While it is tricky to build and maintain a multi-level wage determination process that takes into account firm-, sector- and country-specific factors, it does offer the potential to improve the macroeconomic adjustment process.23  Conclusions There has been substantial convergence in the diagnosis of the boom-bust-crisisrecovery cycle that has defined the euro area economy over the last twenty years.
17  More precisely, the loss function that the central bank is assumed to minimize is the discounted sum of current and future squared deviations of inflation from 2 percent, current and future squared deviations of the unemployment rate from 6 percent, and current and future quarterly changes in the federal funds rate.