Coordination between monetary and fiscal policy  An occasional criticism of the new arrangements is that they impede proper coordination of monetary and fiscal policy. Two main reasons are usually advanced. First, the monetary and fiscal authorities may have conflicting objectives which they are free to pursue. Second, even if they have the same objectives they may be uncertain of each other’s intentions. Neither concern is, I believe, well-founded. The first stems from a line of academic thinking which assumes that the central bank attaches more importance to the control of inflation than the Government, which in turn gives greater weight to output and employment. Hence when setting interest rates and fiscal policy, the two authorities could be pulling in opposite directions, and, realising this, might pull harder to offset the actions of the other, resulting in a distorted policy mix. Although such an outcome is possible in principle elsewhere, this problem does not arise in the UK. The reason is simple. The Chancellor sets the objectives for both fiscal and monetary policy. It is the Chancellor who sets the inflation target and then delegates the responsibility to achieving that to the Monetary Policy Committee. So no conflict arises. Nor are the two authorities unaware of what the other is doing. A Treasury representative attends meetings of the MPC, and one of his duties is to brief the Committee on fiscal policy developments. This may take the form of advance notice of the overall fiscal stance to be announced in the Budget.
Ardian Fullani: The importance of economic research Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the workshop “Economic research in South-Eastern Europe”, Tirana, 15 November 2007. *  *  *  Dear ladies and gentlemen! It is a great pleasure to be here today and open the proceedings of the workshop “Economic research in Southeast Europe“. First, allow me to express my thanks to the representatives from the respective central banks for their participation in this workshop and all the other guests present today. Let us hope that this workshop will serve as a catalyst for a more intensified exchange of experiences among our region in the field of economic research. This process is of special importance with a view to improving the standards of economic research and for enhancing our know-how in this area. Undoubtedly, timely and accurate economic research is vital for undertaking more sound economic policies for boosting a stable and non-inflationary growth and for coping with various risks under a dynamic and rapid integration of our economies. From a central bank’s viewpoint, economic research should aim at reaching an optimal balance between the significance to the monetary policy or financial stability, their quality and timely availability. When compared to the academic economic research, a central bank’s economic research should manifest the same quality, but be positioned on assisting the monetary policy decision-making process. Otherwise, their added value is overwhelmingly reduced.