markets from a policy and research perspective taught me that evaluating the strength of a disinflationary process hinges on a good understanding of the interaction between wage formation and price setting 2 / 5 bis - central bankers'speeches dynamics. this can, in turn, inform the decisions of the central banks and support the dialogue amongst social partners, which played a positive role in some of the past disinflation episodes, as i mentioned earlier. * * * the adverse supply shocks that have hit the euro area predominantly originated abroad, and the global landscape in which the ecb operates is evolving rapidly. while fostering international cooperation is essential to addressing global challenges, it is not sufficient on its own. europe should act as one to address the challenges of our times. i was myself directly involved in the negotiations on next generation eu. the readiness to act together played a key role in restoring confidence and supporting the recovery from the pandemic alongside the ecb's monetary policy response. and it showed what we can achieve when fiscal and monetary policies work together. next generation eu has been a powerful tool for supporting the green and digital transitions, two transformative forces that are increasingly shaping the economic environment in which the ecb operates. without a successful energy transition, we will be exposed to the risk of more frequent inflation shocks. likewise, the digitalisation of payments and finance raises fundamental questions about the future of money. it creates opportunities for innovation, but also risks that we need to be alert to. without prejudice to its primary mandate, the ecb can do – and is doing – its part in ensuring that europe can navigate these challenges. the ecb has rightly taken steps to integrate climate change considerations into its monetary policy framework, its financial stability monitoring, and banking supervision. the ecb has also been at the forefront of the advanced economies when it comes to central bank digital currency. i have personally contributed to this endeavour as a member of the ecb's high - level task force on a digital euro. based on a legislative framework that is for you as co - legislator to define, a digital euro, if issued, would ensure our currency is fit for the digital age. alongside banknotes and coins, it would offer our fellow citizens a digital form of cash, i. e. a digital means of payment that is universally accepted throughout the euro area, that offers the highest protection of their privacy and that they can use free of charge, both online and offline. we also need to

share with other countries, and is not the result of poor performance by our central bureau of statistics, but of the attempt to provide data that is as good as possible in real time. we can also see that the level of uncertainty is particularly high regarding estimates of the various components of gdp, such as exports, investments, and so forth, while it is lower for gdp itself. for instance, we can see that the updates in the quarterly gdp growth data in 2013 in israel are not unusual relative to the us or the uk, and the update that was made just a few days ago in the first quarter gdp data in the us was very significant. in view of this, we also need more “ rapid ” data, and we use a mix of data and indicators that help us in trying to understand developments in real time, or with a relatively small lag. i note that the fact that the labor force survey has become monthly is very helpful. in this context, it is worth mentioning the composite state of the economy index, the business tendency survey, the google search index, and internal models developed by the bank for nowcasting, which are intended to provide a clearer picture of the current situation when statistical data have not yet been published. monetary policy is intended to affect future developments : policy has channels of relatively rapid effect ( the exchange rate ), and some of the others have a slower effect ( for instance, the price of credit ). in any case, an important component in the formulation of policy is the forecast, since monetary policy is, of course, forward looking. it is therefore very important that the monetary policy decisions that are made each month rely on a forecast that is as upto - date as possible. such a forecast relies on the most up - to - date information regarding the state of the israeli economy – based on a broad set of indicators from the labor market, various indices of economic activity, consumer confidence indices and business tendency surveys – and on the most up - to - date forecast regarding the state of the global economy, and particularly global trade, which is an indicator of demand for israeli exports. we can see that in the forecasts and estimates regarding global trade and gdp, there are also regular updates, some of which are of considerable size. therefore, the forecast is updated on the basis of updated national accounts data and other recent data, and on the basis of the updated global picture. since the beginning of the monetary committee ’ s operation, the bank of israel