Open Macroeconomics in an Open Economy

Abstract

There are three pillars to the new Labour Government’s approach to economic policy; delivering macroeconomic stability, tackling supply‐side barriers to growth and delivering employment and economic opportunities to all. This lecture focuses on the new Government’s reforms to deliver macroeconomic stability and the importance of open and transparent institutions and procedures. The lecture outlines four principles for macroeconomic policymaking which flow from changes in the world economy and the world of economic ideas over recent decades. It explains each principle and shows how they are being translated into practice in the macroeconomic policy reforms that the new Government has introduced at the Treasury and the Bank of England.