the NBS

Author: Bc. Michal Miklovič
Year: 2005 - summer
Leaders: PhDr. Michal Hlaváček Ph.D.
Work type: Bachelors
Language: English
Pages: 41
Awards and prizes: B.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance
Abstract: The objective of this bachelor thesis is to estimate reaction functions capturing the systematic parts of monetary policies conducted by the CNB and the NBS after they abandoned fixed exchange rate regimes in the second half of 1990s. Following an examination of the past actions of the banks two appropriate specifications of the reaction functions are proposed. The results indicate that the CNB took into account expected future inflation development as well as contemporaneous performance of the economy when setting its monetary policy instruments. The NBS did not commit itself to reaching specific values of inflation and due to this absence of a clear strategy we are not able to model the systematic part of the NBS monetary policy.
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