ABSTRACT
Economic policy has a far broader significance than the technicalities of macroeconomic management suggest. Economic policy seeks to achieve objectives such as a high rate of growth, a low and stable rate of inflation and high levels of employment. Over time it has become more difficult for governments to control what happens in their domestic economies because of a process that is often referred to as 'globalisation'. The making of economic policy lies at the very heart of the government machine, what is sometimes referred to as the 'core executive'. The role that the Treasury plays in the policy-making process is rather different from that of equivalent departments in other advanced industrial countries. An old Treasury joke refers to the Bank of England as the 'Treasury's East End branch', but the Bank of England has always been a power centre in its own right, a role that was enhanced after 1997.
