Macro-Economic Dynamics and Policy

To develop better policy solutions to our economic and societal priorities we need to understand the dynamics of the macro-economy: that is, the interaction between the shocks affecting our economy, the propagation mechanisms through which these shocks are transmitted throughout the economy, and the monetary, macroprudential and fiscal policy choices made by the relevant authorities.

Monetary policy is the most flexible, and most frequently used official economic lever. There is hardly a corner of the economy monetary policy fails to reach, influencing growth, employment, inflation, mortgage costs, the exchange rate, and other financial markets.

Monetary policy has faced unprecedented challenges since the Great Financial Crisis, with policy interest rates close to rock bottom for a decade. Central banks have innovated with new instruments such as Quantitative Easing. NIESR is at the forefront of analysing what monetary policy should do next as it faces the challenges of higher inflation and normalizing balance sheets and interest rates, as well as understanding the effects of macroprudential policy tools.

Monetary theory & policy

Projects

Publications

Banknotes and coins in front of the flag of the European Union
publication

The Macroeconomic Effects of Re-applying the EU Fiscal Rules

20 Nov 2023

National Institute Economic Review

Big Ben and Houses of Parliament with Money
publication

Another Look at a Sensible Fiscal Policy for the Sharp Rise in Government Debt

20 Nov 2023

National Institute Economic Review

Increasing interest rate on the deposit.
publication

Monetary Policy: Prices versus Quantities

20 Nov 2023

National Institute Economic Review

Chain with missing link
publication

Commentary: The Missing Link: Modelling Potential Output and Fiscal Rules

20 Nov 2023

National Institute Economic Review

Bag with dollars money in vice.
publication

The Fed Has Overtightened

08 Nov 2023

Global Economic Outlook Box Analysis

Depiction of houses with percentages above piles of coins
publication

The Impact of Rising Interest Rates on Housing Costs

09 Aug 2023

UK Economic Outlook Box Analysis

Glass globe on business oaoer
publication

Mr Putin and the Chronicle of a Normalisation Foretold

03 Aug 2023

Discussion Papers

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Blog Posts

Blog

Improving UK Living Standards

Arnab Bhattacharjee

Adrian Pabst

12 Feb 2024

6 min read

Blog

Public Debt Sustainability and Fiscal Rules

Stephen Millard

Benjamin Caswell

05 Feb 2024

4 min read

Blog

Linking Geopolitics to the Macroeconomy

Jens Larsen

Stephen Millard

22 Jan 2024

6 min read

Blog

UK Investment Past and Prospects: A Framework for Analysis

Catherine Mann

01 Dec 2023

6 min read

Blog

The Outlook for the UK Economy

Stephen Millard

13 Nov 2023

8 min read

Blog

UK Wage and Price Inflation and the Middle East Conflict

Paula Bejarano Carbo

Stephen Millard

23 Oct 2023

6 min read

Blog

Higher For Longer: US Bond Yields, Implications for the Economy, Markets and Currencies

Paul Mortimer-Lee

28 Sep 2023

10 min read

Blog

The Truss/Kwarteng Mini Budget: One Year On

Stephen Millard

25 Sep 2023

7 min read

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News

Events

People