the interaction between nominal and real sectors is studied based on estimating a simultaneous co-integrated system including foreign and domestic prices, real output, liquidity and exchange rate variables. two co -integrating vectors namely augmented ppp and demand for money functions are identified. the results suggest that real output is a weakly exogeneous variable and relatively the leadin...

This article analyzes the recent conduct of monetary and exchange rate policies in the Czech Republic. The Czech Republic entered 1993 as a newly independent country. It has introduced inflation targeting and floating exchange rate regime. The multidimensional nature of the inflationtargeting definition explains why there is no consensus about whether or not it should be employed. However, the ...

Given the increasing importance of achieving low and stable inflation rate during the last decades, adopting the most suitable practices to implement monetary policies has always been of concern by monetary authorities of different countries. Inflation targeting (IT) regime is the most recent strategy to guide monetary policies that have been introduced following the occurrence of exchange rate...

This paper reviews the monetary approach to exchange rate determination and gives a brief historical review on the demand for money used in this approach. The monetary approach to exchange rate determination has come a long way. The basic models developed in the 1970s received initial support but did not hold up under further empirical research. With several advances in econometric analysis and...