Impact of inflation targeting on a selected indicator of the real economy

Abstract

In fulfilling its monetary policy role, i.e., ensuring price stability, the central bank chooses one of several monetary policy regimes. Important features of inflation targeting are a publicly announced inflation target, the use of macroeconomic forecasting and open communication between the central bank and the public. The aim of the paper is to present, if exists, the impact of inflation targeting on the gross wage indicator in the Czech Republic. Real economy means the economy of the Czech Republic. Among other things, the thesis will discuss some of the principles and purposes of Inflation targeting as a central bank monetary policy tool in the context of the evolution of the inflation indicator and the identification of the main factors affecting it and the role of the average gross wage indicator. Inflation, as one of the most important economic indicators that affects the behavior and decision-making of economic agents, it is desirable to monitor, understand the regularities of its development and to some extent predict it.