Evaluating the Performance of Central Banks of G20 Countries: Integrating DEA with an Entropy-Based Russell Measure

Archila Kushwaha () and Brajesh Kumar ()
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Archila Kushwaha: School of Management Sciences
Brajesh Kumar: Central University of South Bihar

A chapter in Advances in the Theory and Practice of Data Envelopment Analysis, 2025, pp 293-309 from Springer

Abstract: Abstract The evaluation of central banks’ performance is a complex task, involving the assessment of their efficiency and effectiveness in achieving multiple objectives, such as price stability, financial stability, and economic growth. Existing evaluation methods have limitations, highlighting the need for a more comprehensive and robust approach to assess the performance of G20 central banks. This study aims to address this gap by using an integrated framework that combines Data Envelopment Analysis (DEA) with the Entropy-Based Russell Measure (ERM) to provide a more accurate and nuanced assessment of central banks’ performance. The efficiency of financial statements of central banks is a critical indicator of economic growth and stability. This research focuses on evaluating the efficiency of the financial statements of central banks of the G20 countries for the financial year 2022. By incorporating entropy, this study will account for the use of input, output, and system weighting, offering a comprehensive analysis of performance. This approach provides a novel perspective on the financial efficiency of central banks, considering the complexity and multifaceted nature of financial data. The findings of this research will contribute valuable insights into the operational efficiency and performance evaluation of central banks within the G20, informing policy and decision-making processes. Future research could extend this framework to include additional years of data and explore the impact of macroeconomic factors on central bank efficiency, further refining the assessment tools for broader applicability.

Keywords: Data Envelopment Analysis (DEA); Entropy-Based Russell Measure (ERM); Central Bank Efficiency; G20 Countries; Financial Statement (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-3-031-98177-7_20

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DOI: 10.1007/978-3-031-98177-7_20

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