distortions arising from high and volatile inflation, the development of growth and employment are ultimately determined by the structural features of an economy. well - designed structural policies promoting flexibility in product and labour markets, enhancing education and training and fostering research and development are, therefore, crucial for the long - run performance and smooth functioning of an economy. this holds particularly true in a monetary union like the euro area, where national monetary and exchange rate policies are no longer available as adjustment mechanisms. recognising the need for sound structural policies, the member states have established a comprehensive reform agenda in the context of the lisbon strategy aiming at enhancing the growth and employment potential of the euro area countries. yet, while there have been some remarkable improvements, reflected, in particular, in the creation of 15 million new jobs in the euro area since the start of economic and monetary union ( emu ) compared to only around three million new jobs in the nine preceding years, in many countries, structural reform efforts have not sufficiently enhanced the flexibility and efficiency of product and labour markets. this is evidenced by the still unacceptably high unemployment rate in some regions or segments of the labour market, and the very low level of labour productivity growth in the euro area. 1 implementing and carrying out structural reforms is undoubtedly a challenging and arduous task. however, it is particularly important to resolutely pursue such reforms in the current environment, where the euro area economy is facing a number of important challenges, including rapid technological change, accelerating globalisation forces and ageing populations. the experience of those european countries, which have undertaken courageous and successful reforms in the past, shows that they pay off. 2 the netherlands is one such country, and is now characterised by a flexible labour market with the lowest unemployment rate in the euro area at 3. 2 % in 2007. in addition, with a total participation rate of 78. 5 % in 2007, the highest in the eu, and a female participation of 72. 2 %, two of the lisbon objectives have already been met. the annual growth rate of real gdp per hour worked in the euro area averaged only 1. 3 % over the period 1999 - 2006. see a. annett ( 2006 ) “ lessons from successful labour market reformers in europe ”, imf euro area policies : selected issues, august 2006. i would like to turn now to some of the reform policies pursued in the netherlands that led to the remarkable performance of the dutch labour market over the last quarter

use of monetary policy tools to foster financial stability objectives. implicit in this discussion is some degree of confidence that the central bank could identify a buildup of financial stability risks. adrian, covitz, and liang ( 2014 ) offer some views on effective financial stability monitoring. this variability is in part due to different model set - ups, such as how financial instability builds up and how it affects economic outcomes. for example, woodford ( 2012 ) finds that leaning against the wind does not change the basis for traditional stabilization objectives in a standard new keynesian model, whereas the cost - benefit analysis in svensson ( 2015 ) finds little basis for the “ leaning against the wind ” strategy. ajello and others find that optimal adjustment of the policy rate, when the possibility of a crisis is taken into account, is small unless the policymaker is assumed to be quite uncertain about the likelihood and severity of the crisis. bis central bankers ’ speeches references adrian, tobias, daniel covitz, and nellie liang ( 2014 ). “ financial stability monitoring, ” feds notes. washington : board of governors of the federal reserve system, august 4. agarwal, ruchir, and miles kimball ( 2015 ). “ breaking through the zero lower bound ( pdf ), ” imf working paper wp / 15 / 224. washington : international monetary fund, october. ajello, andrea, thomas laubach, david lopez - salido, and taisuke nakata ( 2015 ). “ financial stability and optimal interest - rate policy ( pdf ), ” working paper. washington : board of governors of the federal reserve system, february. alderman, liz ( 2015 ). “ in sweden, a cash - free future nears, ” new york times, december 26, www. nytimes. com / 2015 / 12 / 27 / business / international / in - sweden - a - cash - freefuture - nears. html. bernanke, ben s. ( 2005 ). “ the global saving glut and the u. s. current account deficit, ” speech delivered at the homer jones lecture, st. louis, april 14. blanchard, olivier, and john simon ( 2001 ). “ the long and large decline in u. s. output volatility ( pdf ), ” brookings papers on economic activity, 1, pp. 135 – 74. board of governors of the federal reserve system ( 2015 ). “ federal reserve board seeks public comment on