Inflation-targeting central banks have a respectable track record at explaining their policy actions and corresponding inflation outturns. Using a simple forward-looking policy rule and an assessment of inflation reports, we provide a new methodology for the empirical evaluation of consistency...

The introductory paper defines three stages of Czech inflation targeting and defines possible factors behind inflation deviations from inflation targets in 1998-2007. The paper also summarises the findings of analyses by CNB experts, which are presented in further chapters of the volume....

The Maastricht inflation criterion, designed in the early 1990s to bring "high-inflation" EU countries in line with "low-inflation" countries prior to the introduction of the euro, poses challenges for both new EU member countries and the European Central Bank. While the criterion has positively...

The paper presents a methodology for measuring the clarity of central bank communication, illustrating it with the case of the European Central Bank (ECB) in 1999-2007. The analysis identifies the ECB's written communication as clear about 95 percent of instances, which is comparable to, or even...

This paper is primarily concerned with assessing the bias of the CNB's predictions in relation to undershooting of the inflation target. We conclude, that the inflation prediction error has decreased over time. We further point out that the GDP growth respectively interest rates were above...

This paper investigates basic characteristics of inflation targeting in the Czech Republic. The first part of the paper starts by briefly indicating some general macroeconomic conditions of inflation targeting in the Czech Republic, including the identification of the main shocks, which affected...

This paper provides an empirical analysis of the causes of deviations of inflation from the CNB targets. In the short term, shocks relating to prices of agricultural producers represent the most important factor. In the medium-term horizon, foreign exchange shocks form the most important factor....

In the period 1998-2007, inflation very often deviated from inflation targets of the Czech National Bank, most of these deviations being in the direction of undershooting the targeted level. In this paper, a purely statistical, model-independent procedure is used to search for an answer to the...

This paper shows how fan charts generated from Bayesian vector autoregression (BVAR) models can be useful for assessing 1) the forecasting accuracy of central banks’ prediction models and 2) the credibility of stress tests carried out to evaluate financial stability. Using unique data...

The first 10 years of Czech Republic's inflation targeting regime have been remarkable by the persistent undershooting of the inflation targets. This article is an introduction to a special issue aimed at analyzing the factors of the undershooting. The articles in this issue explore the...