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Monetary Policy Transmission Mechanisms and Inflation in Slovakia
Author:
Louis Kuijsnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 080
Language:
English
Publication Date:
01 May 2002
DOI:
https://doi.org/10.5089/9781451850314.001
ISBN:
9781451850314
ISSN:
1018-5941
Pages:
27
Keywords:
WP; price; core CPI; price level; Monetary policy; inflation; transmission mechanisms; transition; monetary policy transmission mechanisms; channel work; exchange rate peg; oil price; wage cost; output gap; Real interest rates; Exchange rates; Real exchange rates; Currency markets
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper presents the results of an empirical analysis into monetary policy transmission mechanisms and inflation in the Slovak Republic. The estimated vector autoregression (VAR) model suggests that inflation is determined by changes in foreign prices, the exchange rate, and wage costs, with a modest effect of aggregate demand, in line with theory for small, open economies. Monetary policy is shown to affect inflation via these channels. Changes in money supply seem to have a modest but rapid impact on prices. The measured effect of interest rate changes is modest and gradual, although it appears to have become more important in recent years.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2002: Issue 080