order to accompany these changes and help us to meet the challenges we face. before concluding, i would like to emphasize the invaluable opportunities that the new information technologies can offer us in terms of data sharing, collection and storage. but they also involve major challenges, particularly in terms of cyber security and personal data protection. i wish you a successful and fruitful meeting, and hope that you can combine business with pleasure and allow yourself some time to discover the millennial richness of rabat, this imperial city which was listed by unesco as a world heritage site on june 29, 2012. thank you for your attention.

is illustrated in chart 2. the chart shows that using strong instruments to achieve an inflation target or exchange rate target in the short term results in more pronounced fluctuations in the real economy. by allowing greater flexibility with regard to the short - term achievement of goals, it is possible to achieve more stable developments in the real economy. but confidence in the nominal anchor must not be undermined. this may lead to a less favourable trade - off, as illustrated in the chart by the broken line. if there is insufficient confidence in monetary policy, economic agents may expect higher price and cost inflation to persist. this will be taken into account when setting wages and prices. the result will be a wage and price spiral. experience shows that this in turn leads to slower growth and lower employment. a lack of confidence therefore entails a risk of higher unemployment. in consequence, monetary policy must also focus on movements in nominal variables when the economy is subjected to supply - side shocks in order to prevent the economy from entering a vicious circle. the building of confidence in nominal developments must be given sufficient priority. if there is confidence in monetary policy, economic agents will expect the rise in price and cost inflation to be of short duration. higher prices will then not feed through to prices for other goods and to wages to the same extent, and there will be less risk of a recession. confidence in monetary policy therefore results in a better trade - off between nominal fluctuations and fluctuations in production and employment. i have been talking about supply - side shocks to the economy. however, there are many types of shock where there is no conflict between stable nominal developments and stable developments in the real economy. for example, a sharp decline in overall demand may give rise to a deflationary recession. in such a situation, an expansionary monetary policy may contribute to both nominal and real economic stability. whether disturbances arise on the supply side or the demand side, it should be possible to use the interest rate to influence economic developments. the interest rate is an instrument, rather than a target variable. a passive monetary policy will lead to both price and exchange rate instability and to greater fluctuations in production and employment. however, an active monetary policy does not imply attempting to fine - tune economic developments. we must be mindful of the uncertainty associated with economic developments and the effects of monetary policy. normally, interest rate changes should be made gradually to allow us to acquire more information, for example about the effects of previous interest rate changes. uncertainty and credibility according to nor