The paper provides an empirical analysis of inflation persistence in one of the inflation targeting countries, the Czech Republic, using 412 detailed product-level consumer price indexes underlying the consumer basket over the period from 1994:M1 to 2005:M12. Subject to various sensitivity...

The chapter claims that monetary authorities’ conservatism is needed to improve the macroeconomic performance, the more so the higher the degree of product market competition. Contrary to a widespread belief, central bank conservatism and market competition are complements, rather than...