Are Central Banks in CEE Countries Concerned about the Burden of Public Debt?

The aim of this study is to analyze the monetary policy rules in the Czech Republic, Hungary and Poland, with public debt as an additional explanatory variable. We estimate linear rules by the GMM estimation and non-linear rules, using the Markov-switching model. Our findings suggest that in the Czech Republic and Poland the monetary authorities respond to growing public debt by lowering interest rates, while in Hungary the opposite may be observed. Moreover, we distinguish between passive and active monetary policy regimes and find that the degree of interest rate smoothing is lower and the response of the central banks to inflation and/or output gap is stronger in an active regime. In the passive regime, the output gap seems to be statistically insignificant

Anchoring of inflation expectations in the euro area: recent evidence based on survey data

The paper analyses the anchoring of inflation expectations of professional forecasters and consumers in the euro area. We study anchoring, defined as the central bank’s ability to manage expectations, by paying special attention to the impact of the ECB inflation target and ECB inflation projections on inflation expectations. Our analysis indicates that longer-term inflation forecasts have become somewhat more sensitive to shorter-term forecasts and to actual HICP inflation in the post-crisis period. We also find that the ECB inflation projections have recently become more important for short- and medium-term professional forecasts and at the same time the role of the ECB inflation target for those expectations has diminished. Overall, our analysis suggests that in recent years inflation expectations in the euro area have shown some signs of de-anchoring

Ageing population, physical activity, and long-term fiscal sustainability: evidence from Poland

Our study estimates potential fiscal savings from increased physical activity among older people. This is the first study directly assessing the possible impact of higher physical activity on long-term fiscal sustainability. The study focuses on Poland, where ageing costs are mostly associated with an increase in public spending on healthcare and long-term care. Our results suggest that physical activity has the potential to significantly decrease healthcare and long-term care expenditures. Converting these results into long-term fiscal sustainability, we calculate the S2 indicator, used by the European Commission for the assessment of fiscal sustainability in the long horizon. The long-term component of the indicator, related to ageing costs, is lower by almost 0.7 in comparison with the baseline case, 0.5 of which can be attributed to the reduction in long-term care and 0.2 to the reduction in healthcare. Our results confirm that increased physical activity among older people may lead to a reduction in expenditures related to population ageing and may significantly improve long-term fiscal sustainability

Monetary Policy Transmission in Poland: A Study of the Importance of Interest Rate and Credit Channels

The importance of credit in the monetary transmission mechanism has recently attained a lot of attention due to a growing understanding that credit market imperfections can have an impact on the monetary policy effectiveness. In this study, using Vector Error Correction Models (VECMs) and Structural Vector Autoregressions (S-VARs), we go in-depth of the role of credit in the Polish monetary policy transmission. Papers on the role of credit in the money transmission mechanism (MTM) in Poland show that the credit channel operates. It seems however, that factors through which it affects the aggregate demand might have changed over time. The most recent study on the bank-level data suggests that the degree of bank liquidity has an impact on its efficiency: the most liquid banks do not reduce their loan supply for firms after monetary policy tightening. Previous works suggested that bank size and capital as well as variables connected with risk taking might have played a role in the credit channel operation. The results presented in this study suggest that the monetary policy impact on loan supply is, if anything, weak. One of the reasons is that Polish banks hold large amounts of highly liquid assets in their portfolios. Banks are therefore able to implement buffer-stock behaviour: in response to a tighter monetary policy, they can reduce their stocks of most liquid assets and insulate loan portfolios. To shed some light on the behaviour of the corporate sector we show how interest rate shocks affect the indebtedness of various types of firms (private, individual . i.e. small privately owned entities employing up to nine persons, state-owned). Since the balance sheet channel (one of the concepts within the broad credit channel theory) stresses the impact of monetary policy on the borrowers. balance sheets, we examine the relationship between loans and financial standing of firms. We find some support for the hypothesis that firms. balance sheets are an important factor in the loan supply function. We also analyse the reactions of various types of loans, i.e. investment, revolving and export credit, as well as real estate and securities loans to monetary policy shocks. Our results suggest that after a monetary tightening the response of investment loans differs from the response of other types of loans

Central Bank Credibility: Determinants and Measurement. A Cross-Country Study

This paper proposes a new measure of central bank credibility — the credibility index calculated on the basis of the key determinants of central bank credibility. The index is compiled for 9 countries: the Czech Republic, Hungary, Slovakia, Poland, Chile, Brazil, Turkey, United Kingdom and Sweden , for the years 1999–2007. The results are cross-checked with other credibility measures based on inflation expectations of two groups of economic agents. The analysis demonstrates that the credibility index may be considered a relevant and consistent credibility measure

Small Inflation Model of Mongolia (SIMOM)

This paper describes a preliminary version of the small inflation model of Mongolia (SIMOM). The intended primary use of the model is analysis of the monetary transmission mechanism and the inflation process in Mongolia, estimation of dynamic responses of selected variables to different shocks hitting the Mongolian economy as well as forecasting macroeconomic categories (e.g. exchange rate, output gap, inflation) over a medium term, consistent with the lags in the monetary transmission mechanism. Conclusions from the paper are the following: Mongolian inflation is driven by a large number of shocks, both internal and external. At the same time the effectiveness of the monetary transmission mechanism is relatively weak (although stronger than previously perceived). The exchange rate channel seems to be the most important channel of monetary transmission mechanism in Mongolia

Small Inflation Model of Mongolia (SIMOM)

This paper describes a preliminary version of the small inflation model of Mongolia (SIMOM). The intended primary use of the model is analysis of the monetary transmission mechanism and the inflation process in Mongolia, estimation of dynamic responses of selected variables to different shocks hitting the Mongolian economy as well as forecasting macroeconomic categories (e.g. exchange rate, output gap, inflation) over a medium term, consistent with the lags in the monetary transmission mechanism. Conclusions from the paper are the following: Mongolian inflation is driven by a large number of shocks, both internal and external. At the same time the effectiveness of the monetary transmission mechanism is relatively weak (although stronger than previously perceived). The exchange rate channel seems to be the most important channel of monetary transmission mechanism in Mongolia

Greenery and water in historic manor estates. The history of transformations of selected examples of architectural concepts from Krakow

Artykuł przybliża problematykę aranżacji krajobrazu w zabytkowym budownictwie dworskim. Zarówno woda jak i zieleń stanową istotne elementy kształtujące charakter przestrzeni wokół zabudowy. Niniejsze czynniki w kontekście budynków zabytkowych stanowią rozległą tematykę, którą można podzielić na dwie grupy. Pierwszą z nich jest forma, drugą funkcja. Zarówno formę – swobodną i urządzoną, jak i funkcję – reprezentacyjną, rekreacyjną i użytkową, można rozpatrywać w kontekście historycznym (powstania danego założenia) oraz współczesnych aranżacji. Na przykładzie wybranych trzech obiektów znajdujących się w Krakowie zilustrowano zabytkowe założenia dworskie z uwzględnieniem wyżej wskazanego podziału.This article introduces the problem of landscape arrangement in historic manorial construction. Both water and vegetation are important elements shaping the character of the space around the building. These factors in the context of historic buildings constitute a vast subject matter that can be divided into two groups. The first is form, the second function. Both the form - free and decorated, as well as, the function - representative, recreational and functional, can be considered in the historical context (creation of a given complex) and contemporary arrangements. Using three selected objects, located in Krakow, as examples of historical manorial complexes have been illustrated, taking into account the aforementioned division

Fiscal sustainability in cee countries – the case of the Czech Republic, Hungary and Poland

The aim of the study is to assess fiscal sustainability in the Czech Republic, Hungary and Poland and to test for existence of fiscal dominance in these countries in the context of the fiscal theory of the price level. The empirical study is conducted using unit root tests and cointegration analysis with possible structural breaks. The approach is consistent with so called backward-looking approach for fiscal dominance testing proposed by Bohn (1998). The results suggest that in the Czech Republic and Poland fiscal dominance prevailed in the analyzed period, while in Hungary – monetary dominance. The result for Hungary may be caused, however, by a one-time reduction in debt resulting from changes in pension system