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The latest generation of research into macroeconomic policy has turned from more technical aspects of optimal control and expectations formation to consideration of the policymaking institutions themselves. More and more countries have moved towards greater degrees of central bank independence, including many developing economies as well the member countries of the European Central Bank. What still is not generally settled among economists is how to measure the stance of policy and the institutional features of the policymaking process. Our review encompasses many different measurements of policy stance and policymaking processes. We begin with monetary policy in the following section after which the third section analyses central banking institutions. The fourth and fifth sections turn to fiscal policy and the need to adjust budget balance for the state of the business cycle. There is then a brief concluding section.


A much earlier version of this paper was presented at the Western Economic Association annual meetings, San Diego, California, July 2006. We thank Tom Willett for initiating this project and are also grateful to an anonymous referee for helpful comments.

NOTICE: This is the author’s version of a work that was accepted for publication in the Journal of Financial Economic Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published as:

Richard C.K. Burdekin, King Banaian, Mark Hallerberg, Pierre L. Siklos, (2011) "Fiscal and monetary institutions and policies: onward and upward?", Journal of Financial Economic Policy, Vol. 3 Iss: 4, pp.340 - 354. Available online at doi: 10.1108/17576381111182918.

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