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Full-Text Articles in International Economics
Targeting Relative Inflation Forecast As Monetary Policy Framework For Adopting The Euro, Lucjan T. Orlowski
Targeting Relative Inflation Forecast As Monetary Policy Framework For Adopting The Euro, Lucjan T. Orlowski
WCBT Faculty Publications
This study proposes relative inflation forecast targeting as an operational framework of monetary policy for adopting the euro by the EU new Member States. This strategy assumes containing differentials between the domestic and the eurozone inflation forecasts as an operational target. A model prescribing the RIFT framework is presented along with a set of appropriate policy indicator variables and instrument rules. The proposed framework advances the strategy based on relatively strict inflation targeting that is currently pursued by some NMS. Several ARCHclass tests in various functional forms are employed for providing preliminary empirical evidence on convergence of inflation differentials relative …
A Dynamic Approach To Inflation Targeting In Transition Economies, Lucjan T. Orlowski
A Dynamic Approach To Inflation Targeting In Transition Economies, Lucjan T. Orlowski
WCBT Faculty Publications
This study views inflation targeting as a viable monetary regime for more advanced transition economies. A dynamic approach to the trajectory of disinflation and to the flexibility of direct inflation targeting is presented in the context of achieving monetary convergence to the EU/AMU. The candidate countries are advised to begin from strict inflation targeting and to follow with a more flexible inflation targeting regime before they establish a necessary ‘foundational credibility’ and monetary stability. These steps, ultimately followed by a euro-peg, are necessary in preparing for accession to the eurozone. The early experiences of the Czech Republic and Poland with …