Inflation Forecasting and Targeting: Experience from Central Europe
This paper deals with inflation forecasting and targeting performance of selected Central and Eastern-European central banks. Using battery of absolute and scaled forecasting errors along with significance tests, we have evaluated inflation predictions on the optimal monetary policy transmission hor...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Czech Statistical Office
2021-09-01
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| Series: | Statistika: Statistics and Economy Journal |
| Subjects: | |
| Online Access: | https://www.czso.cz/documents/10180/143550799/32019721q3_259-267_sindelar_analyses.pdf/1820288e-daa1-4024-8aa1-8163f0ac8b95?version=1.3 |
| Summary: | This paper deals with inflation forecasting and targeting performance of selected Central and Eastern-European central banks. Using battery of absolute and scaled forecasting errors along with significance tests, we have evaluated inflation predictions on the optimal monetary policy transmission horizon (14–16 months), as well as adherence to long-term inflation targets. Out of the evaluated Czech, Hungarian and Polish central banks, complemented by the European Central Bank for comparison, it was found, that even though the bank´s
performance improved during the last decade, notably with the forecasting component, some issues are still present. These are mostly connected to the inflation targeting mechanism, which was found to contain systemic bias in the case of the Czech national bank, as well as failing in comparison with the naïve benchmark in the case of the European Central Bank. Both outcomes pave the way for further investigation in a wider economical context. |
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| ISSN: | 0322-788X 1804-8765 |