institutions. staff members also regularly visit the other central bank, spending several days discussing research work or technical issues. on some occasions, these stays even run over several months. since 2003, six ecb staff members have spent a total of 40 months at the federal reserve board and district banks as part of the ecb ’ s external work experience programme. and i do not mention here the many many relationships that are established between the national central banks of the eurosystem and the federal reserve system. conclusion ladies and gentlemen, allow me to conclude. the euro area and the united states are large economic blocs which are, at the same time, largely open to world markets. the last decades, in particular, have witnessed a tightening of the trade and financial linkages and the bilateral relationships between the united states and the euro area have been reinforced. as a result, central banks worldwide, and in particular the federal reserve and the eurosystem, always keep an eye on partners ’ economic, monetary and financial developments. the ecb and the federal reserve system have many opportunities to share their experience and technical expertise, whether through discussions within international meetings or in informal ways through conferences, staff visits, personal contacts of all nature, including confident personal relationships at the level of chairmen. i would also like to point to one example of cooperation that might look unusual. last year, we had one case of cooperation in the domain of culture and arts, as the federal reserve exhibited a remarkable set of the art works of its collection at the premises of the ecb in frankfurt. this art exhibition was another symbolic illustration of our close crossatlantic ties, in which tonight ’ s journalist prize ceremony also plays a part. i have always been convinced that a very strong relationship between both sides of the atlantic is essential for the stability and continued prosperity of our respective continents but also for the continuing stability and prosperity of the global economy itself. this is today particularly true in a period of immense opportunities and of significant challenges. thank you very much for your attention. references bayoumi t. and a. swiston ( 2007 ), foreign entanglements : estimating the source and size of spillovers across industrial countries, imf working paper 07 / 182. calza a. and s. dees ( 2007 ), the euro area in the global economy : its sensitivity to the international environment and its influence on global economic developments, in di mauro and anderton ( eds. ), the external dimension of

investments at stake in the united states. the situation is fairly similar in the other direction, with around €630 billion from us firms being invested in the euro area, principally in the services industries of belgium, luxembourg and the netherlands. the current levels of fdi flows show that these bilateral links will continue to strengthen in the future. portfolio investments from the euro area to the united states are also of an impressive magnitude. the stock of us portfolio assets held by the euro area reached almost €1. 5 trillion last year, this being about a third of european holdings worldwide. the euro and the us dollar are also the currencies of denomination of the majority of portfolio assets traded. more than three - quarters of portfolio assets worldwide are denominated in euro and in dollars, according to the available data. 1 all in all, the united states and the euro area are large trade and financial partners. arguably, the united states seems to have a greater impact on world business cycles, probably mainly because of the growing importance of financial channels in the transmission of macroeconomic shocks. for both the united states and the euro area, trade and financial channels have, of course, direct consequences for monetary policy. for instance, the increase in imports from low - cost countries has ensured that import price inflation has remained contained. import prices declined in the period 2001 - 2003 in the euro area and remained stable throughout the following years. however, commodity prices experienced higher levels of inflation as a result of the strong growth of emerging economies such as india and china. globalisation can therefore have mixed effects on inflation. finally, it has also been argued that both the united states and the euro area witnessed a loosening of the link between inflation and activity because of increased openness. this has important implications for monetary policy. diversity within large economic blocs – a common challenge for monetary policy although we have seen that the environment outside the euro area and the united states has gained importance, the internal economic situation remains a major focus of attention within central banks. almost nine years after the euro changeover, euro area macroeconomic developments continue to mask some diversity across the euro area countries. nonetheless, this diversity in terms of inflation and output growth is currently of approximately the same scale as in the united states. more specifically, euro area inflation differentials have exhibited a strong decline in recent decades. starting from an unweighted standard deviation of around 6 percentage points at the beginning of the 1990s, inflation dispersion has fallen to around only