Tommaso Padoa-Schioppa, who contributed so much to the achievement of monetary union, was well aware of this. In May 1998, on the eve of the introduction of the single currency, Padoa-Schioppa wrote in the Corriere della Sera, The European economic and monetary union’s “capability for macroeconomic policy is, with the exception of the monetary field, embryonic and unbalanced […].
Even though the monetary policy authority follows a systematic rule as suggested by John Taylor, real time assessment of the state of the economy may lead to substantial errors, and thus contribute to a dismal outcome for the economy. Even with accurate data, it is not certain how macroeconomic policies affect economic outcomes.