*** Some economists have argued that our monetary policy is too judgemental, seemingly discretionary, and difficult to explain. To reduce discretion, they would prefer it if the ECB had a simple strategy in which interest rates are changed quasi automatically in response to a single or a few easily observable variables.
Others would even prefer the strategy to be replaced by the adoption of a policy rule, determining the monetary policy stance as an explicit function of some variables, or by an even simpler rule relating to an intermediate target. Such alternative approaches are, in my view, not well suited to the formulation of monetary policy in the euro area.