We wrote this book as the result of a number of passionate, and it must be admitted heated, conversations on the EMU question before Christmas 2011, around the time of the Fiscal Compact, which led to a first draft in January this year. We are putting the finishing touches to the work on the twentieth anniversary of the UK's exit from ERM, which occurred on 16th September 1992. European events continue to dominate the UK agenda, but now also the sentiment in global financial markets. We each have grown up with the spectre of the European question: How far should the UK integrate into the...

Many of the assumptions that underpin mainstream macroeconomic models have been challenged as a result of the traumatic events of the recent financial crisis. Thus, until recently, it was widely agreed that although the stock of money had a role to play, in practice it could be ignored as long as we used short-term nominal interest rates as the instrument of policy because money and other credit markets would clear at the given policy rate. However, very early on in the financial crisis interest rates effectively hit zero percent and so central banks had to resort to a wholly new set of...

State-of-the-art research from academics and policymakers on the role of and challenges to monetary policy during the ongoing financial crisis.