Two developments are currently shaping Europe's financial and foreign exchange markets: Innovations, including the private use of the ECU, and the erratic fluctuations of the US dollar. Professor Nydegger analyses the causes and effects of these developments from the perspective of the world...

This paper presents a systematic empirical relationship between money and subsequent prices and output, using US, euro area and Swiss data since the 1960-70s. Monetary developments, unlike interest rate stance measures, are shown to provide qualitative and quantitative information on subsequent...