86

This article assesses the impact of monetary policy on output and inflation for the eight Central and Eastern European Countries (CEECs) newly admitted to the EU. Unlike most previous research, we explicitly link the potential changes in these transmission mechanisms to the monetary-regime switches that occurred in most of the countries studied. Our results show an undeniable convergence of CEEC monetary-policy transmission mechanisms toward the standards of industrialized countries. The convergence is especially visible in the consistent, significant response of output in all the countries examined. While the impact on inflation is still hard to detect, empirical analysis highlights the fact that all price puzzles disappear in stable and credibly inflation-averse monetary-policy regimes (Castelnuovo and Surico, 2006).