But even for central banks, such as the Eurosystem, which have a more hierarchical ordering of objectives, and pursue price stability as the primary objective, output developments play an important role: Focusing exclusively on price stability, regardless of the type of shock hitting the economy, would otherwise have the undesirable consequence of increasing output volatility to inefficiently high levels.
In the end, this may complicate the preservation of price stability. As part of their communication strategy, many central banks have decided to publish their forecasts in order to increase transparency. In a forwardlooking environment, fostering transparency by means of published forecasts is more than an end in itself.