. however, how exactly monetary analysis is implemented and how it is used for monetary policy decisions depends crucially on the empirical relationship between monetary aggregates, inflation and other macroeconomic variables of interest. the question can be put in simple terms : how monetarist should one be? and my simple and agnostic answer is : as monetarist as the empirical evidence supports. there is a well - established long - run relationship between money growth and inflation in the euro area : monetary aggregates in the euro area prove to have explanatory power for longer - term inflationary developments. this is documented, not least, by current research carried out in the bundesbank. as long as these relationships hold, there are convincing empirical reasons for paying close attention to monetary developments in the policy making process. beyond this issue, there are further conceptual reasons why money should matter : it offers a suitable longer term perspective for internal decision - making and external communication, and thus enhances credibility. of course, this latter point is of general importance for central banks but it has been especially important for the eurosystem and its monetary policy at the beginning of the third stage of emu. in 1999 the eurosystem did not possess its own established track record. thus, a strategy making use of the empirically established long - term relationship between money growth and inflation was especially important to gain and secure credibility right from the outset of emu. and all this is irrespective of questions as to whether there is an active role for money to play in the transmission mechanism, i. e. whether money is exogenous or endogenous. this brings me back to the more academic criticism that stems from the new - keynesian school of thought. despite all the undoubted merits of such an approach – sound theoretical principles, microfoundations, general equilibrium character – it also has its shortcomings. firstly, the transmission mechanism is specified too leanly and mechanistically. for example, one prominent channel for the role of money in this class of models is a real - balance effect – something that is empirically difficult to verify and arguably too simplistic in the present - day world of financial markets. some years ago, in the controversy between monetarists and keynesians allan meltzer argued that : “ the difference between the keynesians and us is less in the nature of the process than in the range of assets considered “. applied to the current environment, those

gent sejko : achievements in 2022 and setting the milestones for 2023 address by mr gent sejko, governor of the bank of albania, at the year - end event organised by the albanian association of banks, tirana, 15 december 2022. * * * honourable aab chairman, dear ladies and gentlemen, as every year, it is a pleasure for me to joint this special meeting with banking industry, sharing our achievements and efforts made throughout the past year, the most meaningful experiences, and setting the milestones for 2023. let me first focus on the overall performance of the albanian economy. the sharp upsurge of prices and inflation in international markets in the wake of russia's war against ukraine shaped the performance of the albanian economy over the course of 2022. this supply - side shock caused another steep challenge for the albanian economy, driving to the need for a review of public economic policies and business - plans in both private sector and banking industry. in this context, i would like to highlight that the albanian economy was in sound positions when this shock hit, following the rapid rebound from the pandemic - related shocks in 2021. also, the monetary and financial stability was consolidated. the sound financial balance sheets of albania, the strengthened confidence in banking system, and the reduced risk premia reflect this stability. also, the latter is anchored in the positive experience that we both, public institutions and you, as financial sector, have gained in tackling such shocks. in addition, the monetary policy normalisation we have embarked on has established the premises for controlling inflation and safeguarding the economic and financial stability of albania. in this view, i would like to welcome the positive role played by the banking industry over 2022, by maintaining a positive approach towards lending to private sector and taking the necessary measures to manage added risks in your balance sheets. i am confident that these measures, and others we may take in this regard, will pave the way for a rapid return to normality. though risks remain present, our projections suggest inflation will return to target within the first half of 2024 and the albanian economy will continue to maintain a positive growth pace throughout this period. as important actors in the economic and financial life of albania, i would like to reemphasise that our decision making should be forward - looking, decisive and courageous. albania has a solid economic growth prospects in both medium and long term. they have enabled the continuous expansion of economy and of