Separation of Powers and the Macroeconomic Constitution

The rise of independent institutions, particularly central banks, and the increasing significance of the interplay between monetary, fiscal, and financial policies demand a critical reassessment of modern macroeconomic constitutions and their institutional architectures.The paper's core focus lies in the distribution of macroeconomic powers, both functionally and institutionally, applying the constitutional doctrine of separation of powers to the macroeconomic constitution and its three main policies.By exploring the interactions and interdependencies among internal and external monetary, fiscal, and financial policies, it offers insights on how to enhance the framing of these policies to achieve an optimal macroeconomic policy mix.Rejecting the extremes of concentrating macroeconomic powers solely in the hands of a political majority or enforcing strict separation, this study proposes a middle ground: a balanced or partial separation of powers that enables institutional interactions and coordination without subordination.The paper also analyses the main institutional processes of governance and coordination of macroeconomic policies: the market process, the adjudication/judicial process, and the political process with varying degrees of delegation to independent authorities. Drawing on a hybrid approach that encompasses both private and public functions, this study advocates for a comprehensive institutional framework that incorporates all available alternatives, assigning a crucial role to public powers while acknowledging the growing importance of political and independent institutions