##less ” recoveries is a slow rebound in aggregate economic activity. over the first eight quarters of all three recoveries, real gdp grew at an average annual rate of 3 percent or less, compared, for example, with more than 5 percent in the two years following the 1975 and 1982 recessions. even taking into account differences in trends across time, the slower pace of overall economic growth following recent recessions is striking. various arguments have been advanced in an effort to rebut the presumption that an aggregate demand shortfall accounts for much or most of the increased unemployment. the see christopher l. smith ( 2011 ), “ polarization, immigration, education : what ’ s behind the dramatic decline in youth employment? ” finance and economics discussion series 2011 - 41 ( washington : board of governors of the federal reserve system, october ). see, for example, christopher ruhm ( 1997 ), “ is high school employment consumption or investment? ” journal of labor economics, vol. 15 ( october ), pp. 735 – 76 ; and thomas a. mroz and timothy h. savage ( 2006 ), “ the long - term effects of youth unemployment, ” journal of human resources, vol. 41 ( spring ), pp. 259 – 93. for a dissenting view regarding the effect of high - school employment, see joseph v. hotz, lixin colin xu, marta tienda, and avner ahituv ( 2002 ), “ are there returns to the wages of young men from working while in school? ” review of economics and statistics, vol. 84 ( may ), pp. 221 – 36. bis central bankers ’ speeches most common argument is that the deep recession created serious difficulties in matching available workers to available jobs, resulting in a big increase in structural unemployment. the mismatches in question could develop for a number of reasons. first, some have suggested that the traditional willingness of american workers to move from weaker labor markets to stronger ones has been impeded by the sharp decline in residential property prices and especially by the large number of mortgages that are now greater than the values of the properties securing them. but research to date suggests that such “ house lock ” has probably not had more than a small effect on structural unemployment thus far. 7 as noted earlier, migration rates have been falling for some time. but the declines during the recession have not been larger for homeowners than for renters. nor has migration declined more in areas where

money and credit growth and sound economic fundamentals in the euro area. the impact of the ongoing reappraisal of risk in financial markets on the real economy is still surrounded by unusually high uncertainty. incoming data have confirmed that the risks surrounding the outlook for economic activity lie on the downside. accordingly, we will monitor very closely all developments. the governing council remains committed to preventing second - round effects and the materialisation of upside risks to price stability over the medium term. it is paramount that medium and longterm inflation expectations remain firmly anchored in line with price stability. reflecting its mandate, such anchoring is of the highest priority to the governing council. with respect to fiscal policies, a discretionary fiscal loosening in eu countries should be avoided. there is ample evidence that activist fiscal policies were not effective in stabilising european economies but rather led to sustained increases in the ratios of government expenditure and debt to gdp. allowing the free operation of automatic stabilisers in countries with strong fiscal positions and safeguarding the long - term sustainability of public finances are the best contributions that fiscal policy can make to macroeconomic stability. countries with fiscal imbalances are urged to make further progress with consolidation, in line with the requirements of the stability and growth pact. there is a clear risk that some countries will fail to comply with the provisions of the preventive arm of the pact, thereby undermining its credibility. structural reforms help economies to adjust to adverse shocks, foster productivity growth and increase employment and competition, thereby also helping to reduce inflationary pressures. in particular, enhancing competition in the services sectors and network industries, as well as applying adequate measures in the eu agricultural market, would be conducive to price stability in the euro area. we are now at your disposal for questions.