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Macroeconomic Policy and Economic Performance


  • Pedro de Lima
  • Alain de Serres
  • Mike Kennedy


This paper analyses the major changes in both monetary and fiscal policy that have taken place over the past two decades and, within the limits of the existing empirical research, evaluates the overall costs and benefits for the OECD economies. The general findings for monetary policy are that, while it was costly to lower inflation (in terms of output and employment), there are also benefits in terms of lower risk premiums on interest rates, a more favourable investment climate and an improvement in economic efficiency. That said, the paper concludes that there is not much of a case for lowering inflation further from its already low level. While inflation was being lowered, in a number of cases central banks were also undergoing rather significant changes to their institutional structures and policy-making frameworks. There is some limited evidence that these changes have helped in terms of better anchoring inflation expectations. At the same time there is no firm answer on how ... Politique macro-économique et performance Cette étude examine les changements majeurs survenus au cours des vingt dernières années dans la conduite des politiques monétaire et fiscale et en évalue les principaux coûts et bénéfices sur la base de la littérature empirique existante. Concernant la politique monétaire, bien qu’il ait été coûteux de réduire l’inflation (en termes d’emploi et de production), il y eu également des bénéfices en termes de réduction de prime de risque sur les taux d’intérêt, un climat plus favorable à l’investissement et une plus grande efficience économique. Ceci étant, l’étude conclut qu’il n’apparaît pas justifié de poursuivre la désinflation au-delà des faibles niveaux déjà enregistrés dans la plupart des pays. Parallèlement à la poursuite de la politique désinflationniste, plusieurs banques centrales ont modifié de manière importante le cadre institutionnel dans lequel la politique est mise en opération. L’hypothèse selon laquelle ces changements ont contribué à mieux ancrer les anticipations ...

Suggested Citation

  • Pedro de Lima & Alain de Serres & Mike Kennedy, 2003. "Macroeconomic Policy and Economic Performance," OECD Economics Department Working Papers 353, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:353-en

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    Cited by:

    1. Jan L. Bednarczyk, 2006. "The Concept Of Neutral Inflation And Its Application To The Eu Economic Growth Analyses," Quaderni del Dipartimento di Economia, Finanza e Statistica 25/2006, Università di Perugia, Dipartimento Economia.

    More about this item


    cible d'inflation; consolidation fiscale; disinflation; désinflation; fiscal consolidation; fiscal sustainability; inflation target; macroeconomic stabilisation; policy rules; règles de politique; stabilisation macro-économique; viabilité fiscale;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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