This chapter reviews the theory of optimal monetary stabilization policy in New Keynesian models, with particular emphasis on developments since the treatment of this topic in Woodford (2003). The primary emphasis of the chapter is on methods of analysis that are useful in this area, rather than...

This article presents the alternative goals of the central bank during the realization of the economic policy. The central bank can set the inflation or the economic cycle. Highly independent central banks (European Central Bank, Czech National Bank etc.) set the inflation, it means they...

This paper deals with the inflation targeting regime in the Czech Republic. The study argues that inflation targeting is a monetary policy strategy that can be adopted by the central banks in more advanced transition economies. A dynamic model of inflation targeting in the Czech Republic is...