The crucial point to stress here is that the resilience of the lead of trend money growth over trend inflation over time, and across radically different monetary regimes, clearly suggests that such a lead is a structural feature of the economy – that is, embedded in the structure of the system so as to be invariant to occasional changes in the monetary regimes.
Our Bulletin also warned of a further loss in competitiveness which seems in prospect for 2002. This will have knock-on effects throughout the various sectors of the economy and would be exacerbated if there were a substantial appreciation of the euro.