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Estimating Natural Rate of Interest and Equilibrium Exchange Rate: A Case of the Czech Republic

Zdeněk Pikhart

Zdeněk Pikhart

University of Economics in Prague, Faculty of Finance and Accounting, Ministry of Finance of the Czech Republic, Department of Economic policy, Macroeconomic Analysis UnitPrague,
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Pikhart, Zdeněk
 and 
Pavla Froňková

Pavla Froňková

Ministry of Finance of the Czech Republic, Department of Economic policy, Macroeconomic Analysis UnitPrague,
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Froňková, Pavla
  
Dec 21, 2019
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Published Online: Dec 21, 2019
Page range: 231 - 248
Received: Apr 25, 2019
Accepted: Oct 10, 2019
DOI: https://doi.org/10.2478/revecp-2019-0013
Keywords
© 2019 Zdeněk Pikhart et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Article deals with estimating real natural interest rate and exchange rate to construct monetary conditions index suitable for the Czech open economy. Despite unobservable characteristics of underlying interest rates and exchange rate, the importance of reference indicators for monetary policy is crucial. Proposed monetary condition index in gap form examines monetary impulse on economic and credit cycle in inflation targeting model.

Language:
English
Publication timeframe:
2 times per year
Journal Subjects:
Business and Economics, Political Economics, Economic Theory, Systems and Structures
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