energy supply needs to be expanded as quickly as possible, for one thing. this is one area in which the government can help. 2 / 6 bis - central bankers'speeches energy demand will certainly need to fall considerably. consumers and businesses need to step up to the plate here. the government can also further promote efforts to save energy. moreover, the government should provide, where possible, targeted support to particularly distressed households and soften the blow of social hardship. this also applies to severely hard - hit enterprises with fundamentally sound business prospects. however, it should be borne in mind that the government assistance granted now will have to be paid for later – either through spending cuts or higher taxes. the new borrowing shifts the burden into the future, where it joins the fiscal strains caused by climate change and population ageing. in spite of all the pressing issues and crises, we must not lose sight of the longer - term horizon. today, we can and must chart the course for tomorrow. 3 the importance of economic education economic education is another area in which a course needs to be charted. in an inflationary environment, it is more important than in recent decades to have a basic understanding of interest rates and inflation, but also risk. lest we forget : since the euro was introduced in 1999, annual inflation in germany has averaged a mere 1. 5 %. many younger people do not know inflation. they have had little reason to think about real and nominal interest rates up to now. their spending, investment and saving decisions have so far not been threatened by diminishing purchasing power. people on small incomes are particularly affected by the current bout of inflation, as they now have to cut back on their spending amid high energy prices and have no savings to fall back on. this includes a large number of low earners and pensioners, many of whom are women. these groups in society are often also less knowledgeable about economics, as studies repeatedly confirm. 1 as i see it, there are three key challenges for economic education activities : 1. their content needs to take into account the new inflationary environment ; 2. educational measures need to be specifically targeted at vulnerable sections of the population ; 3. the new, uncertain environment needs to be incorporated into scholarly and academic research and development projects. i would like to briefly share with you some experience and ideas relating to all three challenges, but also some discussion points from the bundesbank's perspective. 4 challenges for economic education 3 / 6 bis - central bankers

##ncies, that between the us dollar and the chinese renminbi, should be abandoned. for the past decade, the chinese currency has been pegged by the people ’ s bank of china at a rate of around 8. 28 renminbi per dollar. critics of this policy, mainly leading us politicians and some industrialists, believe that chinese exports have been given an unfair advantage when the renminbi has tracked the dollar ’ s fall against the euro. the most drastic answer to these exchange rate issues would be to propose a new global monetary system of the kind that existed after the second world war and up to the early 1970s in the shape of the bretton woods agreement and the link via the dollar to gold. this kind of solution has actually been recommended by robert mundell, a currency area theorist and winner of the 1999 nobel prize in economic sciences. even keynes considered the establishment of a global currency, the bancor. mundell points to transaction gains for trade and the financial markets, but also other arguments. one of these is that the signalling of international relative prices is distorted by exchange rate fluctuations caused by capital flows. another is that the global economy has led to increasingly weak money illusion, the illusion that prevents wage - earners from immediately perceiving a deterioration in their purchasing power following a depreciation, and from demanding compensation that would render the depreciation ineffectual. despite the intellectual appeal of such arguments, it is not difficult to see that during the past decade, the us, europe and japan have had very different growth rates and their business cycles have been highly unsynchronised. given that monetary policy would be dictated by the monetary system, a tremendous burden would be placed on fiscal policy to stabilise the economy when the differences across the common monetary area are too great. the large real adjustments that would be required in wages and relative prices in the us and europe - instead of an adjustment in the exchange rate - would probably cost more than the gains derived from having fixed global exchange rates. therefore, the requirements necessary to make such a system work, which in reality are the factors that determine what constitutes an optimal currency area, indicate that such a solution is a distant prospect, if it should become reality at all. in addition, there are the practical and administrative problems of organising such a global monetary system, indeed even a global central bank with representation from all countries. a middle ground between a single currency or single monetary standard such as bretton