1 Investigating the Effects of Monetary Policy in Post-Transition Economies: The Czech Republic and Poland

This thesis paper proposes a structural VAR model to identify monetary policy influence in the transition period for the Czech Republic and Poland. The analysis of the impulse responses and the variance decompositions puts forward the significant, especially for Poland, though transitory, role of the monetary policy for the fluctuations of output. The non-trivial importance of the exchange rate in explaining price level fluctuations, on one hand; and the significant monetary reaction to exchange rate and foreign interest rate movements, on the other; emphasizes the exchange rate as a significant transmission mechanism. External influences are identified as an important source for the variation in output, prices and exchange rates for the two countries