Empirical exercise based on annual data for the 57 year period, 1952–53 to 2009–10, shows that there is a co-integrating long-term equilibrium relationship among inflation, non-agricultural GDP and money supply. 1 From this exercise, the following inference can be drawn.
A key question for us at the ECB, as for other central banks, concerns the timing of the withdrawal of the medicine to avoid the threat of addiction or dependency. We have made clear that we will unwind enhanced credit support in a timely and orderly fashion.