This paper presents a model of inflation in developing economies and makes uses of it to evaluate macroeconomic policy in those countries. We see cross-sectoral interactions between demand and supply side forces as central and show that the standard macroeconomic policy recommendations of...

We estimate monetary policy rules for six Central and Eastern European Countries (CEEC) during the period when they prepared for membership to the EU and monetary union. By taking changes in the policy settings explicitly into account and by splitting up the exchange rate impact into two...

When the first phase of the crisis focused primarily on the interbank market volatility, the second phase spread on the instability of public finance. Although the overall stance of public finances of the new members is better than the old member countries, the differences within the new group...

Monetary policy in CEE is an important determinant in the wage bargaining process, because trade unions have to predict inflation as one component of future real wages. This paper scrutinizes whether countries in CEE that officially announce an inflation target are tempted to act...

This Chapter presents an overview of the fundamental goals and economic effects of divergent strategies applied by the six leading EU candidates, namely Poland, the Czech Republic, Slovakia, Hungary, Slovenia and Estonia. The general assumption is that the applicants with well-developed and...

This paper considers whether the adoption of inflation targets for Hungary, an emerging market economy, is a desirable option. We consider the qualitative and quantitative pre-conditions required for the successful adoption of inflation control objectives. Although it is found that the National...

In July 2011, Uganda reformed its monetary policy framework citing “challenges of macroeconomic management and the rapid growth and diversification of the financial system” MPC July (2011). This paper reviews the effect of foreign exchange interventions on the inflation target policy in...

Higher than average Price-to-Earnings (P/E) ratios and Cyclically-Adjusted Price-to-Earnings (CAPE) ratios have been tolerated by investors recently on the basis of low interest and inflation rates. This white paper debates how much premium should be acceptable using an inverse percentile-based...

The aim of the present paper is to provide criteria for a central bank of how to choose among different monetary-policy rules when caring about a number of policy targets such as the output gap and expected inflation. Special attention is given to the question if policy instruments are...