DAVID G MAYES is BNZ Professor of Finance at the University of Auckland, former Advisor to the Board at the Bank of Finland and Chief Manager at the Reserve Bank of New Zealand. He has published widely on economic integration and provided advice to central banks around the world.MATTI VIREN is Professor of Economics at the University of Turku, and scientific advisor to the Bank of Finland. He has published widely on fiscal and monetary policy and has also served two years as a pre-accession advisor in the Polish Ministry of Finance.

• Introduction Measurement and Aggregation Aggregate Supply and demand in an Open Economy The Phillips Curve Regional and Sectoral Concerns Output, Unemployment and the Labour Market: The Okun Curve Asymmetry and the Role of the Public Sector Monetary Policy Fiscal Responses References