in the current context of sharp inflationary pressures, monetary policy must avoid undesired second - round effects, which are those that generate an adjustment longer than the one envisioned in the policy horizon. in order to monitor these potentially undesired second - round effects, we scrutinize price dynamics that appear to be out of the normal. for example, we follow the evolution of wages compared to an estimated evolution of wages based on the historical patterns of indexation. if wages are growing faster than these estimates, we could be facing worrisome wage dynamics that may require a policy reaction. in this scenario, it could be argued that one could relax the policy horizon or the target level to accommodate these inflationary shocks with small output costs. however, based on my previous discussion, this could be very detrimental for the future. giving up on inflation will lead to losing the inflation anchor on expectations, more backward - than forward - looking behavior of wage and price setters, and an increase in output volatility. in other words, we would be achieving an inefficient outcome for monetary policy and losing the benefits of the great moderation. hence, central banks must carefully monitor inflation expectations. however, in the current juncture of extreme uncertainty and inflation volatility, the breakeven measures that compare nominal and inflation protected securities appear to be excessively high world - wide, thus apparently showing an important increase in inflation expectations, which could even reflect the loss of the nominal anchor. this has also been the case in chile, especially since the deepness of the market of inflation protected instruments tends to make them the natural safe haven. therefore, in uncertain times like the ones we are enduring today, breakeven measures may increase without necessarily implying un - anchoring expectations, making their timely recognition more intricate. some could incorrectly argue that a way to avoid the monetary policy reaction to some specific inflationary shocks is to focus inflation control on core rather than headline measures of inflation. this is a much debated issue, but in the context of the current discussion i would like to add that above the problem of doing the change in target in an opportunistic way and the impact it may have on credibility, there is a more profound reason why focusing on core versus headline inflation is not an issue in the current environment, where commodity prices have already increased substantially. in the present scenario, second - round effects appear in all prices. for example, a rapid increase in wages, due to

mario draghi : generation €uro students'award 2018 event introductory remarks by mr mario draghi, president of the european central bank, frankfurt, 11 april 2018 introduction ladies and gentlemen, and especially dear students, first of all, let me express congratulations to all the students here for reaching this stage of the generation €uro students ’ award competition. it ’ s an incredible achievement and you should all be proud of yourselves. bravo! this gathering is an important opportunity for us to continue our dialogue with you. you are the winners of our euro area - wide competition on monetary policy, which is now in its seventh year. the ecb also organises other initiatives to engage with young people. we have the ecb youth dialogues and competitions such as the euro video challenge and the young economists ’ session at the sintra conference. sintra is a conference that we do annually on a variety of themes around monetary policy and macroeconomics. so far, my impression is that it has been a success, but of course i am biased. i am also aware that my colleagues from the national banks organise events and dialogues with students and schools at national level. all this basically tells you one thing : you are very important because you are our future. you are europe ’ s future and that ’ s why the ecb and the national central banks really give you a lot of attention and get a lot from you. i trust that in taking part in the competition you have been able to find out more about what we do at the ecb, why we do it, and how our monetary policy works. it seems obvious that you should know what we do at the ecb or what people do in their national central banks. but as a matter of fact, if you do polls, you would be surprised by the amount of confusion that people have. for example, lots of people, about one - third, think that central banks are like other banks, that they are by and large not very different from what other banks do. now, you will be the selected category that will know that the ecb is a central bank and that central banks are different from banks. and even more importantly, through this exercise, you actually got to have, at a very young age, a european perspective. you understood what is still really missing from lots of people, who still think in terms of national borders. it is very important, of course, but it is not the only reality that we are living through. in