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Nearly a year ago - January 2 - I wrote a blog post on what I termed the Weidmann rule. In the blog post I argued that the ECB is basically following a rule - named after Bundesbank boss Jens Weidmann - which is asymmetrical. The ECB will tighten monetary conditions in the event of a positive aggregate demand (velocity) shock, but will not ease in the event of a negative demand (velocity) shock to the euro zone economy.
Over the past six years the “hawks” among UK and US central bankers have been proven wrong. They have continued to argue that a spike in inflation was just around the corner because monetary policy was “high accommodative”. Obviously Market Monetarists have continued to argue that monetary policy has not been easy, but rather to tight in the US and the UK – at least until 2012-13.
Everybody has been following events in the Russian markets this week, but fewer have kept an eye on Russia's smaller neighbour Belarus, but the small country is seeing some serious contagion from Russia.
Former Soviet central bank governor Victor Gerashchenko about present-day CBR governor Elvira Nabiullina:
It has been a busy year for me - it has especially been the Russian-Ukrainian crisis, which has kept me busy. However, I thought that this week would be fairly calm - I didn't have any traveling planned, not a lot a meetings scheduled and I had not expected to be too busy.
H. L. Mencken: “For every problem, there’s a simple solution. And it’s wrong.”
This is Sara Sjolin at MarketWatch.com: