Publication at Faculty of Social Sciences, Faculty of Mathematics and Physics, Centre for Economic Research and Graduate Education |
2002
Abstract
The success of inflation-targeting regimes rests in the systemic responsiveness of monetary policy to major disturbances. To ensure systematic behavior, monetary policy must be explicitly based on the medium-term macroeconomic framework with a forwardlooking transmission mechanism.
Macroeconomic models provide a useful means to exploit such a mechanism and achieve a medium-term consistency of forecast. The article describes the quarterly prediction model currently used by the Czech National Bank and the model?s role in the bank?s forecasting and analytical system.