EconPapers    
Economics at your fingertips  
 

Has Monetary Policy Become More Efficient? A Cross Country Analysis

Stephen Cecchetti (), Alfonso Flores-Lagunes () and Stefan Krause Montalbert

No 10973, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Over the past twenty years, macroeconomic performance has improved in industrialized and developing countries alike. In a broad cross-section of countries inflation volatility has fallen markedly while output variability has either fallen or risen only slightly. This increased stability can be attributed to either: 1) more efficient policy-making by the monetary authority, 2) a reduction in the variability of the aggregate supply shocks, or 3) changes in the structure of the economy. In this paper we develop a method for measuring changes in performance, and allocate the source of performance changes to these two factors. Our technique involves estimating movements toward an inflation and output variability efficiency frontier, and shifts in the frontier itself. We study the change from the 1980s to the 1990s in the macroeconomic performance of 24 countries and find that, for most of the analyzed countries, more efficient policy has been the driving force behind improved macroeconomic performance.

JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-afr, nep-cba, nep-mac and nep-mon
Note: ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18) Track citations by RSS feed

Published as Cecchetti, Stephen G., Alfonso Flores-Lagunes and Stefan Krause. "Has Monetary Policy Become More Efficient? A Cross-Country Analysis," Economic Journal, 2006, v116(511,Apr), 408-433.

Downloads: (external link)
http://www.nber.org/papers/w10973.pdf (application/pdf)

Related works:
Journal Article: Has Monetary Policy become more Efficient? a Cross-Country Analysis (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10973

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10973

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-11-11
Handle: RePEc:nbr:nberwo:10973