What central banks have learned: lessons from pre-EMU Europe

This paper examines the intentions and outturns of central bank policies in Europefrom the collapse of the Bretton Woods system of fixed exchange rates until the start ofEMU in 1999. It focuses on the lessons that can be drawn from the three dominant policy strategies of money targeting, exchange rate targeting and inflation targeting. Several of the lessons that are relevant to the euro area are shown to have been incorporated into the monetary policy strategy of the European Central Bank.