Economic Policy ─ Theory and Practice

"A revolutionary approach to teaching in macroeconomics...This book will undoubtedly influence researchers and policymakers for many years to come."---Philippe Aghion, Harvard University

"A unique combination of positive and normative analysis...paving the way for a fresh approach to understanding and teaching economies."---Erik Berglof, Chief Economist, EBRD

"This book is a book I would have loved to write."---Olivier Blanchard, MIT and Chief Economist, IMF

"A remarkable achievement...Let's hope Economic Policy becomes widely used. If so, it will revolutionize the teaching of macroeconomics."---Alan S. Blinder, Princeton University, former Vice-Chairman of the Board of Governors of the Federal Reserve System

"A superb job. A must-read for anyone who wants to understand the turbulent times we live in."---Raghuram Rajan, Chicago's Booth School of Business

"An indispensable guide for economists, policymakers, and students."---Jacques de Larosiere, BNP-Paribas, former IMF Managing Director

"Students and policymakers alike will find this book useful, engaging, and thought provoking."---Philipp Hilderbrand, Chairman of the Governing Board, Swiss National Bank

"A fascinating example of how economics can be used to explain a complicated world and come up with convincing policy conclusions."---Hans-Werner Sinn, University of Munich and CESifo

"A remarkable achievement that fills an enormous gap."---Guido Tabellini, Bocconi University

"Not just a textbook but also a reflection on the causes and effects of the current global financial and economic crisis."---Yongding Yu, Chinese Academy of Social Sciences

"Extremely useful not only for graduate students but also for policymakers and practitioners like myself."---Marco Buti, Director-General for Economic and Financial Affairs, European Commission

Written by four recognized experts with senior experience in research and government, this text is the first comprehensive survival kit for students and practitioners of economic policy. It is set to become an indispensable resource for everyone involved or interested in modern economic policy. Academic scholars willing to engage in policy discussions and students at graduate or advanced undergraduate levels will find it an essential bridge to the policy world.

What makes the book unique is that it combines, like no ther, fact-based analysis, state-of-the-art theories and models, and insights from firsthand policy experience at national and international levels. The book has grown out of ten years of experience teaching economic policy at the graduate level. It provides an intellectually coherent framework to understand the potentialities and limits of economic policy. It addresses positive dimensions (how do policies impact on modern economies?), normative dimensions (what should policymakers aim to achieve and against what should their actions be judged?) and political-economy constraints (which are the limits and obstacles to public intervention). It fills an important gap by reconciling in each major policy area stylized facts of recent economic history, key questions faced by contemporary policymakers, and essential lessons from theory that are captured and explained in a clear, concise, and self-contained way.

All major areas of domestic and international policymaking are coverd: fiscal policy, monetary policy, international finance and exchange-rate policy, tax policy, and longterm growth policies. The book concludes with a special chapter on the lessons of the financial crisis.

The authors are intellectually nonpartisan and they draw examples from various countries and experiences; from emerging markets to developing economies, shedding light when necessary on local specificities such as European Union rules and instruments. Economic Policy: Theory and Practice is the essential guide to economic policy in the new postcrisis context.

Agnes Benassy-Quere is director of the CEPII, the leading French research institute in international economics, and professor of economics at University Paris-Ouest and Ecole Polytechnique.
Benoit Coeure has served in various policy positions at the French Treasury and is professor of economics at Ecole Polytechnique in Paris.
Pierre Jacquet is executive director and chief economist at the French Development Agency (AFD) and professor of international economics at the Ecole des Ponts-Paris Tech.
Jean Pisani-Ferry is director of Bruegel, the Brussels-based economic think tank, and professor of economics at Universite Paris-Dauphine.