Is Monetary Policy Becoming Less Effective?

The mild recession that struck some advanced economies in 2000-2001 led to a revived interest in the study and management of economic cycles. More recently, monetary policy has attracted renewed attention as policymakers face increased pressure to anticipate economic fluctuations. Gathering information on current and future economic conditions has become an important role of the Central Bank in order to take timely decisions and avoid lags in policy effectiveness. As a consequence, emphasis is being placed on the detection of variables that forecast the future evolution of the economy.