At present, UK monetary policy is founded on an inflation target and central bank independence. Critically assess the extent to which the theoretical and empirical work of macroeconomists has influenced this current monetary policy framework.

Developments in macroeconomic policy are generally as a result of critical analysis over time and each of the Macroeconomists reviewed in this essay have provided this for their predecessors. In our current framework it is evident that the policies applied are all influenced, in part, by these economists.
To understand the need for an inflation target it is important that we understand what the real costs of inflation are and why inflation must be controlled. The consensus view is that inflation, especially if it is unanticipated, has real economic costs (Snowdon and Vane, 2005). In terms of anticipated inflation it is believed that there are still welfare costs. These are shoe leather costs and menu costs (Snowdon and Vane, 2002). Shoe......

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Title: Uk Economic Policy
Approximate Word Count: 1470
Approximate Pages: 6 (250 words per double-spaced page)

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