of growth per capita and job creation that compares positively with other large advanced economies. it is also remarkable that there is convincing evidence that the euro area and the united states have similar features in terms of diversity of the economies that are part of these vast continents : member countries on this side of the atlantic and the states on the other side. this is documented, in particular, as regards asymmetric inflation, asymmetric growth developments and even in terms of somewhat persistent asymmetric gains and losses of competitiveness. as i have said, none of this should make us complacent. the sovereign debt crises in three smaller euro area countries underline the urgency of a far - reaching overhaul of the fiscal and macroeconomic surveillance institutions in europe. here the governments of the member states are called on to create the institutions that are commensurate with full economic and monetary union. bis central bankers ’ speeches

upside risks to the outlook for price stability over the medium term. again, the sharp increase in oil and other commodities has had a major impact on overall inflation. in these circumstances, the central bank must prevent increases in the prices of raw materials from being incorporated into the long - term inflation expectations, which could trigger second - round effects on wages and prices. it is against this background that the governing council decided in april to raise interest rates. i stressed, in reporting this decision, that it had been taken unanimously. the action of the governing council is motivated by a common goal. that decision in april confirmed that the separation principle is strictly applied and that our non - conventional measures do not restrict in any way our ability to toughen the monetary policy stance when facing inflationary pressures. thus, when the governing council decided in april that it was time to raise interest rates, in parallel, at the same time, it decided to keep, in the second quarter, the provision of unlimited fixed - rate liquidity for a period of three months. contributing to economic performance price stability is the best contribution that central banks can make to sustainable economic growth and job creation. i think there is widespread agreement on this among central bankers and academic researchers. in the short run, however, some academic research suggests that there might be a significant trade - off between low inflation volatility and low output volatility. if prices are stable, economic adjustment has to occur through the real economy channel. it may therefore be difficult to achieve these two goals at the same time. the chart shows that the euro area scores relatively well on both dimensions. this is puzzling, given that the euro area has quite rigid product and labour markets, at least compared with the united states. the higher degree of price and wage rigidity in the euro area would suggest that output volatility should be significantly larger in the euro area than in the more flexible us economy. this would be particularly true during a period when the economy is subject to supply - side shocks, which are simultaneously exerting inflationary and recessionary influences. yet surprisingly, and despite the negative supply - side shocks that had been hitting the euro area economy over the years up to 2007, the data suggested that both inflation volatility and output volatility in the euro area were lower than elsewhere. output volatility in the euro area is much higher when the crisis is included in the sample. but, remarkably, the euro area still scores well on both dimensions