Wonk alert. The ECB has just published a book robustly defending monetary analysis and arguing that, taking a medium time horizon, monetary indicators – whose usefulness has been doubted in recent years – were never really wrong.

“One does not need to rely on exceptional or aberrant behaviour in the financial sector to explain developments in money and credit over the past 18 months,” says an accompanying statement. “Once the prevailing level of economic activity is taken into account, it appears that money and credit have actually behaved in line with pre-crisis regularities.”

Edited by two ECB big cheeses Lucas Papademos and Jürgen Stark, the book is the fruit of three years’ analysis. It comes in two parts: the first, explaining the theory and practice of monetary analysis; the second, containing research into how that analysis can be improved. Don’t expect any sudden changes in the ECB’s monetary analysis, though: the research since 2007 that has gone into this book has already been incorporated into the central bank’s toolkit.

So why publish the book? Read more