Simple methods to assess the credibility of the Hungarian inflation targeting regime

In our paper, we introduce simple approaches to assess the credibility of the Hungarian inflation targeting (IT) monetary policy regime in the period between July 2001 and April 2009. First, we present the findings of a non-representative survey we conducted amongst the major stakeholders of monetar...

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Bibliographic Details
Main Authors: Erdélyi Miklós
Szikszai Szabolcs
Format: Book part
Published: 2010
Series:Proceedings of the Challenges for Analysis of the Economy, the Businesses, and Social Progress : International Scientific Conference Szeged, November 19-21, 2009
Kulcsszavak:Infláció - Magyarország - 21. sz.
Online Access:http://acta.bibl.u-szeged.hu/57820
Description
Summary:In our paper, we introduce simple approaches to assess the credibility of the Hungarian inflation targeting (IT) monetary policy regime in the period between July 2001 and April 2009. First, we present the findings of a non-representative survey we conducted amongst the major stakeholders of monetary policy. The results of the survey suggest that, according to financial market players, the National Bank of Hungary (MNB) lost some of its credibility between 2002 and 2007.We then apply simple methods to assess the success of the IT regime and to measure the predictability and gradualism of the decisions of the MNB’s Monetary Council (MC) and the consistency of central bank communication. The results of this analysis show that the time series of the inflation measure using unchanged tax rates became stationary after the introduction of IT in 2001, while the predictability and gradualism of MNB MC’s policy rate decisions and the consistency of central bank communication each displayed low levels in the observed period.
Physical Description:473-498
ISBN:978-963-06-9558-9