Monetary and fiscal policies' efficiency and the determination of a nominal equilibrium exchange rate

The author of this paper constructs a continuous time macro-econometric mod el of the Czech economy. The model is assembled as a system of twelve non-l inear differential equations. The model is put into use to determine the no minal equilibrium exchange rate of the Czech koruna in a macro-economic fra mework. The paper also investigates the effectiveness of monetary and fisca l policies in the presence of a fixed exchange-rate regime and massive capi tal inflows. The search for an equilibrium point is outlined and stability and sensitivity analyses are provided, along with in-sample static and dyna mic predictions with the approximate discrete analogue.