The Estonian Economy and Monetary Policy is an Eesti Pank review that contains a description of the main recent events in the global market and in the Estonian economy and the forecast for the Estonian economy for the current calendar year and the next two.
Ardo Hansson Governor of Eesti Pank

Honourable President of the Riigikogu, Distinguished Members of the Riigikogu

I am here today to give you a summary of the year 2014 at Eesti Pank. I will speak on the economy in the euro area and on monetary policy, and I will... more


Speaking on Tuesday to the finance committee of the Riigikogu about the asset purchase programme of the central banks of the euro area, Governor of Eesti Pank Ardo Hansson said that economic history shows that central banks are not able to create long-term economic growth through large-scale... more

Working Papers of Eesti Pank No. 7/2013 Published in Baltic Journal of Economics, 2015, 1(14) This paper studies the effect of a monetary policy shock in the euro area on the main Estonian economic and financial variables between 2000 and 2012. Using a standard structural vector... more

Open market operations

Open market operations serve to steer interest rates and manage the liquidity situation in the money market, and to signal the stance of monetary policy. Generally, open market positions are carried out by NCBs on the initiative of the ECB and usually on the money... more


The transmission mechanism of monetary policy involves channels through which monetary policy decisions affect the economy in general and the price level in particular. As the transmission mechanism is characterised by long, variable and uncertain time lags, it is difficult to predict the... more


The central bank is the sole issuer of banknotes and bank reserves, which means that it is the monopoly supplier of the monetary base. Therefore, it can also set the conditions on which banks borrow from the central bank and thus influence the conditions of the interbank money market.

In... more


In order to achieve its primary objective - maintaining price stability - the Eurosystem uses a set of monetary policy instruments and procedures, which form the operational framework to implement the single monetary policy.

Monopoly supplier of monetary... more


Price stability implies avoiding both prolonged inflation and deflation.

Inflation is a rise in the in the general price level of goods and services in an economy over a longer period of time resulting in a decline in the value of money and purchasing power. Deflation is a decrease in... more

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