Monetary policy efficiency and macroeconomic stability: Do financial openness and economic globalization matter?
Helder de Mendonça () and
Natalia Cunha Nascimento
The North American Journal of Economics and Finance, 2020, vol. 51, issue C
We provide indicators for monetary policy inefficiency and macroeconomic instability by the use of efficiency frontier approach to measure the performance of the monetary authority. In particular, based on panel data analysis which takes into account information from forty-two countries for the period 1990 to 2014, we analyze the impact of an increase in financial openness and economic globalization on both monetary policy inefficiency and macroeconomic instability. The findings denote that both financial openness and economic globalization are important tools to improve monetary policy efficiency and macroeconomic stability. Furthermore, we observe that countries with inflation targeting, higher level of development, low risk of political pressures (such as socioeconomic pressures and democratic accountability), as well as the absence of international financial crisis, have a better performance in terms of monetary policy efficiency and macroeconomic stability.
Keywords: Monetary policy efficiency; Macroeconomic stability; Financial openness; Economic globalization (search for similar items in EconPapers)
JEL-codes: E52 E58 F41 F62 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:51:y:2020:i:c:s1062940818302651
Access Statistics for this article
The North American Journal of Economics and Finance is currently edited by Hamid Beladi
More articles in The North American Journal of Economics and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().