Is Poland Ready for Inflation Targeting?
31 Pages Posted: 12 Feb 2006
Date Written: March 1999
Abstract
Monetary policymakers in advanced transition economies such as Poland are increasingly interested in how inflation responds to changes in policy instruments and other economic forces. In this paper, measures of underlying CPI inflation based upon optimal trimming concepts are developed. The sensitivity of these CPI measures to changes in a set of 25 policy and economic variables is then studied via Granger causality tests and impulse responses and a multivariate model of CPI inflation developed. The results show that a core set of variables characterize one-period-ahead underlying inflation moderately well but that statistical linkages are not yet robust.
Keywords: leading indicators, inflation, monetary policy, inflation targeting, robust statistics, administered prices
JEL Classification: C32, C53, E31, E52
Suggested Citation: Suggested Citation
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