The transition to Economic and Monetary Union How expectations react to a major change in policy regime is still an issue of contention. 20 years ago, the fathers of the rational expectations revolution espoused an optimistic position: if an institutional change – even an abrupt one – is sufficiently credible, expectations will focus instantly on the new equilibrium.
Therefore, I find addressing this issue to be just as important a task as formulating policy. Two months have passed since my appointment, and I am now convinced that you yourselves are well aware of the causes and the direction to take to resolve them.