an island on the edge of the common currency area. furthermore, ireland ’ s neighbour and most important trading partner, the uk, has not yet joined the euro. apart from structural and nominal convergence, there is real convergence - a term i use here in the sense of synchronicity of business cycles. real convergence is of importance in a currency union, because all the countries in the union are subject to the single monetary policy. the governing council of the european central bank designs monetary policy to fit the euro area as a whole. a country whose business cycle gets completely out of step might therefore suffer from an individually inadequate monetary policy. however, marching in absolute lock - step is not necessary, as can be seen in the us, where certain regions grow faster than others. during recent years, ireland has been growing considerably faster than, for example, germany. the faster growth is due mainly to catching - up, and to the still incomplete synchronicity of the anglo - saxon and the continental business cycles. irish economic growth derived additional impetus from the start of the european monetary union. interest rates in ireland were effectively cut by three percentage points on january 1, 1999. that sort of extra stimulus sent real interest rates to a historic low and boosted demand. fiscal policy, the instrument to cushion such monetary shocks, was tightened. however, with the fiscal surplus being already large, this tightening did not prevent inflation from starting to rise in late 1999. considering the facts that led to this situation, does it really indicate a lack of the necessary convergence? i don't think so. a major part of the excess inflation is accounted for by the catching - up, and by the one - off effect of the start of the common monetary policy. as economic and financial integration is going on, the business cycles will grow ever - closer, that is, real convergence will increase further. iii ladies and gentlemen, world output grew by 4. 7 per cent last year, the highest rate in a decade. that growth rate could not be kept up. has the world economy now bottomed out? my answer : “ we do not know for sure ” should come as no surprise to you. the us economy is still playing the key role in the global economy. it accounts for 22 per cent of world gdp and for 15 percent of world exports. the heavy dependence of nafta and some asian countries on trade with the us proliferates us weakness. signals from the us economy continue to be mixed.

available at what time - a herculean task, considering the lack of documentation for much of the data. in the us, research on real - time issues owes much to the efforts of dean croushore and tom stark from the federal reserve bank of philadelphia who developed a comprehensive real - time data set for the us economy. at the same time, athanasios orphanides reconstructed the real - time data and forecasts available to the fomc from the greenbooks which are prepared by the federal reserve staff for each meeting. the pioneering work of our american collegues has shown that measurement problems do indeed matter for the conduct of monetary policy. for example, we have learned from their studies that the problem of measurement error is likely to be particularly severe for the output gap - a concept which figures very prominently in much of the recent literature on monetary policy issues. thus, it is not surprising that researchers outside the us, in particular in europe, have taken up the issue of real - time data. this conference here in eltville offers a good chance to present recent research on this issue. today and tomorrow, we will listen to presentations of papers based on real - time national data for the us, the uk, germany, japan, canada, norway and switzerland as well as realtime oecd forecasts for the g7 countries and the euro area countries. we at the bundesbank started to compile a set of real - time data on the german economy two and a half years ago. and we have used these data for selected research topics. let me give you three examples. first, jorg dopke has used the data set to calculate real - time output gaps ( discussion paper 11 / 2004 ). in accordance with the studies by orphanides and van norden ( 1999, 2002 ), he finds that the real - time gaps differ considerably from their counterparts based on the latest vintage of data. one period when the difference between today ’ s estimates and the real - time perception of the output gap was particularly pronounced is the economic boom following german reunification. at that time, the measurement error for the output gap reached a size of up to four percentage points ( depending on the estimation method used ). in this particular case, the error was due to a temporary underestimation of actual output as well as to a more persistent overestimation of potential output. doepke ’ s results thus provide additional evidence that measurement problems can seriously distor