Another successful Monetary Policy Course delivered at the JVI

The IMF’s Monetary Policy course was delivered at the JVI during April 8-19, 2024. It was attended by 23 participants from 12 countries, with a diverse institutional background. While two thirds of them work at central banks, there were also participants from ministries, other public institutions, and an international organization.

The course integrated lectures and workshops, creating a firm link between theoretical concepts, empirical insights, and practical experience. The workshops were specially designed to shed light on the tradeoffs involved in monetary policy decisions. The course gradually moved from lectures introducing the basic concepts regarding monetary policy and exchange rates to hands-on workshops and case studies. The latter involved country experiences in alternative exchange rate regimes, thus connecting theoretical concepts to practical examples. 

The course recognized the evolving nature of monetary policy frameworks and central bank mandates with attention to recent crises that have changed the landscape in which central banks operate. Therefore, it also addresses unconventional monetary policy introduced in several countries, as well as some recent changes regarding policy interactions, high inflation, and monetary policy communication. 

Mr. Jan Vlcek from the Czech National Bank delivered a guest lecture. He focused on his coauthored research on the importance of monetary policy using a risk-based approach to wage-price spirals. He illustrated the beneficial role of policy scenarios in the decision-making process, quantifying the probability of a wage-price spiral, while preserving the key role of the baseline scenario in policy decisions.

In the final workshop, participants were engaged in simulation and analysis, leveraging the economic theory and quantitative frameworks acquired during the course. Guided by a structured approach, they had lively group discussions to identify and prioritize the most pertinent shocks facing their economies in the (post-)pandemic era. As the workshop progressed, participants collaborated on a joint model simulation, unraveling the complex interplay of multiple shocks, and exploring strategies for stabilizing policy reactions. Finally, participants prepared and delivered insightful presentations with baseline forecasts and alternative scenarios, as well as policy advice. The workshop showed how the participants' newly acquired knowledge of monetary policy can be used to address real-world economic challenges.

The course was well received by participants. Many of them appreciated the newly gained comprehensive understanding of how different shocks affect the real economy. This newly acquired knowledge enables them to better comprehend monetary policy decisions, thus enhancing their ability to contribute meaningfully to their respective institutions. They also outlined specific ways in which they plan to utilize the knowledge gained from the course in their roles. From the policy formulation and economic analysis to responding to economic shocks and sharing knowledge with colleagues, each aspect underscores the tangible impact of the MP course on their work.

Tibor Hlédik, Lead Economist, JVI