Jean-Claude Trichet: Economic integration and adjustment processes in the euro area Speech by Jean-Claude Trichet, President of the European Central Bank, at the Wirtschaftstag 2007 as recipient of the “Ludwig Erhard Memorial Coin in Gold”, Berlin, 13 June 2007.
Because long-run inflation expectations are a key driver of trend inflation, the monetary authorities need to monitor long-run inflation expectations closely. If they find that they are losing credibility with the markets, so that inflation expectations begin to drift and rise above (or fall below) a desired level, they must take actions to restore their credibility.