CNB’s Aleš Michl on tackling inflation, Friedman’s mistake and ditching DSGE
Czech governor speaks about policy mistakes, targeting M2, diversifying into equities and gold, and ending interest on minimum reserves
In your first public speech after taking office in July 2022, you promised to bring inflation down from 18% to 2% in two years. Given the external factors that were outside of your control that were feeding inflation, that was quite a commitment. Why did you do it? And were you worried that if you failed, the experience could result in a loss of reputation for the CNB?
It was essential for us to set a clear, ambitious goal for both the public and the markets, demonstrating the Czech National Bank
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