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The Euro Area: Staying the Course through Uncertainties

Author(s): Fran├žois Villeroy de Galhau

Date published: Apr 2019

Introductory remarks by François Villeroy de Galhau, Governor of the Banque de France at the 34th SUERF Colloquium & Banque de France Symposium on the occasion of the 20th anniversary of the euro "The Euro Area: Staying the Course through Uncertainties" in Paris, on 28 March 2019.


We often talk about uncertainty as if it is a single phenomenon. There are, however, multiple sources and forms of uncertainty that have different implications for how policy makers can and should respond.

First, “Current state” uncertainty

One form of uncertainty that we grapple with all the time is not being completely sure where we are economically. So-called soft data, such as surveys and sentiment indicators, and market signals do not always align with hard official statistics which are generally known with some delay. Statistical techniques exist to try to combine these sources together into a “nowcast” but the error bands around these central estimates are still quite wide. They also cannot deal with one of the most difficult problems: what to make of so-called “idiosyncratic factors”? For instance, to what extent is the recent stutter in the German economy due to the car industry and to the new emissions standards or to the low level of the Rhine and possibly climate change? These are very hard judgements to make.

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SUERF Policy Note, Issue No 64SUERF Policy Note, Issue No 64

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