ECONOMIC DEVELOPMENTS AND MONETARY POLICY       Content Page   . The World Economy: Global Upswing . US: Vibrant Pace . Europe: Mixed . Asia: Broad-based Growth ExpectedCorporate Disclosure . Box 15 – Debunking the Deflation Myth in Singapore . International Financial Markets: Broad Recovery Amid Uncertainty . Singapore: Riding the Global Recovery . Box 16 – Exchange Rate and Macroeconomic Volatility . Monetary Policy in an Increasingly Volatile Environment . Strengthening the Monetary Policy Formulation Process . Recent Policy Research and Analysis Against the Backdrop of More Frequent Shocks . Box 17 – Creating an Electronics Leading Index   The World Economy: Global Upswing   In the first half of the year, the combination of the Iraqi conflict and the outbreak of Severe Acute Respiratory Syndrome or SARS impacted the global economy, especially the Asian countries. However, affirmative measures to bring the economies back to gear generally resulted in encouraging economic data towards the second half. The economic turnaround was led by the United States and Japan, the two largest economies in the world. China also expanded rapidly, helping to pull up the rest of Asia.