By providing a stable framework for making and explaining monetary policy decisions, the strategy bolsters the credibility and effectiveness of the single monetary policy. Given the practical constraints I have just outlined, at this early stage it would clearly be unwise for the ECB to rely mechanically on the signals offered by a single indicator or forecast in order to take monetary policy decisions.
Indeed, such a simplistic approach to monetary policy making is unwise in BIS Review 112/1999  2  all circumstances. Our knowledge of the structure of the euro area economy and the indicator properties of specific variables – although rapidly improving – is simply too sparse. In this respect, it has to be acknowledged that the introduction of the euro constitutes a structural break.