explicitly recognised by the european council meeting in nice after those of luxembourg and cardiff. it is not the banque de france ’ s role to take the place of the relevant authorities by issuing a list of recommendations for reforms in the fields of education and training, the functioning of the labour market or social welfare. however, as far as methods are concerned, the monetary policy council believes that a benchmarking principle for structural issues could be adopted in the euro area, namely convergence towards best practices, as we did in monetary and fiscal matters with the maastricht criteria. why not reverse the burden of proof in the field of structural reform by asking euro area countries why they do not introduce, in their own countries, reforms that have been successfully implemented in another euro area country? the choice of such reforms should depend on three criteria : first that they have been decided on the basis of a political consensus, second, that they have been implemented on the basis of a social consensus and third, that they have been successful in combating unemployment. a large number of reforms pursued within the euro area meet these criteria. thirdly, maintaining economic competitiveness : making france an attractive business location in an equally attractive euro area in the new environment created by monetary union and the single currency, cost and price competitiveness is, more than ever a key indicator of the conduct of national economic policies. european policies must place the emphasis upon this aspect of competitiveness. before the euro, national economic policies were based on the close monitoring of several indicators such as the trade balance, the balance of payments, the exchange and interest rates. policymakers thus constantly received information on the markets ’ main reactions to shifts in economic policy and were strongly encouraged to take them into account where relevant. with the introduction of the euro, some of these indicators have either disappeared at the domestic level or their impact has been severely limited. of course, the indicators continue to exist for the euro area as a whole, hence the importance of the treaty's provisions on the co - ordination of fiscal and economic policies. nevertheless, the rules of the market economy continue to apply to each member state of monetary union as well as to the union as a whole. at the national level therefore, economic policymakers need to be even more vigilant than before regarding the indicators of competitiveness. these data, which focus on trends in unit labour costs, the quality of the regulatory and tax framework and, more generally, an economic, legal and tax environment condu

, in the presence of aggregate supply shocks, attempts by monetary policymakers to reduce the volatility of inflation over time could be associated with higher volatility in unemployment, and vice versa. john's visual depiction of this policy tradeoff has come to be known as the taylor curve. interestingly, john's work anticipated the possibility that improvements in the conduct of monetary policy or changes in the structure of the economy could result in a shift of the taylor curve - - that is, a change in the ability of policy to smooth both inflation and employment. and indeed, what economists have dubbed the great moderation - - a simultaneous reduction in the volatility of inflation and the volatility of real economic activity - has occurred in the united states and in many other economies over the past quartercentury. over the course of the 1980s, john continued his work on rational expectations issues and monetary policy and macroeconomics more generally. he also began to broaden his focus to matters of international economics. he developed a multi - country rational expectations econometric model - - a truly ambitious undertaking, especially in light of the limited computing capabilities of the era. by this point in his career, john had firmly established his reputation as a leader in the profession. in 1989, john became a member of the first president bush's council of economic advisers. during the next four years, he played a key role in shaping the administration's positions on macroeconomic, fiscal, international finance, and trade issues. the u. s. economy was entering a difficult period at that point. among other problems, significant pressures on bank balance sheets were beginning to emerge that would damp economic growth for the next several years. while dealing with the serious economic issues of the time, john and the other members of the council simultaneously produced an impressive manifesto for policymaking. they developed a rules - based approach to the conduct of monetary and fiscal policy and published it in 1990 in the economic report of the president. that essay laid the foundation for what is perhaps john's most well - known contribution to economics - - the simple description of the determinants of monetary policy that eventually became known as the taylor rule. 1 john's analysis triggered an avalanche of studies examining the stabilization properties of taylor rules in the context of macroeconomic models. other work investigated the ability of variants of the taylor rule to describe empirically the actual course of monetary policy in the united states and in other economies. the taylor rule also