Has monetary policy become more efficient? A cross-country analysis

Stephen G. Cecchetti, Alfonso Flores-Lagunes, Stefan Krause

Research output: Contribution to journalArticlepeer-review

56 Scopus citations


Over the past 20 years, macroeconomic performance has improved in industrialised 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 some combination of more efficient monetary policy making, a reduction in the variability of supply shocks, and changes in the structure of the economy. We develop a method for allocating performance changes among these factors. For 21 of the 24 countries we study, more efficient monetary policy has been the driving force behind improved performance.

Original languageEnglish (US)
Pages (from-to)408-433
Number of pages26
JournalEconomic Journal
Issue number511
StatePublished - Apr 2006
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics


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