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Fiscal and monetary institutions and policies: onward and upward?

Richard C.K. Burdekin (Robert Day School of Economics and Finance, Claremont McKenna College, Claremont, California, USA)
King Banaian (Department of Economics, St Cloud State University, St Cloud, Minnesota, USA)
Mark Hallerberg (Hertie School of Governance, Berlin, Germany and Department of Political Science, Emory University, Atlanta, Georgia, USA)
Pierre L. Siklos (Department of Economics, Wilfrid Laurier University, Waterloo, Canada)

Journal of Financial Economic Policy

ISSN: 1757-6385

Article publication date: 8 November 2011

Abstract

Purpose

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. The purpose of this paper is to assess prevailing monetary and fiscal policies.

Design/methodology/approach

The paper takes the form of a review encompassing many different measurements of policy stance and policymaking processes. The authors begin with monetary policy followed by an analysis of central bank institutions. The next 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.

Findings

The authors show in this review that fiscal and monetary rules, and economists' understanding of them, have changed substantially over the years. While on one level there is greater consensus, there have been new questions raised in the process that leave plenty of room for further ongoing research in these key policy areas as well as the optimal design of the design of the monetary and fiscal institutions concerned.

Originality/value

The paper provides a review of the existing literature updated and applied with reference to recent events, including the global financial crisis.

Keywords

Citation

Burdekin, R.C.K., Banaian, K., Hallerberg, M. and Siklos, P.L. (2011), "Fiscal and monetary institutions and policies: onward and upward?", Journal of Financial Economic Policy, Vol. 3 No. 4, pp. 340-354. https://doi.org/10.1108/17576381111182918

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited