K. ALEC CHRYSTAL is Professor of Monetary Economics at the City University Business School. Previously he was Professor of Economics at Sheffield University. He is author of several books, including Principles of Economics and Economics for Business and Management (both with R. G. Lipsey).RUPERT PENNANT-REA was editor of The Economist from 1986 to 1993 and Deputy Governor of the Bank of England from 1993 to 1995. He is now in business.