The recent financial crisis has demonstrated the dangers of ignoring the factors that led to previous crises, and the effectiveness of the policies designed to deal with them. Over time, these macroeconomic policies have evolved, oscillating between state intervention and a free-market approach. Following a story that runs from the pre-Great Depression era up until the Financial Crisis of 2007-11, this book reveals an intimate connection between new macroeconomic ideas and policies and the events in the real economy that inspired them. It does this in an accessible, easy-to-follow style, first by focusing on the developments of economic theories and policies, and then by concentrating on the design of domestic and international institutions and economic governance. Written by three leading experts on the history of economic policy, the book is ideal for graduates and undergraduates studying macroeconomics, monetary policy and the history of economic thought.

In this book leading European economists examine the current status of social pacts and their future. Particular focus is placed on the role of trade unions, and the positive role they can play for economic and social stability by agreeing to set wages on the basis of a target rate of inflation. As the European Union expands and social change accelerates, this insightful book will be of interest to all concerned with social and economic developments across Europe.

In this book leading European economists examine the current status of social pacts and their future. Particular focus is placed on the role of trade unions, and the positive role they can play for economic and social stability by agreeing to set wages on the basis of a target rate of inflation. As the European Union expands and social change accelerates, this insightful book will be of interest to all concerned with social and economic developments across Europe.

In developing a new and highly innovative theory of economic policy, this book deals with conflicts between strategic actions by public and private agents. It builds on the Lucas critique but also applies the tools introduced by Tinbergen and Theil to dynamic policy games, and from there derives a new theory of economic policy. Its main propositions describe such properties in the models currently used for policy-making as neutrality and equilibrium existence, uniqueness, and multiplicity. These properties are key to understanding the impact of concepts such as rational expectations, time inconsistency, communication and the use of policy announcements. As the numerous examples show, they are useful both for model building and for devising optimal institutions. The Theory of Economic Policy in a Strategic Context is an essential but accessible tool for economic researchers involved in policy questions.

Economic policy is facing crises on multiple fronts. With the effects of the last financial crisis still with us, it is now faced with the new challenges of post-Covid economic recovery and dealing with the negative effects of over consumption on the climate. This book explores the future of economic policy in relation to what the author sees as the four great policy challenges of the first half of the 21st century: the after effects of the last financial crisis and the catastrophic impact of the Covid pandemic, secular stagnation, growing poverty and inequality, and globalization. The existence of these economic problems has become increasingly relevant since some of the tools available to public action have become useless. As economists begin to suggest new instruments of economic policy, this book will help the reader understand the nature of the economic and political facts that influence both current and future generations.

Economic policy is facing crises on multiple fronts. With the effects of the last financial crisis still with us, it is now faced with the new challenges of post-Covid economic recovery and dealing with the negative effects of over consumption on the climate. This book explores the future of economic policy in relation to what the author sees as the four great policy challenges of the first half of the 21st century: the after effects of the last financial crisis and the catastrophic impact of the Covid pandemic, secular stagnation, growing poverty and inequality, and globalization. The existence of these economic problems has become increasingly relevant since some of the tools available to public action have become useless. As economists begin to suggest new instruments of economic policy, this book will help the reader understand the nature of the economic and political facts that influence both current and future generations.

Government interventions in market failures can encounter objections from those who doubt their efficacy. Acocella, a leading expert on economic policy, counters these unfounded criticisms, making the convincing case for the foundation, coordination and reach of government action through economic policy. Arguing for the governmental potential to devise democratic, fair and effective institutions and policies, this book also demonstrates the validity of the principles outlined by Frisch and Tinbergen, amongst others, for controlling the economy, in a strategic context, equivalent to the rational expectations assumption. Demonstrating how unconventional monetary policies (such as macro-prudential regulation, new fiscal rules, and new forms of international policy coordination) can offer an effective response to the multiplicity of current economic issues, the recent financial crisis arguably indicates that economic policy must once again take centre stage as the applied complement to mainstream economic theory.

The recent financial crisis has demonstrated the dangers of ignoring the factors that led to previous crises, and the effectiveness of the policies designed to deal with them. Over time, these macroeconomic policies have evolved, oscillating between state intervention and a free-market approach. Following a story that runs from the pre-Great Depression era up until the Financial Crisis of 2007-11, this book reveals an intimate connection between new macroeconomic ideas and policies and the events in the real economy that inspired them. It does this in an accessible, easy-to-follow style, first by focusing on the developments of economic theories and policies, and then by concentrating on the design of domestic and international institutions and economic governance. Written by three leading experts on the history of economic policy, the book is ideal for graduates and undergraduates studying macroeconomics, monetary policy and the history of economic thought.

Government interventions in market failures can encounter objections from those who doubt their efficacy. Acocella, a leading expert on economic policy, counters these unfounded criticisms, making the convincing case for the foundation, coordination and reach of government action through economic policy. Arguing for the governmental potential to devise democratic, fair and effective institutions and policies, this book also demonstrates the validity of the principles outlined by Frisch and Tinbergen, amongst others, for controlling the economy, in a strategic context, equivalent to the rational expectations assumption. Demonstrating how unconventional monetary policies (such as macro-prudential regulation, new fiscal rules, and new forms of international policy coordination) can offer an effective response to the multiplicity of current economic issues, the recent financial crisis arguably indicates that economic policy must once again take centre stage as the applied complement to mainstream economic theory.

The European Union is at a crossroads. This book analyzes the historical roots of the EU's monetary and financial institutions in order to better understand its struggle to maintain an economic and monetary union, as well as the ongoing problems facing the Euro. The institutions of the EU are based on the operation of free markets, a common monetary policy, and the European Central Bank. These founding policies have created many of the imbalances at the root of the ongoing European recession. Reemerging threats of populism and localism are poised to further disintegrate the European construction and may spark fierce opposition between countries. Acocella engages with these risks, suggesting detailed actions for reform within the EU and its institutions that may steer it away from further conflict, allowing it to better serve its member states and citizens.

The European Union is at a crossroads. This book analyzes the historical roots of the EU's monetary and financial institutions in order to better understand its struggle to maintain an economic and monetary union, as well as the ongoing problems facing the Euro. The institutions of the EU are based on the operation of free markets, a common monetary policy, and the European Central Bank. These founding policies have created many of the imbalances at the root of the ongoing European recession. Reemerging threats of populism and localism are poised to further disintegrate the European construction and may spark fierce opposition between countries. Acocella engages with these risks, suggesting detailed actions for reform within the EU and its institutions that may steer it away from further conflict, allowing it to better serve its member states and citizens.

In the age of globalisation both domestic and foreign economic policies play an important role in determining firms' strategies. Understanding such policies is an essential part of the cultural background of managers at all levels of a firm. At the same time, firms' choices have a greater impact on economic policymaking in a global economy, as the range of alternatives open to them expands. In this textbook, Professor Acocella analyses both sides of this relationship. Special emphasis is placed on current issues: in policymaking on the basis of social choice principles and the normative and positive theory of economic policy; and issues concerning the establishment of international public institutions that can match the global reach of the private institutions (markets and firms) that generate many of today's economic challenges. Broad in scope, this book is aimed at students who have completed an introductory course in both micro and macroeconomics.

In the age of globalisation both domestic and foreign economic policies play an important role in determining firms' strategies. Understanding such policies is an essential part of the cultural background of managers at all levels of a firm. At the same time, firms' choices have a greater impact on economic policymaking in a global economy, as the range of alternatives open to them expands. In this textbook, Professor Acocella analyses both sides of this relationship. Special emphasis is placed on current issues: in policymaking on the basis of social choice principles and the normative and positive theory of economic policy; and issues concerning the establishment of international public institutions that can match the global reach of the private institutions (markets and firms) that generate many of today's economic challenges. Broad in scope, this book is aimed at students who have completed an introductory course in both micro and macroeconomics.

This is the first English-language edition of Nicola Acocella's highly successful undergraduate text, originally published in 1994. Aimed at advanced undergraduate and graduate students, Acocella's emphasis is on the persistence of market failures and the full range of issues connected to public intervention and regulation. Very impressive in its scope, (including welfare economics, social choice, public economics as well as macro- and micro-economic theory and policy), Foundations of Economic Policy is user friendly with a comprehensive index, summaries, key word lists and pathways designed for both rigorous and intuitive study.

In developing a new and highly innovative theory of economic policy, this book deals with conflicts between strategic actions by public and private agents. It builds on the Lucas critique but also applies the tools introduced by Tinbergen and Theil to dynamic policy games, and from there derives a new theory of economic policy. Its main propositions describe such properties in the models currently used for policy-making as neutrality and equilibrium existence, uniqueness, and multiplicity. These properties are key to understanding the impact of concepts such as rational expectations, time inconsistency, communication and the use of policy announcements. As the numerous examples show, they are useful both for model building and for devising optimal institutions. The Theory of Economic Policy in a Strategic Context is an essential but accessible tool for economic researchers involved in policy questions.