On the other hand, the decisions that central banks are taking today to deal with high inflation can shape the future course of our economies in a way that mitigates and limits the ultimate impact of these shocks on prosperity and stability. A new era of volatility The pandemic and the war in Ukraine have led to an unprecedented increase in macroeconomic volatility.
Output growth volatility in the euro area over the past two years was about five times as high as it was at the peak of the Great Recession in 2009. [5] Inflation volatility has surged beyond the levels seen during the 1970s.