last 18 quarters consecutively. very similar results have also been extracted from other surveys like that of ‘ consensus economics ’ or the ‘ euro zone barometer ’. overall, the eurosystem has achieved credibility among market participants. this is also very important considering the uncertain environment, which the governing council of the ecb faces, in its day - to - day decision - making. in what follows, i am going to touch on this issue. monetary policy and uncertainty far from the deterministic world of models in which researchers can exactly predict the effects of a change in a certain variable, there is the real world, which the governing council of the ecb faces at its monthly meetings. there are many possible disturbances that feed the monetary framework with uncertainty in numerous respects. in the recent past, we had to deal with terrorist attacks, asset price bubbles and extraordinary rises in the oil price, just to mention a few. all of these events affect and change the structure of the framework a central bank has to deal with and add uncertainty to the process of conducting monetary policy. among the many forms of uncertainty the most relevant for central banks is twofold. the first concerns the transmission mechanism of monetary policy, the second is about the current state of the economy. concerning the mechanism of monetary policy transmission first of all, since the introduction of the euro we have noticed an important move towards a closer integration of capital markets and the banking system. this has impacting repercussions on the way and the amount by which interest rate decisions are passed through to the economies. nevertheless, since the euro area still remains heterogeneous in structure, the pass - through may be quick in one region while it is rather stodgy in another. recent labour market reforms in several member states as well as changes in social security systems influence the transmission mechanism further. all this continuously affects the process at hand and the euro area of today may well be quite different from that of 1999. the second important source of uncertainty concerns the state of the economy. again the division can be made between aggregate uncertainty and uncertainty at the country level. among experts the opinion is not always unanimous concerning the state of the economy. there are many indicators and many ways of interpreting them, so discriminating between a temporary slowdown of the economy and the beginning of a recession or between a sound recovery and irrational exuberance is not always obvious. it is no wonder that at times reference is made to the " art of central banking ".

. the first is growth in real non - farm gdp. i use non - farm gdp simply because farm gdp can be highly volatile due to droughts and floods. that, as rural producers know only too well, has been a constant feature of the australian experience. on average, growth in the economy in the two periods under review was very similar, at about 3. 4 per cent ( graph 3 ). but there was a marked change in the middle of the 1970s. after a number of years of very rapid growth, the economy encountered much more adverse circumstances from 1974 onwards. that was true for most countries, though australia ’ s relative performance on some metrics deteriorated. from 1975 to 1979, the average growth rate was a full percentage point lower than in the period from 1971 to 1974. the period was also noteworthy for the close proximity of two episodes of cyclical weakness, in 1974 / 75 and 1977. there was also a recession in the early 1980s. graph 3 real non - farm gdp growth * then and now ; year - ended % % 4. 0 % 2. 9 % - 2 % - 2 % 3. 4 % - 2 - 2 * average annual growth based on hp - filtered trend. sources : abs ; rba the current decade so far has seen average growth of 3. 4 per cent, though the next couple of years will probably see growth noticeably lower than that. what is quite noticeable from the chart is the relative stability of growth in recent years, something that was a feature of the second half of the 1990s as well. this pattern was observed in many economies over the same period. of course, the 1970s makes for a flattering benchmark in that it was the most unstable period in macroeconomic terms in the entire post - war period, so even average performance will look better than that. but, in fact, the period since the mid 1990s has been very stable by any standard. those who have looked into this in detail have posited several possible contributing factors, including better macroeconomic policy frameworks, a wide range of microeconomic reforms in labour and product markets, and luck. the weak growth of the latter 1970s was associated with an upward trend in unemployment ( graph 4 ). from a low of 2 per cent in the early 1970s, it rose to about 5 per cent in the mid1970s recession, and then drifted higher over the remaining part of the decade. similar trends were observed abroad. the big rise in real wages in the