What is the optimal disinflation path to be targeted in the Czech economy?

What is the optimal rate of disinflation to be targeted during economic tra nsition? Under the framework of inflation targeting, this question attracts more attention than in other monetary strategy frameworks since explicit i nflation targets are used in order to anchor expectations. Inflation target s signal what speed of disinflation policy maker's target. Determining whic h speed of disinflation is least costly in terms of volatility of important economic variables is problematical since costs depend on monetary transmi ssion in a given economy. Hence a consistent analytical framework is import ant. In this paper, a small, aggregate, forward-looking model of Czech mone tary transmission is used to compare the consequences of different disinfla tion strategies approximated with alternative policy rules. The results sug gest that near-linear trajectories are superior to trajectories that postpo ne disinflation or abruptly reduce inflation.