publication . Preprint . Article . 2008

Estimation of weights for the Monetary Conditions Index in Poland

Andrzej Torój;
Open Access
  • Published: 23 Jun 2008
In this paper, we follow the econometric approach to assess relative importance of real interest rate and real exchange rate for the monetary conditions in Poland, quantified as weights for Monetary Conditions Index (MCI). We consider both single- and multiple-equation specifications proposed in the literature with an application to Poland. Although MCI is nowadays broadly considered a rather obsolete indicator in monetary policy conduct, we argue that the econometric framework used for this purpose could be a good departure point when modelling monetary adjustments in a monetary union, provided correct dynamic specification of the models.
free text keywords: Monetary Conditions Index, MCI-ratio, IS curve, Phillips curve, VAR., jel:C22, jel:C32, jel:E52, jel:E59, Phillips curve, Real interest rate, Exchange rate, Monetary conditions index, Monetary economics, Interest rate, media_common.quotation_subject, media_common, Economics, Monetary policy, Divisia monetary aggregates index
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