He is a Scottish economist with interests in a wide range of topics in International Finance and Macroeconomics and a considerable amount of his research focuses on the economics of exchange rates and currency regime choice.

[6] With a wide range of interests focused around exchange rates through to macroeconomics and international finance, he has published over 130 articles in peer-reviewed journals and authored or edited over 15 books.

The Behavioural Equilibrium Exchange Rate (BEER), developed jointly with Peter Clark at the International Monetary Fund, has been widely applied by central banks and financial researchers to assess the extent of mis-alignment between major world currencies.

[citation needed] the BEER approach has been widely used by central banks, financial institutions and government agencies to determine the so-called Fair Value of currencies and MacDonald was commissioned by the European Commission to apply the BEER approach to advise on the final lockdown Fair Value rates of the Euro Zone currencies.

In terms of policy-based research, he has proposed phasing out the Barnett Formula in favour of fiscal autonomy in the Scottish Parliament.

He has also been a keen musician since his teens playing guitar in a number of Jazz Rock bands, such as Flyer, in the central belt of Scotland, and Sidewinder in the North West of England.