Publication details
A Model Interpretation of the Czech Inflation Targeting and the Monetary Policy
| Authors | |
|---|---|
| Year of publication | 2005 |
| Type | Article in Proceedings |
| Conference | Proceedings of the 23rd International Conference Mathematical Methods in Economics 2005 |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | DSGE model; New Keynesian model; monetary policy; Taylor rule; inflation targeting; rational expectations; Kalman filter with likelihood function; Kalman filter smoother |
| Description | The paper introduces a New Keynesian DSGE model that describes the inflation targeting policy in the Czech economy. This model is based strictly on microfoundations and consists of representative finished and intermediate goods-producing firms, representative households and a cetral bank. The central bank implements its policy according to the generalized Taylor rule. A suitable method for solving the model is the Kalman filter evaluating a likelihood function and the Kalman smoother evaluating a time series of a smoothed estimate of the unobserved variable (target inflation). The model seems to give an approximation of the behavior of the Czech economy. |
| Related projects: |