Comparison of macroeconomic dynamic depending on the regime of central bank intervention

Foreign exchange interventions are used as a monetary policy instrument to achieve the set goals of central banks. The aim of this thesis is to compare macroeconomic indicators in the form of GDP, unemployment and investment in fixed capital depending on the regime of foreign exchange interventions of European central banks and compare the resulting impact of foreign exchange interventions across selected European states. The effect of foreign exchange interventions was examined in the economies of the Czech Republic, the Kingdom of Denmark, the Swiss Confederation and the Republic of Estonia, which, after joining the eurozone in 2011, replaced the Estonian crown with the euro. Macroeconomic dynamics was examined using VAR models and impulse response functions. In the VAR model, the values of GDP, unemployment and fixed capital investment for individual economies were entered and as exogenous variables have been determined, except for intercepts, trend, seasonality and pulse variables (interventions), the lagged values of macroeconomic indicators of the Federal Republic of Germany, which was chosen as the strongest economy in EU, which other economies usually respond to (mainly GDP). According to the analysis of the established VAR models, foreign exchange interventions of central banks had a positive impact only on the GDP of the Swiss economy and increased unemployment in the Estonian economy. The overall summary of the influence of selected exogenous variables on macroeconomic indicators of selected economies is evaluated as very weak.