Implementing inflation targeting regimes: The case of Poland

Poland has recently moved to inflation targeting as a strategy for monetary policy. Such a strategy can best be implemented with some understanding of the linkages between the policy variables and inflation outcomes. This paper finds that the exchange rate played a dominant role as a policy instrument in the 1990's. However, linkages between the short-term interest rate and inflation have been weak. Given this finding, modification of some details of the strategy, such as widening the target range or lengthening the target horizon, would be helpful. J. Comp. Econ., March 2001, 29(1), pp. 24-39. The Kiel Institute of World Economics, 24100 Kiel, Germany; European I Department, International Monetary Fund, 700 19th Street, NW, Washington. DC 20431. (C) 2001 Academic Press.