ABSTRACT
This conclusion presents some closing thoughts on the concepts covered in the preceding chapters of this book. The book considers the effect of monetary volatility on the volatility of financial asset prices and real economic activity. It examines the effect of exchange rate volatility on international trade flows since the introduction of flexible exchange rates in the post financial deregulation environment. Financial policy affects the market via rules for exchange trading and dealer/market-maker behaviour, rules of disclosure and sales practice, to mention but a few. Monetary policy has a prime objective in controlling inflation which may, however, be compromised by other objectives such as keeping unemployment low. Policy makers would appear to be looking for answers by no longer attempting to control the money supply directly but indirectly via interest rate policy. The result that fiscal policy actions have significant effects on financial asset volatility is of significance to policy makers.
