A mere six quarters could therefore simply be too short a time horizon to allow for money to begin transmitting in any significant way its impact on inflation. The Fischer et al. paper will prove to be particularly valuable if it encourages further research to investigate the relevance and stability of its findings under different inflation regimes, in different economies and over longer time horizons. In this context, let me now briefly turn to the Swiss experience with money and monetary policy. 3. SNB experience using information from monetary aggregates  With the collapse of the Bretton Woods system, the SNB had to search for a new policy framework. 1 From 1974 until the end of the 1990s the SNB announced monetary targets; first for M1, and eventually for the monetary base. In 1978, the SNB abandoned its monetary target for a short period in favor of a nominal exchange rate target. 2 During the second half of the 1990s, the monetary base became instable. The SNB faced increasing difficulty using a money target for MO, let alone to communicate through them. Finally, the SNB decided to adopt an altogether new monetary framework in an effort to increase the clarity, transparency, and flexibility of the conduct of its monetary policy. The new concept, introduced in January 2000, is based on three elements: an explicit definition of price stability, an inflation forecast as the main indicator for policy decisions, and a range for the 3-month LIBOR as the operative target.
8  McKinsey (2005, 2006)  9  King (2006)  BIS Review 107/2006  3  case of the SNB, the flexible nature of the policy framework and the importance attached to money and credit variables means that in an effort to avoid potential long-term financial distortions from emerging, the Governing Board could conceivably tighten monetary policy even if our inflation forecast signals no imminent inflation threat. 5. References  Baltensperger, Ernst, Thomas J. Jordan and Marcel Savioz, 2001. The Demand for M3 and Inflation Forecasts: an Empirical Analysis for Switzerland. Weltwirtschaftliches Archiv, vol.137 n.2, pp.244-272. Fischer B., M. Lenza, H. Pill and L. Reichlin (2006). Money and monetary policy: The ECB experience 1999-2006. Friedman, Milton, 2005. A natural experiment in monetary policy covering three episodes of growth and decline in the economy and the stock market. Journal of Economic Perspectives, vol.19 n.4, pp.145-150. Issing, Ottmar, 2002. Monetary Policy in a Changing Environment. Contribution to the Jackson Hole Symposium on "Rethinking Stabilization Policy", Federal Reserve Bank of Kansas City. Jordan, Thomas J., Michel Peytrignet, and Georg Rich, 2001. The role of M3 in the policy analysis of the Swiss National Bank. In: Klöckers, H.-J., and C. Willeke, eds., Monetary Analysis: Tools and Applications, European Central Bank, pp.47-62. Jordan, Thomas, und Marcel Savioz, 2003. Sind Kombinationen von Prognosen aus VAR-Modellen sinnvoll? Eine empirische Analyse mit Inflationsprognosen für die Schweiz. Quartalsheft der SNB, 4, Dezember 2003. King, Mervyn, 2006. Speech at the Dinner for Kent Business Contacts, Ashford, Kent, United Kingdom. McKinsey & Company.