Exchange rate and economic growth in Czech Republic

The aim of the paper is to study a possible impact of the exchange rate on the GDP in the Czech Republic. The relationship between both variables is constructed in the framework of aggregate demand and aggregate supply equations. In 2014 the Czech National Bank started to weaken the exchange rate of the Czech crown with the goal to maintain an economic growth. The effect of such an economic policy is measured by the help of relevant econometric techniques using the annual data. During the years under exchange rate targeting, the GDP growth was higher than before, but without an evidence that the cause is just the exchange rate devaluation.