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A guide to how economic policy is made in modern Britain. It is designed to help the reader understand how the policy process works: who the key actors are, the links - and the gaps - between theory and practice, and the difficulties of making policy in the real world. The book is divided into three main sections. The first sets the context in which policy-makers operate: the historical context, with a survey of policy since 1945; and the international context over the same period. The second section looks at the policy-making process itself, with a separate chapter on Europe. Then there is a series of thematic chapters, focusing on some key policy areas, including inflation, labour markets and the exchange rate.