Measurement of the efficiency of monetary policy
Since 2000, monetary policy in Indonesia started to use Inflation Targeting Framework (ITF). To evaluate the performance of the monetary policy, it requires efficiency indicators. The measurement of the efficiency of monetary policy is based on inflation and output variations. This paper formulates a method for measuring the efficiency of monetary policy and applies it in Indonesia. It finds that since the implementation of ITF, the efficiency of monetary policy has not changed significantly. However, the efficiency of monetary policy tends to increase after the full implementation of the ITF framework after 2005 than in the transition period of 2000-2005.
Aguir, A., & Smida, M. (2015). Efficiency of monetary policy under inflation targeting. Economics Bulletin, 35(1), 788â€“813.
Athanasios, G., & Mo, J. K. (2016). Monetary policy and efficiency in over-the-counter financial trade (Munich Personal RePEc Archive Paper No. 71455). Retrieved from https://mpra.ub.uni-muenchen.de/71455/
Atkeson, A., Chari, V. V., & Kehoe, P. J. (2007). On the optimal choice of a monetary policy instrument (NBER Working Paper No. 13398). Cambridge.
Briec, W., Gabillon, E., Lasselle, L., & Ratsimbanierana, H. (2012). On measuring the efficiency of monetary policy. Economics Letters, 117(1), 182â€“185. https://doi.org/10.1016/j.econlet.2012.04.107
Cecchetti, S. G., Flores-Lagunes, A., & Krause, S. (2006). Has monetary policy become more efficient? A cross country analysis. Economic Journal, 116, 408â€“433. https://doi.org/10.3386/w10973
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Economic Journal of Emerging Markets (EJEM)
ISSN 2086-3128 (print), ISSN 2502-180X (online)
Center for Economic Studies, Department of Economics,
Universitas Islam Indonesia, Indonesia.
EJEM by http://journal.uii.ac.id/JEP/ is licensed under a Creative Commons Attribution 4.0 International License.