Estonian Economy and Monetary Policy 1996

Inflation and Monetary Policy 1996

CONTENTS

INTRODUCTION
1. MONETARY POLICY
Aim of Monetary Policy
Strategic Choices of Monetary Policy
1. Monetary Targeting
2. Exchange Rate Targeting
3. Inflation Targeting
Monetary Policy Instruments
1. Open Market Operations
2. Standing Facilities
3. Reserve Requirement
2. EVOLUTION OF INFLATION IN ESTONIA
General Trends
Adjustment of Relative Prices
Changes in the Structure of the Prices of Goods and Services
About International Price Convergence
Evaluation of Underlying Inflation
1. Net Price Index
2. Indicator UCPIX
3. Fischer's Ideal Index
4. Weighted Median
5. Adjusted Average Indicators
3. PRINCIPLES OF THE INFLATION MECHANISM
External Factors
Internal Factors
Convergence of Prices in the Economic Sectors Open to Foreign Competition
Increase in Labour Productivity and Inflation
4. ON PROBLEMS RELATED TO PRICE CONVERGENCE
Monetary Policy, Capital Inflow and Convergence Process
Impact of Monetary Policy So Far
Capital Inflow and Inflation
On the Prices of Real Estate and Financial Assets in the Context of the Inflation Discussion
On Price Convergence, Real Exchange Rate of the Kroon and Competitiveness
IN CONCLUSION