PRIORYTET NISKIEJ INFLACJI JAKO CEL POLITYKI PIENIĘŻNEJ W DOBIE SZOKÓW MAKROEKONOMICZNYCH
THE PRIORITY OF LOW INFLATION AS A MONETARY POLICY GOAL IN THE ERA OF MACROECONOMIC SHOCKS

Summary/Abstract: The article aims to evaluate the effectiveness of keeping inflation low as the paramount objective of monetary policy in the presence of exogenous shocks. In addition, the authors examine whether the classical price-stability paradigm can still be regarded as a necessary - and, in line with the monetarist doctrine, even sufficient - condition for sustained economic growth. Statistical and econometric methods (VAR, Vector Autoregression Models) were used. Data were taken from IMF and World Bank databases, as well as from publications by individual central banks and national statistical offices. The analysis shows that both the conceptual definition and the actually achieved degree of price stability exert a significant impact on macroeconomic equilibrium and growth prospects. They also shape the scope and effectiveness of monetary authorities' stabilisation measures. Country-specific econometric results reveal substantial heterogeneity in central-bank reactions to inflation-target breaches and in the effectiveness of policy-rate transmission to GDP growth. Vector autoregressive (VAR) models further indicate that strict adherence to an inflation target does not invariably translate directly into policy-rate adjustments, and that, when such adjustments occur, their effects on economic activity can be either negative or positive, depending on the time horizon and structural features of the economy in question. The article fills a research gap by assessing the performance of a low-inflation-priority monetary policy under overlapping macroeconomic shocks.

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