ABSTRACT
Effective economic policy requires constant vigilance and extreme flexibility. The whole thrust of the argument has been that, given the nature and the performance of the global economy in the 1990s, economic policy, and from region to region within one country, in any given period of time. On the contrary, a sound monetary policy is the foundation upon which other economic policies rest. In short, whatever the situation of the economy with respect to unemployment and inflation, there is no guarantee that good monetary policy alone will make it better; but bad monetary policy could certainly make it worse. In the phases of the cyclical loop the considerations for fiscal policy are similar to those of monetary policy, except that the impact of changes in fiscal policy can be more direct. Productivity and skills depend in turn on the amounts, types, and quality of training that members of the labor force are able to acquire.
