Fiscal and Monetary Institutions and Policies: Onward and Upward?

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