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HB3730.P5152007 330.01(cid:2)5195—dc22 2006025756 PrintedintheUnitedStatesofAmerica. 10987654321 To Hope My daughter and number one fan Contents ListofIllustrations ix ListofTables xiii Preface xv Acknowledgments xix ABriefIntroductiontotheFinancialMarkets xxi AbouttheAuthor xxxiii PARTONE CentralBanks CHAPTER1 AnOverviewofCentralBanks 3 CHAPTER2 BankofEngland 15 CHAPTER3 EuropeanUnionandtheEuropeanCentralBank 34 CHAPTER4 BankofJapan 54 CHAPTER5 BankofCanada 67 CHAPTER6 ReserveBankofAustralia 81 vii viii CONTENTS CHAPTER7 People’sBankofChina 92 PARTTWO EconomicIndicators CHAPTER8 AnOverviewofInternationalEconomicIndicators 99 CHAPTER9 EuropeanIndicators:EurostatandNationalStatistics 132 CHAPTER10 UKIndicators 179 CHAPTER11 JapaneseIndicators 201 CHAPTER12 CanadianIndicators 220 CHAPTER13 AustralianIndicators 236 CHAPTER14 ChineseIndicators 250 AppendixA:KeyIndicatorsbyCountryandIssuingAgencies 258 AppendixB:NationalIncomeandProductAccountsvs.Systemof NationalAccounts 262 AppendixC:IndustrialClassificationSystems 266 Glossary 269 Bibliography 275 Index 285 List of Illustrations Figure2.1 BankofEngland’sPolicyInterestRate 21 Figure2.2 ConsumerPriceIndexandRetailPriceIndex ExcludingMortgageInterestPayments 23 Figure2.3 AverageEarnings 24 Figure2.4 HalifaxHousePrices 26 Figure2.5 PoundSterlingandtheU.S.Dollar 31 Figure2.6 UKandEMUGrossDomesticProduct 32 Figure2.7 BankofEnglandandEuropeanCentralBank InterestRates 32 Figure3.1 ECBPolicyInterestRate 50 Figure3.2 M3MoneySupplyandHarmonizedIndexof ConsumerPrices 51 Figure4.1 YenperU.S.Dollar 57 Figure4.2 TheNikkei 58 Figure4.3 BankofJapanDiscountRate 63 Figure5.1 TheConsumerPriceIndexandtheBankofCanada CoreRate 70 Figure5.2 BankofCanadaandFederalReserveTargetInterest Rates 72 Figure5.3 CanadianDollarandtheU.S.Dollar 77 Figure6.1 ConsumerPriceIndex 84 Figure6.2 ReserveBankofAustraliaandFederalReserve TargetInterestRates 86 Figure7.1 People’sBankofChinaPrimeLendingInterestRate 95 Figure8.1 Germany—AComparisonofTwoUnemployment Rates 103 Figure8.2 UK—TwoMeasuresofConsumerPrices 104 Figure8.3 GroupofSevenGDPGrowthin2005 117 Figure8.4 UnemploymentintheEMUCountriesPlustheU.S., Japan,andAustralia 125 Figure9.1 GDPintheEMUPlustheU.S.andJapan 135 Figure9.2 HarmonizedIndexofConsumerPricesforthe12 EMUCountries 139 Figure9.3 ProducerPricesforthe12EMUCountries 141 Figure9.4 UnemploymentRateforthe12EMUCountries 143 ix