Although they differ somewhat in the details of their policy strategies, policy tools, and communication practices, today virtually all inflation-targeting central banks interpret their mandate flexibly – that is, they treat the stabilization of employment and output in the short term as an important policy objective even as they seek to hit their inflation targets over the medium term.
The removal of exchange rate risk has both lowered transaction costs and enhanced price transparency. Moreover, there is no doubt that the introduction of the euro has facilitated the establishment of more cross-border links between financial institutions and has fostered the internationalization of business on the financial markets further.