Klaus Liebscher : Challenges for the Eurosystem ’ s monetary policy

Central bankers are used to acting under uncertainty in fact, this is a major rationale for their existence. The Eurosystem i.e. the ECB and the euro area national central banks has undergone and, I believe, successfully passed a special test on “Monetary policy under uncertainty” in managing the transition to EMU and in conducting monetary policy during the first one and a half years of the euro area’s existence. Indeed, EMU represents a major regime shift, with a number of associated uncertainties, such as data uncertainties, uncertainties about the monetary transmission mechanism across the euro area, uncertainties about the economic structure of the euro economy as it is adapting to the new, more competitive environment, and, last but not least, uncertainties about the interaction between the various economic policymakers.