In the United States and in the United Kingdom, there is a lag of one to two years between changes in monetary aggregates and changes in inflation. 3 In the euro area, the low-frequency component of M3 growth leads the low-frequency component of HICP inflation by about two years.
Prudential regulation has received a careful overhaul based on experience from the most recent global turmoil. Fourth, the public defined-benefit pension system was replaced by a privately funded defined-contribution system, in which workers hold individual retirement accounts operated by specialized private asset managers. This has had the double effect of nourishing deeper capital markets while making the pension system sustainable in the long run.