Monetary policy faces difficult task in economies going through structural reforms: having to stabilise fluctuations around the trend, central banks have also to deal with a trend that is itself subjected to shifts, as a result of reforms. This book proposes some perspectives on these issues.

Monetary policy faces a particularly difficult task in most economies going through structural reforms: having to stabilise fluctuations around the trend, central banks have also to deal with a trend that is itself subjected to shifts, as a result of reforms. This book proposes some perspectives on these issues, with various contributions from both practitioners and academics, emphasising how rather simple techniques can be conveniently used to solve complex problems.Several issues are hence considered, each emphasising a particular aspect of the theme proposed: forecasting inflation, with the experience of the Reserve Bank of New Zealand being taken as an example, since this country went through drastic structural change; understanding underlying trends of inflation, focusing on expectations and data revision, wage-bargaining process and more generally supply effects, since structural change magnifies them; formulating policy recommendations, the example taken is the strategy towards the euro for Eastern European countries; and assessing risks of sudden stops.

Preface
The Reserve Bank's Forecasting Performance
The Relationship Between Inflation Expectations Survey Data and Inflation
On the Use of the Kalman Filter for Monetary Policy Purposes
Identifying the Wage Bargaining Process in Germany
Variable Capital Utilisation, Short-Run Elasticity of Supply and the Effectiveness of Monetary Policy
Estonia at the Threshold of EMU Chr(45) The Inflation Criterion
The Importance of the Bank-Lending Channel in Estonia: Evidence from Micro-Economic Data
Are Real Exchange Rates of Acceding Countries Consistent with Sustainable Current Accounts? A FEER Approach
Sudden Stops in Emerging Economies and Credit Constraints
Index.