Second, we would benefit considerably from an equally ambitious macroeconomic imbalances framework that detects imbalances early on, through a well focused and rigorously applied scoreboard; and then corrects them, again in a timely fashion. Here, we need to focus on those countries that ultimately pose a risk to other euro area countries through in particular persistent and excessive competitiveness losses. III.
In doing so, I would first like to shed some light on the rationale behind macroeconomic projections and the method used before talking about the importance and use of projections in monetary policy. 3  The rationale behind macroeconomic projections and the method used  Forecasting and utilising projections of the likely development of key economic variables is key to effective central banking.