Prague Economic Papers 1999, 8(4) | DOI: 10.18267/j.pep.56

The persistence of moderate inflation in the czech republic and the czk crisis of may 1997

Josef C. Brada, Ali M. Kutan

The paper deals with the exchange rate policy being implemented in combination with the mix of monetary and fiscal measures prior to the speculative attack on the CZK in 1997. The fixed nominal exchange rate may have been retained for too long and the monetary and fiscal policies were inappropriate. It explains the relation between Czech inflation, exchange rate and macroeconomic policies until the crisis of May 1997.
While the Czech Republic weathered its currency crisis much better than did most other emerging economies, with the worst damage being a USD 2 billion loss of foreign reserves, the crisis failed to resolve all of the fundamental problems. It gives also some explanations for the persistence of inflation at a level around 10 % until mid-1998.

Klíčová slova: CZK crisis of May 1997, fixed nominal exchange rate policy, speculative attack, Czech inflation

Zveřejněno: 1. leden 1999  Zobrazit citaci