Foreign Exchange Interventions Under Inflation Targeting: The Czech Experience

This paper discusses the role of foreign exchange interventions in the inflation-targeting regime, focusing on the Czech experience since 1998. It proposes criteria for assessing whether the interventions are consistent with the inflation targeting. While the CNB's interventions in mid- 1998 and in 2002 pass these criteria easily, the judgement might be more uncertain concerning the interventions in early-1998 and in 1999/2000. It is also stressed that the literature on managed floating usually ignores the difficulty in defining clear procedural rules for the interventions. This contrasts with the procedures guiding the interest rate decisions under the inflation targeting regime, which may occasionally create tensions in the policy regime, as demonstrated by the Czech experience, too. The interventions' effectiveness in the Czech Republic is also discussed. It seems that sometimes they might have had an immediate impact lasting up to 2 or 3 months, but no strategy can be identified that would work in all episodes. Moreover, even many of the 'successful' interventions were not able to prevent quite prolonged periods of exchange rate overvaluation in 1998 and in 2002. It is concluded that the signalling role of foreign exchange interventions is more important than their 'market-equilibrating effect', implying a rather unstable transmission between the central bank actions and the market reactions. Finally, the paper analyses the sterilisation costs, which are shown to have been quite substantial in the Czech Republic. It is argued that the financial sustainability of the interventions is quite important for their credibility and effectiveness.Exchange rate, foreign exchange interventions, inflation targeting, sterilisation.

Price Convergence: What Can the Balassa-Samuelson Model Tell Us?

The paper provides a theoretical reference point for discussions on adjustments in price levels and relative prices. The authors present a 'nested' model integrating the Balassa-Samuelson model of the real equilibrium exchange rate with a model of accumulation of capital and with the demand side of the economy. Consequently, they show how the model can be generalised to a case of numerous commodities with different degrees of tradability. The predictions of the model are generally consistent with empirical findings for Central and Eastern European countries. The authors show how the theoretical model can be used for internally consistent simulations of the future convergence process in a transition economy.Balassa-Samuelson model, inflation, relative prices.

Price Convergence to the EU: What Do the 1999 ICP Data Tell Us?

The paper analyses the price convergence in the Czech Republic and other Central and Eastern European (CEE) countries towards the European Union (EU). Cross-country comparisons based on the International Comparison Project (ICP) 1999 are used. The authors conclude that in a benchmark convergence scenario, the equilibrium real exchange rate appreciation of the Czech koruna (CZK) should reach roughly 1.5-2.0 percent a year. They also warn, however, that there may be additional sources of real appreciation such as terms-of-trade changes or price deregulations, which may lead to a higher pace in the medium run. Studying a more detailed breakdown of commodities, the authors find that no clear distinction can be made between tradable and non-tradable goods, the 'degree of non-tradability' varying between 10 and 85 percent. The implications of this for differences in the structures of relative prices in the CEE countries compared with the EU are analysed. The paper concludes that it may take about 15 years for the Czech relative price structure to converge to the least-developed EU countries.Balassa-Samuelson model, inflation, relative prices.

Central Bank Losses and Economic Convergence

This paper discusses the issue of central bank losses, developing a framework for assessing the ability of a central bank to keep its balance sheet sustainable without having to default on its policy objectives. Compared to the earlier literature, it analyses in more depth the consequences of economic convergence for the evolution of the central bank’s balance sheet and the important role played in this process by the risk premium and equilibrium real exchange rate appreciation. A combination of a closed-form comparative-static analysis and numerical solutions of the future evolution of the central bank’s own capital is used. Applying the framework to the Czech National Bank’s case, the paper concludes that the CNB should be able to repay its accumulated loss in about 15 years without any transfer from public budgets.Balance sheet, central bank, economic convergence, monetary policy, real appreciation, risk premium, seigniorage, transition.

Geometric Accuracy, Volumetric Accuracy and Compensation of CNC Machine Tools

The production of geometrically and dimensionally defined workpieces is what the user expects from a machine tool. Deviations from these prescribed dimensions and geometry are due to machine inaccuracies. Therefore, it was necessary to develop tests and tests on the properties and parameters of machine tools that can detect these. Every new machine tool undergoes these tests.How to perform and evaluate these tests is determined and recommended primarily by standards and regulations. When testing the properties of machines, it is not only about knowing and knowing how to measure machines, but also how I can analyze and apply the obtained results. Is it necessary to do a mechanical intervention of the machine or is it enough to compensate the software

Geographical and temporal distribution of SARS-CoV-2 clades in the WHO European Region, January to June 2020

We show the distribution of severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) genetic clades over time and between countries and outline potential genomic surveillance objectives. We applied three genomic nomenclature systems to all sequence data from the World Health Organization European Region available until 10 July 2020. We highlight the importance of real-time sequencing and data dissemination in a pandemic situation, compare the nomenclatures and lay a foundation for future European genomic surveillance of SARS-CoV-2

Measuring Complexity of SAP Systems

The paper discusses the reasons of complexity rise in ERP system SAP R/3. It proposes a method for measuring complexity of SAP. Based on this method, the computer program in ABAP for measuring complexity of particular SAP implementation is proposed as a tool for keeping ERP complexity under control. The main principle of the measurement method is counting the number of items or relations in the system. The proposed computer program is based on counting of records in organization tables in SAP