The best contribution which monetary policy can make to sustainable growth and employment in the euro area is to maintain price stability in a credible and lasting manner, allowing the considerable benefits of price stability to be reaped over the medium term. It is also generally acknowledged that monetary policy does indeed affect real activity in the short run.
Although the focus must always be on price stability, in many cases the policy action required to 1  BIS Review 123/1999  maintain price stability will also help sustain short-run economic and employment prospects.