MONETÁRNÍ POLITIKA ČNB V OBDOBÍ PANDEMIE COVID-19 A JEJÍ VLIV NA INFLAČNÍ VÝVOJ A EKONOMICKOU STABILITU ČESKÉ REPUBLIKY

This bachelor’s thesis examines the monetary policy of the Czech National Bank (ČNB) during the COVID-19 pandemic and its impact on inflation and economic stability in the Czech Republic. The aim is to assess the effectiveness of the monetary policy instruments used in the extraordinary economic conditions of 2020–2022 and the subsequent post-pandemic period. The theoretical part defines the nature of monetary policy, its objectives, instruments, and the transmission mechanism in a small open economy, with a particular focus on the two-week repo rate as the ČNB’s main policy tool. The empirical part employs a Bayesian Vector Autoregression (BVAR) model with sign restrictions to identify monetary, demand, and price shocks and to measure their effects on inflation, GDP, the repo rate, and the money supply (M3). The analysis compares two periods – the pre-pandemic (2003Q1–2019Q4) and the period including the pandemic and post-pandemic developments (2003Q1–2025Q1) to determine whether the pandemic altered the effectiveness of the monetary policy transmission mechanism. The results show that the COVID-19 pandemic significantly weakened the impact of monetary policy on real economic activity, while its ability to influence the price level remained intact and, in some respects, even strengthened.