ON IN THE RECOVERY FROM THE
GLOBAL FINANCIAL CRISIS WHEN
NOTIONS OF WHAT THE NEW NORMAL
MIGHT BRING WE'RE QUITE
UNCERTAIN. SINCE THEN OUR
UNDERSTANDING OF THE ECONOMY
HAS EVOLVED IN WAYS THAT ARE
CENTRAL TO MONETARY POLICY. OF
COURSE THE CONDUCT OF MONETARY
POLICY HAS ALSO INVOLVED. A KEY
PURPOSE OF OUR REVIEW HAS BEEN
TO TAKE STOCK OF THE LESSONS
LEARNED OVER THIS PERIOD. AND
IDENTIFY ANY FURTHER CHANGES IN
OUR MONETARY POLICY THAT
COULDN'T OUR ABILITY TO
ACHIEVE. OUR MAXIMUM EMPLOYMENT
PRICE STABILITY GOALS IN THE
YEARS AHEAD. OUR EVOLVING
UNDERSTANDING OF FOUR KEY
ECONOMIC DEVELOPMENTS MOTIVATED
A REVIEW. FIRST ASSESSMENT OF
THE POTENTIAL OR LONGER RUN
GROWTH RATE OF THE ECONOMY HAVE
DECLINED FOR EXAMPLE. SINCE
JANUARY TWO THOUSAND TWELVE THE
MEDIAN ESTIMATE OF POTENTIAL
GROWTH FROM FOMC PARTICIPANTS
HAS FALLEN FROM TWO POINT FIVE
PERCENT. TO ONE POINT 8% SOME
SLOWING GROWTH RELATIVE TO
EARLIER DECADES WAS TO BE
EXPECTED REFLECTING SLOWING
POPULATION GROWTH IN THE AGING
OF THE POPULATION. MORE
TROUBLING HAS BEEN THE DECLINE
IN PRODUCTIVITY GROWTH WHICH IS
THE PRIMARY DRIVER OF IMPROVING
LIVING STANDARDS OVER TIME.
SECOND THE GENERAL LEVEL OF
INTEREST RATES HAS FALLEN BOTH
HERE IN THE UNITED STATES AND
AROUND THE WORLD. ESTIMATES OF
THE NEUTRAL FEDERAL FUNDS RATE
WHICH IS THE RATE CONSIST. THE
ECONOMY OPERATING AT FULL
STRENGTH AND WITH STABLE
INFLATION FALLEN SUBSTANTIALLY.
IN LARGE PART REFLECTING A FALL
IN THE EQUILIBRIUM REAL
INTEREST RATES WERE OUR STAR.
THIS RATE IS NOT AFFECTED BY
MONETARY POLICY BUT IS INSTEAD
DRIVEN BY FUNDAMENTAL FACTORS
IN THE ECONOMY. INCLUDING
DEMOGRAPHICS AND PRODUCTIVITY
GROWTH THE SAME FACTORS THAT
DRIVE POTENTIAL ECONOMIC GROWTH.
THE MEDIAN ESTIMATE FROM FOMC
PARTICIPANTS OF THE NEUTRAL FED
FUNDS RATE HAS FALLEN BY NEARLY
HALF SINCE EARLY TWO THOUSAND
TWELVE FROM FOUR POINT 25% TO
TWO POINT 5% THIS DECLINING
ASSESSMENT OF THE NEUTRAL
FEDERAL FUNDS RATE HAS PROFOUND
IMPLICATIONS FOR MONETARY
POLICY. WITH INTEREST RATES
GENERALLY RUNNING CLOSER TO
THEIR EFFECTIVE LOWER BOUND
EVEN IN GOOD TIMES. THE FED HAS
LESS SCOPE TO SUPPORT ECONOMY
DURING AN ECONOMIC DOWNTURN BY
SIMPLY CUTTING THE FEDERAL
FUNDS RATE. THE RESULT CAN BE
WORSE ECONOMIC OUTCOMES IN
TERMS OF BOTH EMPLOYMENT AND
PRICE STABILITY. WITH THE COSTS
OF SUCH OUTCOMES LIKELY FALLING
HARDEST ON THOSE LEAST ABLE TO
BEAR. THIRD IN ON A HAPPIER
NOTE THE RECORD LONG EXPANSION
THAT ENDED EARLIER THIS YEAR
LED TO THE BEST LABOR MARKET WE
HAD SEEN IN SOME TIME. THE
UNEMPLOYMENT RATE HOVERED NEAR
FIFTY YEAR LOWS FOR ROUGHLY TWO
YEARS WELL BELOW MOST ESTIMATES
OF ITS SUSTAINABLE LEVEL. AND
THE UNEMPLOYMENT RATE CAPTURES
ONLY PART OF THE STORY. HAVING
DECLINED SIGNIFICANTLY IN THE
FIVE YEARS FOLLOWING THE CRISIS
THE LABOR FORCE PARTICIPATION
RATE FLATTENED OUT. AND BEGAN
REP I THINK EVEN THOUGH THE
AGING OF THE POPULATION SIX
SUGGESTED KEEP FALLING. FOR
INDIVIDUALS IN THEIR PRIME
WORKING YEARS THE PARTICIPATION
RATE FULLY RETRACED ITS POST
CRISIS DECLINE. DEFYING EARLIER
ASSESSMENTS THAT THE GLOBAL
FINANCIAL CRISIS MIGHT CAUSE
PERMANENT STRUCTURAL DAMAGE TO
THE LABOR MARKET. MOREOVER
MOREOVER AT A LONG EXPANSION
CONTINUED THE GAMES BEGAN TO BE
SHARED MORE WIDELY ACROSS
SOCIETY. THE BLACK AND HISPANIC
UNEMPLOYMENT RATES REACHED
RECORD LOWS. IN THE
DIFFERENTIALS BETWEEN THESE
RATES AND THE WHITE
UNEMPLOYMENT RATE NARROWED TO
THEIR LOWEST LEVELS ON RECORD.
AS WE HEARD REPEATEDLY ARAFAT
LISTENS ADVANCE THE ROBUST JOB
MARKET WAS DELIVERING LIFE
CHANGING GAINS FOR MANY
INDIVIDUALS FAMILIES AND
COMMUNITIES PARTICULARLY AT THE
LOWER END OF THE INCOME
SPECTRUM. IN ADDITION MANY WHO
HAD BEEN LEFT BEHIND FOR TOO
LONG WE'RE FINDING JOBS
BENEFITING THEIR FAMILIES AND
COMMUNITIES AND INCREASING THE
PRODUCTIVE CAPACITY OF OUR
ECONOMY. BEFORE THE PANDEMIC
THERE WAS EVERY REASON TO
EXPECT THAT THESE GAMES WOULD
CONTINUE. IT IS HARD TO
OVERSTATE THE BENEFITS OF A
STRONG LABOR MARKET A KEY
NATIONAL GOAL THAT WILL REQUIRE
A RANGE OF POLICIES IN ADDITION
TO THE SUPPORT OF MONETARY
POLICY. FOURTH THE HISTORICALLY
STRONG LABOR MARKET DID NOT
TRIGGER A SIGNIFICANT RISE IN
INFLATION. OVER THE YEARS
FORECASTS FROM FOMC
PARTICIPANTS AND PRIVATE SECTOR
ANALYSTS. ROUTINELY SHOWED A
RETURN 22% INFLATION BUT THESE
FORECASTS WERE NEVER REALIZED
ON A SUSTAINED BASIS. INFLATION
FORECASTS ARE TYPICALLY PRATIK
IT IT NOT ONCE THE NATURAL RATE
OF UNEMPLOYMENT OR YOU START.
AND OF HOW MUCH UPWARD PRESSURE
ON INFLATION ARISES WHEN THE
UNEMPLOYMENT RATE FALLS
RELATIVE TO YOU START. AS THE
UNEMPLOYMENT RATE MOVE LOWER
INFLATION REMAINED MUTED.
ESTIMATES OF YOU START WERE
REVISED DOWN. FOR EXAMPLE THE
MEDIAN ESTIMATE FROM FOMC
PARTICIPANTS DECLINED FROM FIVE
POINT 5% IN TWO THOUSAND
TWELVE. TWO FOUR POINT 1% AT
PRESENT. THE MUTED
RESPONSIVENESS OF INFLATION TO
LABOR MARKET TIGHTNESS WHICH WE
REFER TO AS THE FLAG OF THE
PHILLIPS CURVE. ALSO
CONTRIBUTED TO LOW INFLATION
OUTCOMES IN ADDITION LONGER
TERM INFLATION EXPECTATIONS
WHICH WE HAVE LONG SEEN AS AN
IMPORTANT DRIVER OF ACTUAL
INFLATION AND GLOBAL
DISINFLATIONARY PRESSURES MAY
HAVE BEEN HOLDING DOWN
INFLATION MORE THAN WAS
GENERALLY ANTICIPATED. US
ECONOMIES HAVE ALSO STRUGGLED
TO ACHIEVE THEIR INFLATION
GOALS IN RECENT DECADES. THE
PERSISTENT UNDERSHOOTING
INFLATION FROM OUR 2% LONGER
RUN OBJECTIVE IT CAUSE FOR
CONCERN. MANY FIND IT INTUITIVE
THAT THE FED WOULD WANT TO PUSH
INFLATION UP. AFTER ALL LOW AND
STABLE INFLATION IS ESSENTIAL
FOR A WELL FUNCTIONING ECONOMY.
AND WE'RE CERTAINLY MINDFUL AT
HIGHER PRICES FOR CENTRAL ITEMS
SUCH AS FOOD GASOLINE AND
SHELTER. ADD TO THE BURDENS
FACED BY MANY FAMILIES.
ACTUALLY THOSE STRUGGLING WITH
LESS JOBS AND INCOMES. HOWEVER
INFLATION HAS PERSISTENTLY
OCAMPO'S SERIOUS RISK OF THE
ECONOMY. INSTALLATION THAT RUNS
BELOW ITS DESIRED LEVEL CAN
LEAD TO AN UNWELCOME FALLING
LONGER TERM INFLATION
EXPECTATIONS WHICH IN TURN CAN
PULL ACTUAL INFLATION EVEN
LOWER. RESULTING IN AN ADVERSE
CYCLE OF EVER LOWER INFLATION
AND INFLATION EXPECTATIONS.
THIS DYNAMIC IS A PROBLEM
BECAUSE EXPECTED INFLATION
FEEDS DIRECTLY INTO THE GENERAL
LEVEL OF INTEREST RATES. WELL I
OCCURRED INFLATION EXPECTATIONS
ARE CRITICAL FOR GIVING THE FED
THE LATITUDE TO SUPPORT
EMPLOYMENT WHEN NECESSARY
WITHOUT DESTABILIZING INFLATION.
BUT IF INFLATION EXPECTATIONS
FALL BELOW OUR 2% OBJECTIVE
INTEREST RATES WOULD DECLINE IN
TANDEM. IN TURN WE WOULD HAVE
LESS SCOPE TO CUT INTEREST
RATES TO BOOST EMPLOYMENT
DURING AN ECONOMIC DOWNTURN.
FURTHER DIMINISHING OUR
CAPACITY TO STABILIZE THE
ECONOMY THROUGH CUTTING
INTEREST RATES. WE HAVE SEEN
THIS ADVERSE DYNAMIC PLAY OUT
IN OTHER MAJOR ECONOMIES AROUND
THE WORLD AND I'VE LEARNED THAT
ONCE IT'S AT SEN IT CAN BE VERY
DIFFICULT TO OVERCOME. WE WANT
TO DO WHAT WE CAN TO PREVENT
SUCH A DYNAMIC FROM HAPPENING
HERE. WE BEGIN A REVIEW WITH
THE CHANGES TO THE ECONOMY IN
MIND. THE REVIEW HAD THREE
PILLARS. A SERIES OF FED
LISTENS EVENTS HELD AROUND THE
COUNTRY. A FLAGSHIP RESEARCH
CONFERENCE. IN A SERIES OF
COMMITTEE DISCUSSION SUPPORTED
BY RIGOROUS STAFF ANALYSIS. AS
APPROPRIATE IN OUR DEMOCRATIC
SOCIETY WE HAVE SOUGHT
EXTENSIVE ENGAGEMENT WITH THE
PUBLIC THROUGHOUT THE REVIEW.
THE FED LISTENS EVENTS BUILT ON
A LONGSTANDING PRACTICED AROUND
THE FEDERAL RESERVE SYSTEM OF
ENGAGING WITH COMMUNITY GROUPS
THE FIFTEEN EVENTS INVOLVED A
WIDE RANGE OF PARTICIPANTS
WORKFORCE DEVELOPMENT GROUPS
UNION MEMBERS SMALL BUSINESS
OWNERS. RESIDENTS OF LOW AND
MODERATE INCOME COMMUNITIES
RETIREES AND OTHERS. HERE ABOUT
HOW OUR POLICIES AFFECT
PEOPLE'S DAILY LIVES AND
LIVELIHOODS. THE STORIES WE
HEARD AND FECKLESSNESS BECAME A
POTENT VEHICLE FOR US TO
CONNECT WITH THE PEOPLE AND
COMMUNITIES THAT OUR POLICIES
ARE INTENDED TO BENEFIT. ONE OF
THE CLEAR MESSAGES WE HEARD WAS
THAT THE STRONG LABOR MARKET
THAT PREVAILED BEFORE THE PANDA
WAS. EMPLOYMENT OPPORTUNITIES
FOR MANY AMERICANS WHEN THE
PAST HAD NOT FOUND JOBS READILY
AVAILABLE. YOUR TAKE AWAY FROM
THESE EVENTS WAS THE IMPORTANCE
OF ACHIEVING AND SUSTAINING A
STRONG JOB MARKET PARTICULARLY
FOR PEOPLE FROM LOW AND
MODERATE INCOME COMMUNITIES.
THE RESEARCH CONFERENCE BROUGHT
TOGETHER SOME OF THE WORLD'S
LEADING ACADEMIC EXPERTS STRESS
TOPICS CENTRAL TO OUR REVIEW.
AND THE PRESENTATIONS AND RUST
DISCUSSION WE ENGAGED IN. OR AN
IMPORTANT INPUT TO OUR REVIEW
PROCESS. FINALLY THE COMMITTEE
EXPLORED THE RANGE OF ISSUES
THAT WERE BROUGHT TO LIGHT
DURING THE COURSE OF REVIEW IN
FIVE CONSECUTIVE MEETINGS
BEGINNING IN JULY TWO THOUSAND
NINETEEN. ANALYTICAL STAFF WORK
PUT TOGETHER BY TEAMS ACROSS
THE FEDERAL RESERVE SYSTEM.
PROVIDED CENTRAL BACKGROUND FOR
EACH OF THE COMMITTEE'S
DISCUSSIONS. OUR PLANS TO
CONCLUDE THE REVIEW EARLIER
THIS YEAR WERE LIKE SO MANY
THINGS DELAYED BY THE ARRIVAL
OF THE PANDEMIC. WHEN WE
RESUMED OUR SESSIONS LAST MONTH
WE TURNED OUR ATTENTION TO
DISTILLING. THE MOST IMPORTANT
ONES OF THE REVIEW. IN A
REVISED STATEMENT ON A RUN
GOALS AND MONETARY POLICY
STRATEGY. THE FEDERATED
STRUCTURE OF THE FEDERAL
RESERVE REFLECTED IN THE FOMC.
ENSURES THAT WE ALWAYS HAVE A
DIVERSE RANGE OF PERSPECTIVES
ON MONETARY POLICY AND THAT IS
CERTAINLY THE CASE TODAY.
UNLESS I AM PLEASED TO SAY THAT
THE REVISED CONSENSUS STATEMENT
WAS ADOPTED TODAY WITH
UNANIMOUS SUPPORT OF COMMITTEE
PARTICIPANTS. A NEW CONSENSUS
STATEMENT LIKE ITS PREDECESSOR
EXPLAINS HOW WE INTERPRET THE
MINUTE CONGRESS HAS GIVEN US
AND DESCRIBES THE BROAD
FRAMEWORK THAT WE BELIEVE WILL
BEST PROMOTE OUR MAXIMUM
EMPLOYMENT AND PRICE STABILITY
GOALS. BEFORE ADDRESSING THE
KEY CHANGES IN OUR STATEMENT
LET ME HIGHLIGHT SOME ERRORS
AREAS OF CONTINUITY. WE
CONTINUE TO BELIEVE THAT
SPECIFYING A NUMERICAL GOAL FOR
EMPLOYMENT IS ON LIES. BECAUSE
THE MATTER MAXIMUM LEVEL OF
EMPLOYMENT IS NOT DIRECTLY
MEASURABLE AND CHANGES OVER
TIME REASONS UNRELATED TO
MONETARY POLICY. THE
SIGNIFICANT SHIFTS IN ESTIMATES
OF THE NATURAL RATE OF
UNEMPLOYMENT OVER THE PAST
DECADE REINFORCED THIS POINT.
IN ADDITION WE HAVE NOT CHANGED
OUR VIEW THAT A LAURENT
INFLATION RATE OF 2% IS MOST
CONSISTENT WITH OUR MANDATE TO
PROMOTE PROMOTE BOTH MAXIMUM
EMPLOYMENT AND PRICE STABILITY.
FINALLY WE CONTINUE TO BELIEVE
THAT MONETARY POLICY MUST BE
FORWARD LOOKING. TAKING INTO
ACCOUNT THE EXPECTATIONS OF
HOUSEHOLDS AND BUSINESSES AND
THE LAGS IN MONETARY POLICIES
AFFECT ON THE ECONOMY. THUS OUR
POLICY ACTIONS CONTINUE TO
DEPEND ON THE ECONOMIC OUTLOOK
AS WELL AS THE RISKS TO THE
OUTLOOK. INCLUDING POTENTIAL
RISKS TO THE FINANCIAL SYSTEM
THAT COULD IN OF OUR GOALS. THE
KEY INNOVATIONS IN OUR NEW
CONSENSUS STATEMENT REFLECTED
CHANGES IN THE ECONOMY I
DESCRIBED. A NEW STATEMENT
EXPLICITLY ACKNOWLEDGES THE
CHALLENGE POSED BY THE
PROXIMITY OF INTEREST RATES TO
THE EFFECTIVE LOWER BOUND. BY
REDUCING OUR SCOPE TO SUPPORT
THE ECONOMY BY CUTTING INTEREST
RATES THE LOWER BOUND INCREASES
DOWNWARD RISKS TO EMPLOYMENT
AND INFLATION. TWO COUNTIES
RISKS WE'RE PREPARED TO USE OUR
FULL RANGE OF TOOLS TO SUPPORT
THE ECONOMY. WITH REGARD TO THE
EMPLOYMENT SIDE OF OUR MANDATE.
A REVISED STATEMENT EMPHASIZES
THAT MAXIMUM EMPLOYMENT IS A
BROAD BASED AND INCLUSIVE GOAL.
THIS CHANGE REFLECTS OUR
APPRECIATION FOR THE BENEFITS
OF A STRONG LABOR MARKET
PARTICULARLY FOR MANY IN LOW
AND MODERATE INCOME COMMUNITIES.
IN ADDITION A REVISED STATEMENT
SAYS THAT OUR POLICY DECISION
WILL BE INFORMED BY OUR
ASSESSMENTS OF THE SHORTFALLS
OF EMPLOYMENT FROM ITS MAXIMUM
LEVEL. OTHER THAN BY DEVIATIONS
FROM CEMEX LEVEL AS IN OUR
PREVIOUS STATEMENT. THIS CHANGE
MATTER SUBTLE BUT IT REFLECTS
OUR VIEW THAT A ROBUST JOB
MARKET CAN BE SUSTAINED WITHOUT
CAUSING AN OUTBREAK OF
INFLATION. IN EARLIER DECADES
WHEN THE PHILLIPS CURVE WAS
STEEPER INFLATION TENDED TO
RISE NOTICEABLY IN RESPONSE TO
A STRENGTHENING LABOR MARKET.
IT WAS SOMETIMES APPROPRIATE
FOR THE TO TIGHTEN MONETARY
POLICY S. EMPLOYMENT ROSE
TOWARD ITS ESTIMATED MAXIMUM
LEVEL. IN ORDER TO STAVE OFF AN
UNWELCOME RISE IN INFLATION.
THE CHANGE TO SHORTFALLS CLICK
VERIFIES THAT GOING FORWARD
EMPLOYMENT CAMERON ADMIRABLE
TIME ESTIMATES OF ITS NEXT
LEVEL WITHOUT CAUSING CONCERNED
UNLESS ACCOMPANIED BY SIGNS OF
UNWANTED INCREASES IN INFLATION
OR THE EMERGENCE OF OTHER RISKS
THAT COULD IMPEDE THE
ATTAINMENT OF ARTICLES. OF
COURSE WHEN EMPLOYMENT IS BELOW
ITS MAXIMUM LEVEL AS IT'S SO
CLEARLY THE CASE NOW. WE WILL
ACTIVELY SEEK TO MINIMIZE THAT
SHORTFALL BY USING OUR TOOLS TO
SUPPORT ECONOMIC GROWTH AND JOB
CREATION. WE HAVE ALSO MADE
IMPORTANT CHANGES WITH REGARD
TO THE PRICE STABILITY SIDE OF
OUR MANDATE. HOW LONG RUN GOAL
CONTINUES TO BE IN FOR AN
INFLATION RATE OF 2% OUR
STATEMENT EMPHASIZES THAT OUR
ACTIONS TO ACHIEVE BOTH SIDES
OF OUR DUAL MANDATE WILL BE
MOST EFFECTIVE LONGER TERM
INFLATION EXPECTATIONS REMAIN
WELL ANCHORED AT 2% HOWEVER IF
INFLATION RUNS BELOW 2%
FOLLOWING ECONOMIC DOWNTURNS.
BUT NEVER MOVES ABOVE 2% EVEN
WHEN THE ECONOMY IS STRONG.
THEN OVER TIME INFLATION WILL
AVERAGE LESS THAN 2% HOUSEHOLDS
AND BUSINESSES WILL COME TO
EXPECT THIS RESULT. THAT
INFLATION EXPECTATIONS WOULD
TEND TO MOVE BELOW OUR
INFLATION GOAL AND POLL
REALIZED INFLATION DOWN. TO
PREVENT THIS OUTCOME IN THE
ADVERSE DYNAMICS THAT COULD
ENSUE OUR NEW STATEMENT
INDICATES THAT WE WILL SEEK TO
ACHIEVE INFLATION THAT AVERAGES
2% OF THE TIME. THEREFORE
FOLLOWING PERIODS WHEN
INFLATION IS RUNNING BELOW TWO
PERCENT. APPROPRIATE MONETARY
POLICY WILL LIKELY AIM TO
ACHIEVE INFLATION MODERATELY
ABOVE 2% FOR SOME TIME. IN
SEEKING TO ACHIEVE INFLATION
THAT ADVERSARY OVER TIME WE ARE
NOT TYING OURSELVES TO A
PARTICULAR MATHEMATICAL FORMULA
THAT DEFINES THE AVERAGE. THUS
OUR APPROACH APPROACH COULD BE
VIEWED AS A FLEXIBLE FORM OF
AVERAGE INFLATION TARGETING.
OUR DECISIONS ABOUT APPROPRIATE
MONETARY POLICY WILL CONTINUE
TO REFLECT A BROAD ARRAY OF
CONSIDERATIONS AND WILL NOT BE
DICTATED BY ANY FORMULA. OF
COURSE IF EXCESSIVE
INFLATIONARY PRESSURES WERE TO
BUILD OR INFLATION EXPECTATIONS
WERE TO RATCHET ABOVE LEVELS
CONSISTENT WITH OUR GOAL. IT
WOULD NOT HESITATE TO ACT.
REVISIONS TO OUR STATEMENT ADD
UP TO A ROBUST UPDATING OF OUR
MONETARY POLICY FRAMEWORK. TO
AN EXTENT THESE REVISIONS
REFLECT THE WAY WE HAVE BEEN
CONDUCTING POLICY IN RECENT
YEARS. AT THE SAME TIME HOWEVER
THERE ARE SOME IMPORTANT NEW
FEATURES. OVERALL A NEW
STATEMENT ON LONGER RUN GOALS
AND MONETARY POLICY REGGIE
CONVEYS OUR SYSTEM CAN YOU
STRONG COMMITMENT TO ACHIEVING
OUR GOALS. GIVEN THE DIFFICULT
CHALLENGES PRESENTED BY THE
PROXIMITY OF INTEREST RATES THE
EFFECTIVE LOWER BOUND. IN
CONDUCTING MONETARY POLICY WE
WILL REMAIN HIGHLY FOCUSED ON
FOSTERING AS STRONG A LABOR
MARKET AS POSSIBLE FOR THE
BENEFIT OF ALL AMERICANS. AND
WE WILL STEADFASTLY SEEK TO
ACHIEVE 2% INFLATION RATE OVER
TIME. A REVIEW HAS PROVIDED A
PLATFORM FOR PRODUCTIVE
DISCUSSION AND ENGAGEMENT WITH
THE PUBLIC WE SERVE. THE FED
LISTENS EVENTS HELP US CONNECT
WITH OUR CORE CONSTITUENCY THE
AMERICAN PEOPLE. AND HERE
DIRECTLY HOW THEIR EVERY DAY
LIVES ARE AFFECTED POLICIES. WE
LEDA CONDUCTING A REVIEW AT
REGULAR INTERVALS IS A GOOD
INSTITUTIONAL PRACTICE
PROVIDING VALUABLE FEEDBACK
ENHANCING TRANSPARENCY AND
ACCOUNTABILITY. AND WITH THE
EVER CHANGING ECONOMY FUTURE
REVIEWS WILL ALLOW US TO TAKE A
STEP BACK REFLECT ON WHAT WE'VE
LEARNED AND ADAPT OUR PRACTICES
AS WE STRIVE TO ACHIEVE OUR
DUAL MANDATE GOALS. AS OUR
STATEMENT INDICATES WE PLAN TO
UNDERTAKE A THOROUGH PUBLIC
REVIEW OF OUR MONETARY POLICY
STRATEGY TOOLS AND
COMMUNICATION PRACTICES.
ROUGHLY EVERY FIVE YEARS. THANK
YOU VERY MUCH. THANK YOU CHECK
OUT ALL THE REMARKS AT ALL FOR
YOU GAUGE WHAT CONVERSATION. I
ACTUALLY AT AT. SORRY CAN YOU I
THINK I CAN HEAR YOU NOW SUSAN.
OKAY THANK YOU VERY MUCH HOW. I
BOTH FOR YOUR REMARKS OUT NEW
CONSENSUS. AND ALSO FOR IN.
CONGRESS AND I BELIEVE THAT
THIS IS ACTUALLY THE- THAT.
REMARK AFTER THE WHOLE
CONFERENCE IN AUGUST. SESSION
YEAH ANOTHER. I THINK THAT'S IT.
RIGHT CLICK NATURE OF IT YOU
FOR US AND SO I WANTED. FOR
THAT AS WELL. WHY DON'T WE JUST
DIG RIGHT IN LIKE A CAR CURRENT.
YOU. AND I THINK WHAT WE START
WITH. WHICH IS FOCUSED ON BUT
IT'S IN EIGHTY TWO I. OUR
STRATEGY THAT YOU'RE FOLLOWING.
SO AS YOU. INFLATION ONE HOUR.
HOWEVER GOING FORWARD YEAH TWO
EIGHT ONE ALL RIGHT IN ORDER IN
STRATEGY. A LOT OF DISCUSSION.
HOW LONG OR WHERE OF WHAT THE-
RIGHT YES LIKE I WONDER YOU SAY
MORE ABOUT HOW YOU'RE
COMMUNICATING THAT. TO WHAT
EXTENT IS IT GOING TO. EACH.
WELL NOT FOR THE PUBLIC
COMMUNICATION EVIDENCE IS VERY
IMPORTANT AS YOU POINT OUT THAT
AS I MENTIONED IN MY REMARKS.
WE'RE ONE THE FED LESSONS
EVENTS AND MANY OTHER
ENGAGEMENTS THAT. PEOPLE DON'T
GENERALLY THINK ABOUT. WHICH
MOVING UP AS DICK THANK IN
THERE IS THAT THE- WE'RE WE'RE
TALKING ABOUT INFLATION MOVING
MODEL DURABILITY WHICH
CONSISTENT WITH THE OVERSHOOTS
WILL BE MODERATE WHICH IS TO
SAY NOT LARGE AND THEY WILL FOR
SOME TIME WHICH IS TO SAY NOT
PERMANENT OR- STAND FOR VERY
LONG. IT'S A TIME. SO I THINK
IT'S VERY IMPORTANT THAT WE GET
THAT MESSAGE OUT IT'S ALSO
IMPORTANT THAT- I THINK THAT
PEOPLE UNDERSTAND THAT THERE IS
THIS IS NOT A FORMULAIC
APPROACH- YOU KNOW THE
COMMITTEE WILL CONTINUE TO
CONSIDER ALL OF THE THINGS THAT
TYPICALLY CONSIDERS. IN MAKING
MONETARY POLICY- BUT WILL
INSPIRE TO DO TO HAVE
INFLATION- RUNABOVE TWO
PERCENT- AFTER PERIODS IN WHICH
IT RUNS FOR EXTENDED EXTENDED
PERIOD BELOW 2% SO THAT WE CAN
AVERAGE 2% SO I THINK THAT THAT
CONCEPT SHOULD BE WELL
UNDERSTOOD. AND I THINK IT'S
THE APPROPRIATE WHAT I BEGAN
THE REVIEW. WE UNDERSTOOD THAT
THE SITUATION WE'RE IN CALLS
FOR AN EXPLORATION OF MAKE UP
STRATEGIES OF VARIOUS KINDS AND
THIS SEEMS TO US TO BE THE
RIGHT MAKE UP STRATEGY WHERE
YOU WERE- UNDER SHOOTS OF
INFLATION ARE NOT FORGOTTEN BUT
ARE ARE MADE UP AND MAKE IT UP
IN A WAY THAT. THAT ALLOWS US
TO- YOU KNOW TO CONTINUE
CONSIDER ALL THE OTHER THINGS
THAT COME INTO MONETARY POLICY
OFTEN UNEXPECTEDLY RATHER THAN
TRYING TO FIND- YOU FOLLOW A
PARTICULAR FORMULA. THANK YOU
I'M AT. ITS IN A WAY THAT AND
YOU'RE CALLING. HAVING RIGHT AT
IT'S MORE OF AN EVOLUTION
PERHAPS. SHE. I THINK THAT. BUT.
IF I COULD JUST PUSHED BACK
OKAY- AT TO THE CONCERT YOU
MADE ABOUT THE- AND- BUT WE'RE
FOCUSED. REALLY AT LUNCH
ECONOMIC RIGHT AT THE MOMENT.
ARE THERE CHANGES IN OUR-
ACTIVE THE IS THE RESULT. YOUR
STRATEGY THAT YOU HAVE. SO I
GUESS I WOULD I WOULD JUST SET
THE TO GET A LITTLE BIT WE
BEGAN THE REVIEW- IN WE
ANNOUNCED IT PUBLICLY THEY WERE
BEGINNING TO REVIEW IN EARLY
TWO THOUSAND AND NINETEEN SO
THE- END AND- WE HAD PLANNED TO
ANNOUNCE OUR CONCLUSIONS AND
INDEED WE'RE READY TO ANNOUNCE
OUR CONCLUSIONS. IN THE APRIL
OR JUNE MEETING THIS YEAR SO
MOST OF THE WORK THAT WAS DONE
AND IT WAS A LOT OF WORK DONE
TOOK PLACE DURING TWO THOUSAND
AND NINETEEN. SO THE REVIEW IS
MEANT TO ESTABLISH. A FRAMEWORK
FOR MONETARY POLICY THAT WILL
GUIDE OUR- DECISIONS
FORESEEABLE FUTURE WAS MEANT TO
TAKE INTO ACCOUNT. THE LEARNING
THAT WE THAT WE DID IN WATCHING
A FULL BUSINESS CYCLE TAKE
PLACE AFTER THE GLOBAL
FINANCIAL CRISIS WE- SEEN A
FULL BILL CYCLE OR CLOSE TO IT.
AND NOW WE HAVE INDEED SEEN IF
THERE'S A CYCLE SO I THINK WE
THOUGHT IT WAS TIME TO UPDATE
SO IT WASN'T- IT WASN'T
DESIGNED TO DICTATE ANY
PARTICULAR FUTURE DECISIONS
ABOUT. INTEREST RATES OR OTHER
MONETARY POLICIES HOWEVER. ALL
OF THE THINGS WE DO. GOING
FORWARD WILL BE WILL REFLECT
THE CHANGES THAT WE MADE TO THE
FRAMEWORK SO I WOULD I WOULD
THINK OF IT THAT WAY IT'S IT
DOESN'T DICTATE PARTICULAR.
OUTCOMES THOUGH- AT PARTICULAR
MEETINGS WORK WITH. OR THAT YOU
KNOW OR THE TIMING OF THOSE
OUTCOMES. OTHER THAN THE GOALS.
SEEK TO ACHIEVE SO YOU YEAH
YOUR GET MORE OUT AS ONE EIGHT
THE RATIONALE AND YOUR THANK
YOU FOR WATCHING ARE YOU. LEFT
ARM YOU MENTIONED THAT IT. R.
S. EIGHTEEN MONTHS AWAY OR ACT
ONLY AND IF YOU WERE OUT OF.
YOUR MOTIVATIONS YES BUT ALSO
WHETHER IT. I'M ONE PROCESS
FINDS AND HOW WOULD. ANYTHING
DIFFERENTLY. SURE SOME OF THE
REVIEW IS REALLY- PART OF A
BROADER PROGRAM FOR BROADER
PROGRAM I AM OF ENHANCED
TRANSPARENCY ACCOUNTABILITY
REALLY SOMETHING THE FEDS BEEN
WORKING ON FOR THIRTY PLUS
YEARS NOW YOU KNOW TODAY
SURVEYS SHOW THAT PUBLIC FAITH
IN LARGE INSTITUTIONS AROUND
THE WORLD IS UNDER PRESSURE AND
SO I THINK INSTITUTION LIKE THE
FED HAVE TO AGGRESSIVELY SEEK
TRANSPARENCY AND ACCOUNTABILITY
TO YOU KNOW TO PRESERVE OUR
DEMOCRATIC LEGITIMACY AND THEIR
BUNCH OF THINGS THAT WE'RE
DOING THE REVIEW WAS THE CENTER
OF THAT THOUGH- SO OTHER I
THOUGHT OTHER. CENTRAL BANKS
HAVE DONE VARIOUS FORMS OF
REVIEWS- NOT ALL OF THEM OF
THEIR BRAHMACHARI POLICY BUT-
SOME HAD AND I THOUGHT THIS
WOULD BE SOMETHING WE COULD DO
WE GET GREAT BENEFITS AND ALSO
BE ABLE TO UPDATE OUR
FRAMEWORK- ANY ECONOMIC
QUESTION WE HAD TO ANSWER WAS
HOW TO ADAPT OUR FRAMEWORK TO
WHAT WE REALLY HAD LEARNED
SINCE THE GLOBAL FINANCIAL
CRISIS DURING THAT THAT LONG
EXPANSION AS I MENTIONED WE
KNEW THAT WE WOULD YOU KNOW
THAT WE WERE. GONNA BE CLOSER
THE EFFECTIVE LOWER BOUND IN
ALL LIKELIHOOD AND HAD TO
ADDRESS THAT I AS I DESCRIBED
IN MY REMARKS WE DIDN'T HAVE
WOULD COME OUT- I'M VERY HAPPY
WITH WHERE IT CAME OUT I WILL
IF YOU'LL FORGIVE ME OR ALLOW
ME JUST SAY FOR A SECOND THAT
WE WERE IN THE DESIGN PROCESS
OF THIS- WHEN VICE CHAIR RICH
CLARET ARRIVED. IN THE FALL OF
TWO THOUSAND EIGHTEEN. AND THEY
WERE ONLY THREE GOT I THINK THE
TIME. HE HAD HE HE HAD THE
TIME. AND REALLY TOOK THIS ON
AND LET IT. AND I WE WOULD NOT
BE SITTING HERE TODAY TALKING
ABOUT THIS WITHOUT HIS GREAT.
LEADERSHIP EFFORTS AND IN IN
BRINGING THIS TYPE FOR I ALSO
MENTIONED OTHER MEMBERS OF
THAT. IN THE SUBCOMMITTEE ON
COMMUNICATIONS WHICH WHICH RISK
CLEAR KURTZ NOT GOVERNOR
BRAINARD. ERIC ROSENGREN AND-
RIGHT AND PRETTY MUCH EVERY
MEMBER OF THE FOMC EVERY
PARTICIPANT CAN LOOK AT THE
DOCUMENT AND SEE THEIR OWN
VIEWS. AND INPUT REFLECTED SO.
I'M SO I THINK IN TERMS OF. AND
SOME THINGS AND- I THINK THERE
WERE THEY WERE GREAT GAINS AND
IT JUST IN THE PROCESS OF
ENGAGING WITH LAWMAKERS AND
ENGAGING WITH THE GENERAL
PUBLIC ON THESE ISSUES AND
SEEKING INPUT AND
ACCOUNTABILITY I THINK THAT IS
THE MOST WELCOME THING WHEN YOU
DO THAT AND I. ACT SO I THINK
EVEN APART FROM THE GAMES IN
THE FRAMEWORK- THAT THAT WAS
THAT WAS QUITE STRUCK BY THE
FED LISTENS ADVANCED WE'RE
JUST- JUST REALLY STRIKING IF
YOU YOU WERE IN CHICAGO I THINK
THAT THAT. THAT CONFERENCE THEY
WERE TWO PANELS OF PEOPLE FROM
LOW AND MODERATE INCOME
COMMUNITIES WHO SPOKE ABOUT YOU
KNOW THE ECONOMY IN THEIR LIVES
AND IT WAS JUST RIVETING IT WAS
REALLY THAT WAS THE HIGHLIGHT
OF THAT CONFERENCE WHICH OF
COURSE WAS CHOCKED WITH YOU
KNOW- GLOBAL MONETARY POLICY
EXPERTS BUT TO HEAR. THEM
TALKING ABOUT WHAT A TIGHT
LABOR MARKET MEANS IN THEIR
COMMUNITIES WAS SOMETHING THAT
NONE OF US WILL FORGET AND I
THINK WE YOU KNOW WE KNEW THAT
INTELLECTUALLY BUT I THINK.
HEARING IT AND HEARING A LOT
OVER THE COURSE OF THAT LISTENS
AND THEN SEEING THE SHARING OF
THE BENEFITS FROM OF A LABOR
MARKET IT'S TIGHT. IN THE IN
THE SORT OF EIGHTEEN NINETEEN
YEARS OF THE EXPANSION WAGES
BEGAN TO MOVE UP MORE FOR
PEOPLE AT THE LOWER END WE SAW
LABOR FORCE PARTICIPATION WE
SAW. I EMPLOYERS YOU KNOW DOING
LOTS AND LOTS OF THINGS TO
RECRUIT PEOPLE WHO WHO MIGHT
NOT OF BEEN RECRUITED EARLIER
SO. IT'S A IT'S A VERY VIRTUOUS
THING. AND ONE THAT I'M I
MENTIONED IN MY REMARKS. WE'LL
TAKE SUPPORT FROM CONGRESS OVER
TIME TO IT. IT'S NOT JUST ABOUT
TRADE POLICY IT'S ABOUT
EDUCATION IT'S ABOUT TRAINS
ABOUT HEALTH CARE IT'S ABOUT
ALL THE THINGS THAT ENABLE
PEOPLE TO. GET INTO THE LABOR
FORCE AND STAY THERE AND
PROGRESS IN THEIR CAREERS
THROUGH THE LABOR FORCE SO. I
THINK THOSE ARE SOME OF THE
THINGS I TAKE AWAY FROM FROM
THE PROCESS. SO I MEAN AS
SOMEONE. AND AT LEAST SOME OF
APPROX AT ALL I WILL TELL AT
ALL. HOW PUBLIC OKAY. BOB AND
REALLY AS WE OUT. I'M ENGAGED
DIFFERENT WAYS I ONE I WONDER
IF YOU STATE OUT AS REGULAR
PROCESS THE- INFLUENCE OF
VOICES FROM THE PUBLIC ACTUALLY
DOES PLAY A ROLE IN TERMS OF
OUR MONETARY POLICY DECISIONS
AND THINKING BECAUSE THAT'S A
TOPIC I THINK IS NOT AT ALL
WELL UNDERSTOOD FIVE. WELL WE
SO WE HAVE THROUGH THE RESERVE
BANK SYSTEM. WE HAVE A FRONT.
EIGHT YOU KNOW UNIQUE REALLY-
PRESENCE IN COMMUNITIES AROUND
AROUND THE UNITED STATES AND
WE'RE PRESIDENT IN NOT JUST IN
THE BUSINESS COMMUNITY BUT AN
EDUCATIONAL MEDICAL- WEED
THROUGH A COMMUNITY AFFAIRS.
GROUPS WERE PRESENT IN
NEIGHBORHOODS AND- WOULD BE
HARVEST THAT INFORMATION AND-
IT GOES INTO A LOT OF WHAT- YOU
KNOW FOMC PARTICIPANTS SAY GOES
INTO THE RESEARCH THAT WE DO
BECAUSE THE DATA THAT WE
COLLECT. WE CREATE DICK COLLECT
A LOT OF UNIQUE DATA ON. BIRTH
OUTCOMES AMONG DIFFERENT GROUPS
AND THAT KIND OF THING AND ALL
OF THAT GOES INTO- REFORMS
EVERYONE SEE THE LIBERATION'S
IN PARTICULAR IT INFORMS OUR
UNDERSTANDING OF WHAT MAXIMUM
EMPLOYMENT REALLY MEANS SO WE
FOCUS ON. IT AND EVERY OF ON C.
MEETING IN EVERY BRIEFING IN
PRETTY MUCH ALL OF MY PUBLIC
REMARKS AND MY COLLEAGUES
PUBLIC REMARKS ON THE MONETARY
POLICY REPORT WE WILL CALL OUT.
DIFFERENT FOR EXAMPLE
UNEMPLOYMENT RATES AND LABOR
FORCE. RESULTS FOR DIFFERENT
RACE. NOT JUST BECAUSE IT'S THE
RIGHT THING TO DO REALLY DOES
INFORM OUR THINKING ABOUT ABOUT
MAXIMUM EMPLOYMENT. AND SO THIS
IS SOMETHING THAT WE'RE VERY
FOCUSED ON THESE THESE
DISPARITIES ARE LONGSTANDING
FEATURE OF THE AMERICAN
ECONOMY. AND THEY REALLY DO
HOLD US BACK- IT YOU KNOW AS AS
RAPHAEL BOSTIC- SO POINTED OUT
SO WELL RECENTLY THEY THEY WAY
ON THE WHOLE. ECONOMY AND- SO
ALL OF THAT GOES INTO OUR
THINKING NOT IN A MECHANICAL
WAY BUT IN OUR UNDERSTANDING OF
WHAT MAXIMUM EMPLOYMENT IS AND
THAT'S WHY YOU YOU DIDN'T YOU
SAW WHEN WE- DURING TWO
THOUSAND NINETEEN. WHEN THE
UNEMPLOYMENT RATE FELL TO THREE
AND A HALF PERCENT WELL BELOW
MOST ESTIMATES OF THE
SUSTAINABLE RATE THAT YOU KNOW
THAT NATURALLY WANT TO PLUMMET.
YOU DIDN'T SEE US RAISING RATES
OR EXPRESSING CONCERN YOU
SOUGHT US YOU HEARD US
CELEBRATING THAT AND YOU
ACTUALLY SAW IS CUTTING RATES.
DURING TWO THOUSAND NINETEEN
NOT BECAUSE OF THAT BUT BUT
NONETHELESS WE MORE HESITANT TO
CUT RATES BECAUSE. OF THE VERY
LOW LEVEL OF UNEMPLOYMENT. SO
IT JUST IT JUST TO FOLLOW UP ON
THAT. A BIT YOU HAVE MADE SOME
VERY STRONG. AND VERY CLEAR
STATEMENTS ABOUT RACIAL
JUSTICE. AND THE CHALLENGES OF
ECONOMIC DISPARITIES
PARTICULARLY RELATED. TO RACIAL
INEQUALITIES AND OF COURSE WE
KNOW THAT. ON MANY OF THOSE
DISPARITIES ARE IN SUCH CLEAR
RELIEF IN THE CURRENT CONTEXT.
AND SO I THINK TO ASK YOU TO
SAY A BIT MORE HAVING EXPLAINED
TO US THAT THE EMPLOYMENT
MANDATE WILL BE. INTERPRETED IN
A BROADER AND MORE INCLUSIVE
WAY WHAT ELSE CAN I DO TO
ADDRESS SOME OF THOSE- THOSE
REALLY IMPORTANT DISPARITIES.
I'M SO I WOULD SAY AS AS I
MENTIONED IS A LONG RUNNING
FEATURES OF OUR ECONOMY WHICH
WHICH WHICH FIGURE INTO OUR
UNDERSTANDING OF THE ECONOMY
INTO OUR DECISIONS- AND I WOULD
SAY ALSO THAT THE WATER LONG
STANDING. ADAMIC HAS REALLY
SHOWN THAT THE EFFECTS OF THE
PANDEMIC HAVE FALLEN TO. A
LARGE EXTENT NOT EXCLUSIVELY
BUT TO A LARGE EXTENT. ON
PEOPLE WORKING IN THE SERVICE
ECONOMY AND- PUBLIC FACING
JOBS. AND THESE ARE RELATIVELY
LOW WAGE WORKERS AND THAT'S
BEEN HEAVILY SKEWED TOWARD
MINORITIES WOMEN LOW AND
MODERATE INCOME COMMUNITY- SO.
YOU KNOW WHAT IS THE FEDS WHAT
KIND OF BED DO SO AS I
MENTIONED WE DO ALREADY IF YOU
LOOK IF YOU LOOK AT THE RECORD
WE'RE DOING LOTS OF RESEARCH.
AROUND THESE ISSUES WERE
TALKING ABOUT IT- PUBLICLY AND
WE ARE TALKING ABOUT THESE
ISSUES PUBLICLY AND WE'RE
CORPORATELY INDOOR THANKING- I
THINK THE KEY THING THOUGH IS
THAT. THE SINGLE MOST IMPORTANT
THING WE CAN DO HERE. IS TO
SUPPORT A STRONG LABOR MARKET.
AS I MENTIONED EARLIER IS SOME
THAT YOU KNOW. WE CAN DO BUT
THAT THAT IS MORE OF AN ALL
GOVERNMENTAL SOCIETY- PROJECT
THAT WE TAKE ON- FORCEFULLY.
IT'S IT CAN'T JUST BE THE WAY
THE FED MANAGES INTEREST RATES
THROUGH THE BUSINESS CYCLE
ALTHOUGH YOU KNOW THERE WAS
IT'S NOT IT TO WAIT UNTIL THE
EIGHTH AND NINTH YEAR OF THAT.
OF THE CYCLE TO GET THOSE KINDS
OF RESULTS IS YOU KNOW WE CAN
DO BETTER THAN THAT BUT WITH
OTHER POLICIES- I THINK- SO I
THINK WE'RE DOING. THOSE THINGS
THAT WE CAN DO I THINK WE'RE A
LOT OF THEM WERE DOING AND WHAT
CAN I KEEP LOOKING FOR NEW WAYS
IT IS IMPORTANT TO POINT OUT
THOUGH. OUR INTEREST RATE-
POLICIES AND OTHER POLICIES
AFFECT ALL AMERICANS ARE FOR
THE BENEFIT OF ALL AMERICANS
THEY'RE JUST. IN THAT SENSE
BLOCKED FOOLS. AND THERE ARE
BETTER TOOLS FOR OF FORD
DEALING DIRECTLY WITH
DISTRIBUTIONAL ISSUES AND THOSE
ARE THE TOOLS. THAT ARE HELD IN
OUR SYSTEM OF GOVERNMENT BY BY
ELECTED OFFICIALS. AND THE
PEOPLE WHO ARE APPOINTED AN
EXECUTIVE BRANCH. WHO WORK FOR
AN ELECTED OFFICIAL SO. IT IS
AS I SAID IT NEEDS TO BE A AND
ALL OF GOVERNMENT ALL OF
SOCIETY KIND OF THING WILL KEEP
GOING WE CAN DO BUT I WOULDN'T
ON. AT FIVE IF WE REALLY NEEDED
TO BE BROADER THAN JUST THE FED
AND I THINK WE'RE WE'RE SORT OF
DOING THE THINGS THAT WE THINK
WE CAN DO IT ALLEN WHAT WE'LL
KEEP DOING. SO IT CERTAINLY
DOES SOUND KIND OF- IT HAS TO
BE A BROADER EFFORT. ON THE IN
THAT CONTEXT WANTED TO JUST ASK
YOU A BIT. ABOUT SOME OF THE
SPECIAL PROGRAMS THE FACILITIES
TO TRY TO. GET FINDS OUT INTO
THE COMMUNITY- IN PARTICULAR.
IN PLACES CENTER FOR GROUPS
THAT ARE REALLY STRUCK A- MINE.
AS YOU THE FED HAS COME UNDER
SOME CRITICISM THAT. SOME THE
FACILITIES ARE NOT. REACHING
SOME OF THE GROUPS THAT ARE THE
HARDEST HIT FOR EXAMPLE.
MINORITY BUSINESSES ARE OFTEN
OFTEN DESCRIBED AND I WONDER IF
YOU'D SAY SOMETHING. A BIT MORE
ABOUT WHETHER THERE. ARE
ADDITIONAL THINGS THAT THE FED
COULD BE DOING PERHAPS IN
PARTNERSHIP. WITH WITH OTHERS
IN THAT CONTEXT. SO WE DID A
LOT OF ON THE MAIN STREET
FACILITY WE DID A GREAT DEAL
OUTRAGE TO. A COMMUNITY.
DEVELOPMENT FINANCIAL
INSTITUTIONS AND MINORITY.
DEPOSITORY INSTITUTIONS. AND
OTHER ORGANIZATIONS THAT
REPRESENT THOSE CONSTITUENCIES.
AND SO WE'RE DOING EVERYTHING
WE CAN TO REACH THOSE
CONSTITUENCIES REMEMBER THIS IS
A VERY BROAD PROGRAM- DESIGNED
TO MAKE LOANS THESE ARE THESE
ARE LOANS THAT WE CAN MAKE WE
CAN'T MAKE GRANTS THE WAY
EFFECTIVELY THE PPP PROGRAM
DOES. THAT'S REALLY FISCAL
POLICY WHAT WE'RE DOING IS
WE'RE MAKING LOANS AND THE LAW
REQUIRES US TO HAVE A
REASONABLE EXPECTATION OF THE
LOANS WILL BE REPAID IF. A BANK
HAS TO KEEP A 5% TO A PIECE OF
THAT LOAN. SO WE ARE WORKING TO
REACH OUT YOU KNOW SMALL OR
MEDIUM SIZED BUSINESSES THROUGH
THAT. BUT I DO THINK YOU KNOW
THERE IS- THIS IS A UNIQUE
EXERCISE FOR US WE'VE NEVER
DONE ANYTHING LIKE THAT LENDING
TO- BUSINESSES. I WOULD SAY
WE'VE NEVER DONE IT BUT WE
NEVER TRIED TO REACH OUT
BROADLY LIKE THIS PARTICULARLY
TO SMALLER INSTITUTIONS WE'RE
REALLY NOT. THE IDEAL. WE'RE
AND WE'RE WE'RE DOING IT ACT
WE'VE WE'VE PUT MORE EFFORT AND
WORK INTO THE MAIN STREET
FACILITY AND EVERYTHING ELSE.
WE'VE DONE IS. CHALLENGING
EXERCISE WE'RE MAKING PROGRESS
THERE I THINK WE'RE AROUND
READING MORE MORE BACK SIGNED
UP MORE MORE LOANS GETTING
MADE- SEE IF I CAN SMALL
COMMUNITY BANKS ARE IN FACT
ACTIVE- BUT IT'S GOING TO TAKE
MORE THAN THAT IT'S GOING TO
TAKE- YOU KNOW MORE- MORE
DIRECT. AID I SANK TO SMALLER
BUSINESSES AND I THINK THAT
THAT'S. THAT'S AN AREA WHERE
FISCAL POLICY. CAN REALLY DO.
THINGS THAT IT'S VERY HARD FOR
TO DO FACT PEOPLE GRAHAM. AT
THE DEALING. SO I WOULD LOOK
TWO ONE I WOULD LIKE TO. POLICY
FOR HELP THERE. YEAH AND SO
CLEARLY IT HAS TO BE A
PARTNERSHIP TO HAVE THAT KIND
OF BROAD IMPACT ON THAT YOU
KNOW THAT WE WOULD HOPE TO SEE.
I DO WANNA TALK A BIT ABOUT.
THE CURRENT CRISIS COMPARED TO
OTHER CRISES THAT THE THAT THE
FED HAS GRAPPLED WITH- IN
PARTICULAR ONE OF THE ONE OF
THE QUESTIONS THAT I GET ASKED
IS TO WHAT EXTENT FROM THE
PERSPECTIVE OF MONETARY POLICY
IS GRAPPLING WITH THE MAJOR
RECESSION THAT'S CAUSED BY A
PANDEMIC ANY DIFFERENT FROM
GRAPPLING WITH ONE THAT IS
CAUSED BY FINANCIAL CRISIS AS
WE SAW ON BACK IN 200-082-0009
VERY INTERESTED IN YOUR
THOUGHTS ABOUT ABOUT THAT
DIFFERENCE. YES IT'S A VERY
VERY DIFFERENT SITUATION THE
TWO EPISODES AND I THINK THAT I
THANK YOU GUYS SO FAR THAT TO.
BEGINNINGS OF RECOVERY AND THAT
RECOVERY- ARE QUITE DIFFERENT.
THIS CRISIS DID NOT ORIGINATE
IN THE FINANCIAL SYSTEM WERE
FROM AN ASSET BUBBLE OR FROM IN
BALANCE OR ANYTHING LIKE THAT-
AND ALL OF THOSE. FEATURES OF
THE- YOU KNOW THE HOUSING
BUBBLE A HOUSING CRISIS AND-
AND THE YOU KNOW THE FINANCIAL
CRISIS. THAT WAS THE HEART OF
THE GLOBAL FINANCIAL CRISIS AND
IT WAS IT WAS GLOBAL IN THAT
SENSE. THIS REALLY WAS A
NATURAL DISASTER THAT HIT AN
ECONOMY THAT WAS DOING WELL.
WITH THE BANKING SYSTEM THAT
WAS WELL CAPITALIZED AND HIGHLY
LIQUID AND- AND UNDERSTOOD ITS
RISK PRETTY WELL- AND WHAT IS
ACTUALLY GOING TO. SORT OF
STRENGTH SO THAT'S THAT'S VERY
DIFFERENT ALTHOUGH WE HAVE SEEN
THE LINES EMERGE IN THE
BROADCAST SYSTEM AND CAPITAL
MARKETS FOR EXAMPLE. UNDER
GREAT STRESS WE'VE SEEN
SOMETHING AND NO DOUBT WILL
COME BACK AND LOOK AT THOSE ONE
THAT WHEN IT'S TIME TO DO THAT.
I MEAN WHAT WHAT HAPPENED HERE
WAS. ESSENTIALLY PEOPLE AROUND
THE WORLD SOMETIMES REQUIRED BY
THE GOVERNMENT SOMETIMES ON
THEIR OWN WITHDREW FROM CERTAIN
KINDS OF ECONOMIC ACTIVITY TO
PROTECT THEMSELVES AND PANDEMIC
ALL AROUND THE WORLD THERE'S NO
PRECEDENT FOR THAT THERE'S NO
PLAYBOOK FOR THAT SO OUR
RESPONSE WAS ACTUALLY QUITE
DIFFERENT FROM WHAT IT WAS IN
THE- IN THE FINANCIAL CRISIS SO
WE COULD IMMEDIATELY CUT RATES
TO ZERO WEEK WE RAISED AT. OUR
ASSET PURCHASES ESSENTIALLY
WITHOUT LIMIT TO SUPPORT MARKET
FUNCTION- WE WEREN'T WE WEREN'T
TRYING TO STIMULATE THE ECONOMY
IN THE SENSE THAT THE ECONOMY
WAS PARTIALLY SHUT DOWN THE
IDEA WAS NOT TO STIMULATE
PEOPLE TO GO OUT TO SPEND IT
WAS TO PROVIDE A LITTLE BIT OF
COMFORT TO ASSURE THAT THAT
THAT CREDIT WAS FLOWING TO
HOUSEHOLDS AND BUSINESSES AND
THEN WHEN THE EXPANSION CAME.
TO SUPPORT THAT RECOVERY AND
EXPANSION WITH MONETARY POLICY
SO VERY VERY DIFFERENT ALSO WE
YOU KNOW THIS THIS BUSINESS OF
LENDING TO NON FINANCIAL
CORPORATES AND ALSO TO. STATE
LOCAL GOVERNMENT. UNIQUE AND
THAT WAS BECAUSE THE
INTERMEDIATION PROCESS SIMPLY
STOPPED. THE FINANCIAL SYSTEM.
IT WAS OF SUCH A FLIGHT TO
SAFETY WHEN THE PANDEMIC REALLY
HIT. THAT THAT IT WOULD BE A
CREDIT INTERMEDIATION BETWEEN
SAVERS AND BORROWERS JUST
ESSENTIALLY STOPPED AND WE HAD
TO STEP IN AS A BACKSTOP. FOR
THE MUNICIPAL MARKET FOR THE
CORPORATE MARKETS AND FOR AND
HAVE BEEN DOING SO FOR SMALLER
BUSINESSES. THIS AND WE DID SO
AROUND THE WORLD FOR DOLLAR
FUNDING MARKETS NOT THAT WAS
SIMILAR TO IT DURING THE
FINANCIAL CRISIS SO. IT'S VERY
DIFFERENT BUT I WOULD SAY THIS
THAT. WE YOU KNOW SO WE HAD THE
DEEPEST QUARTER LOSS IN GDP IT
WOULD EVER HAD BUT REMEMBER THE
ECONOMY WAS STRONG BACK IN
FEBRUARY SO. THERE'S A LOT OF
STRENGTH IN THE ECONOMY IN THE
RECOVERY IN MAY AND JUNE. CAME
SOONER AND WAS STRONGER THAN
EXPECTED SO THAT THE DENNIS
STILL A HEALTHY ECONOMY UNDER
HERE. EXCEPT FOR THIS AREA
THAT'S BEEN DIRECTLY AFFECTED
BY COVID SO. IF WE CAN KEEP THE
DISEASE UNDER CONTROL. THE REST
OF THE ECONOMY CAN RECOVER
FAIRLY QUICKLY THE PROBLEM THIS
TIME IS THAT THERE'S A
PARTICULAR PART OF THE ECONOMY-
WHICH INVOLVES GETTING PEOPLE
TOGETHER. AND FEEDING THEM
FLYING AROUND THE COUNTRY
HAVING THEM SLEEP IN HOTELS
ENTERTAINING THEM THAT PART OF
THE ECONOMY WILL WILL FIND IT
VERY DIFFICULT TO RECOVER.
THAT'S A LOT OF WORKERS THAT'S
MILLIONS OF PEOPLE WHOSE JOBS
ARE. ARE THEY'RE REALLY GONNA
STRUGGLE TO FIND WORKING WE
NEED TO STAY WITH THOSE PEOPLE
WE NEED TO SUPPORT THEM. AND
HELP THEM GET BACK INTO THE
WORKING LIVES DAY IN THEIR
HOMES CONGRESS HAS DONE A LOT
ON THAT WE- A LOT OF KEEP DOING
WHAT WE CAN BUT I DO THINK
IT'S- THAT THAT'S GOING TO BE
THE- I THINK WE WILL GET
THROUGH THIS PERIOD. MAYBE WITH
SOME STARTS AND STOPS WITH
REASONABLE GROWTH BUT-
ULTIMATELY WE'RE LOOKING AT A
LONG TAIL OF PROBABLY A COUPLE
OF YEARS AT LEAST OF PEOPLE.
RELATIVELY HIGH EMPLOYMENT AS
PEOPLE WHO. WORK IN THOSE
INDUSTRIES WILL STRUGGLE TO
FIND WORK AND AGAIN. WE NEED TO
SUPPORT THEM. YEAH SO CAN VERY
DIFFERENT STRUCTURE. AS YOU
DESCRIBED HERE AT SO IN THAT
CONTEXT. DO YOU SEE I ENROLL
FOR THE FAT IN TERMS OF SOME OF
THOSE FINANCIAL INSTITUTIONS
THAT REALLY DO COMMUNITY
DEVELOPMENT. YOU KNOW WE'RE
WE'RE VERY HIGHLY ENGAGED WITH
THE WITH THE CDFI SECURITY
DEVELOPMENT FINANCIAL
INSTITUTIONS- AND THOSE OF THEM
THAT ARE BANKS I CAN YOU KNOW
ARE TAKING PART IN OUR PROGRAMS
NOW THEY TOOK PART IN THE EPPP
LOOK FACILITY SO- BUT WE
STRONGLY SUPPORT THEM ENGAGE
WITH THEM AND THE SAME IS TRUE
OF EMPTY EYES. WE IT'S IT YOU
KNOW I THINK. THAT ISN'T WHERE
THE THAT ISN'T WHERE THE
LIQUIDITY SHORTAGES THAT ISN'T
WHERE THAT- THE BIG PROBLEMS IN
THE ECONOMY ARE REALLY IN THE
ACTUALLY IN THE- YOU KNOW THE
SERVICE SECTOR AND THE
MANUFACTURING SECTOR IT'S IN
THE REAL ECONOMY THIS TIME THE
LAST CRISIS IS REALLY AROUND
FINANCIAL SYSTEM. AND BIG
CREDIT LOSSES. HERE WE GOT
HIGHLY CAPITALIZED INSTITUTIONS
AND IN BOOK AND WE HAVE WE HAVE
CREDIT PROBLEMS IN THE REAL
ECONOMY. AND WE HAVE A YOU KNOW
WE HAVE A DIFFERENT SITUATION
SIDE. THANK YOU. SO WE ARE
ALMOST OUT OF TIME
UNFORTUNATELY AND- I THOUGHT
WHAT I WOULD DO FOR JUST OUR
LAST A MINUTE OR TWO. WAS TO
CYCLE BACK TO THE REVIEW THIS
VERY PUBLIC REVIEW OF THE
MONETARY POLICY FRAMEWORK IN
AND ASKED IF YOU HAD ANY. DIFF
ADDITIONAL BOX OR PERHAPS THAT
THE NEXT STEPS THAT YOU EXPECT
THE FED TO TAKE IN TERMS OF.
MOVING FORWARD WITH THAT THE
CHANGES THAT YOU DESCRIBE FOR
US. WELL FIRST OF ALL I'M I'M-
VERY PLEASED WITH HOW THIS
WORKED OUT AGAIN I THINK IT'S A
PRODUCTIVE BUSINESS STANDPOINT
OF- OF JUST PUBLIC ENGAGEMENT
AND THAT'S THAT'S THAT'S ALWAYS
A GOOD THING FOR
INSTITUTIONALIZED THE FED
PARTICULARLY THE FED. WHICH HAS
THIS PRECIOUS DEGREE OF
INDEPENDENCE AND I THINK THAT
PUTS A BURDEN ON US TO SEEK
ACCOUNTABILITY NOT JUST GO
THROUGH THE MOTIONS BUT REALLY
ACTIVELY IN AGE AND EXPLAIN
OURSELVES AS CLEARLY AS
POSSIBLE TO THE PUBLIC AND THE
PUBLIC SELECTED REPRESENTATIVES
SO I THINK THE REVIEWS HELP ON
THAT. I THINK- IN THAT SENSE
IT'S BEEN A SUCCESS I THINK
REALLY- THE CHANGES TO OUR
FRAMEWORK TIME IS GOING TO TELL
AND WHAT WE DO GOING FORWARD IS
REALLY GOING TO DECIDE THE
EFFECTIVENESS OF THE CHANGES
WE'VE MADE. I'M I'M I THINK
IT'S A VERY PROMISING SET OF
CHANGES TO DEAL WITH WHAT IS A
REALITY OF A QUITE DIFFICULT.
MACROECONOMIC CONTEXT OF LOW
INTEREST RATES LOW INFLATION
RELATIVELY LOW PRODUCTIVITY
SLOW GROWTH IN THOSE KINDS OF
THINGS IN A FLAT PHILLIPS CURVE
YOU YOU HAVE TO PUT ALL THAT
TOGETHER AND SEE THAT YOU KNOW
YOU WE'VE REALLY GOT TO WORK TO
FIND EVERY. EVERY FIGHT EVERY
SCRAP OF LEVERAGE AT IN IN
HELPING STABILIZE THE ECONOMY
WHICH IS OUR ROLE SO TIME WILL.
TELL INTERACTION BOLTON ONLY
TELL BUT I'M VERY PLEASED WITH
YOU AND SO GRATEFUL TO BE PART
OF SUCH A GREAT ORGANIZATION
WHERE YOU REALLY USED EVERY
PART OF THE ORGANIZATION TO
ADVANCE THIS. THIS PROJECT AND
I'M I'M. REALLY PROUD TO BE TO
BE PART OF THIS. THANK YOU VERY
MUCH CHAIR PAL OF IS REALLY A
PLEASURE BOTH TO SPEAK WITH YOU
THIS FROM. WELL THIS MORNING
HERE. BUT I'D LIKE TO
CONGRATULATE YOU AND THE
SELLERS THIRTEEN AWFUL AND
PUBLIC AND WE ENGAGED REVIEW OF
THE MONETARY POLICY STRATEGY SO
THANK YOU VERY MUCH. THAT MUCH
IS IN IT IS IT WORTH IT TO SEE
YOU AS WELL. AND NOW WILL SHIFT
TO THE SECOND SESSION IN
TODAY'S AGENDA WHICH WILL FOCUS
ON THE TREND DECLINE IN GROWTH.
AND THE PAPER FOR THIS SECTION
WILL BE PRESENTED BY THE AUTHOR
TWO FEET APPRECIATE FROM ON THE
UNIVERSITY OF CHICAGO. SO THANK
YOU VERY FOR THIS CONTRADICTION
TODAY I'LL BE TALKING ABOUT THE
PRODUCTIVITY SLOWDOWN AND THE
DECLINING BUSINESS DYNAMISM IN
THE US AND AROUND THE WORLD AND
THIS IS JOINS WORK IT'S. YOU
NOT THIS FROM FEDERAL RESERVE
BOARD. AS ALL. ARE FAMILIAR
WITH. THEIR PRODUCTIVITY- DOWN
IN THE US OVER THE PAST SEVERAL
DECADES AND IT IS IMPORTANT. TO
UNDERSTAND THE UNDERLYING
MECHANISMS NOT TO COME UP WITH
THE RIGHT POLICY
RECOMMENDATIONS. SO WHAT WE
TRIED TO DO IN THIS PAPER
BACKGROUND PAPER IS. TO PUT
TOGETHER SEVERAL OTHER TRANS AT
THE MICRO LEVEL THAT CAN SHED
LIGHT ON THE MACRO PRODUCTIVITY
SLOWDOWN IN THE US. AND MORE
SPECIFICALLY THE QUESTION THAT
YOU'RE ASKING HIS WIFE THEIR
PRODUCTIVITY GROWTH SLOWDOWN
AND DECLINING BUSINESS
DYNAMISM. AND IN ORDER TO
ANSWER THIS QUESTION WHAT WE
TRY TO DO IS BE BOUNCED BACK TO
THE FARM LEVEL DATA AND
INDIVIDUAL LEVEL DATA AND TRY
TO UNDERSTAND WHAT'S HAPPENING
AT THE MICRO LEVEL. BECAUSE AT
THE END OF THE DAY AND MACRO
ECONOMY COST OF MANY MANY MICRO
AGENTS AND TRUMP THE FIRMS. AND
INDIVIDUALS. SO WHAT YOU
OBSERVE IN THE DAY. ON THE
FOLLOWING. TRENDS NUMBER ONE
MARKET CONCENTRATION HAS BEEN
INCREASED. MEANING THAT SECTORS
ARE DOMINATED ARE BEING
DOMINATED MORE AND MORE BY
SEVERAL MARKET LEADERS. AND
THESE MARKET LEADERS ARE
CHARGING HIGHER MARKUPS OVER
TIME. AND AS A RESULT THEY ARE
INCREASING THEIR PROFITS. AND
THEN LOOK AT THE ISSUE OF
PROFITS- OKAY DID THE PROPHET
GDP THAT'S BEEN INCREASING OVER
TIME. AND ON THE FLIP SIDE THE
LABOR SHARE MEANING THAT THE
INCOME THAT GOES TO LABOR AS A
FRACTION OF GDP HAS BEEN
DECREASING OVER THE PAST
SEVERAL DECADES. AND MEETING
HERE IS THAT NOT A GOOD LOOK AT
THE MARKET CONCENTRATION AND
LABOR SHARE THEIR NEGATIVELY
ASSOCIATE MEANING THAT MORE
CONCENTRATED MARKETS FUTURE
LOWER INCOME FOR WORKERS. AND.
AND OTHER IMPORTANT THE FACT IN
THE DATA. IS WE LOOK AT THE
PRODUCT YOU GOT MARK LEADERS
AND FOLLOW. THE PRODUCTIVITY
GAP IS INCREASING NORMALLY IN A
COMPETITIVE MARKET WE WOULD
EXPECT THAT THE PRODUCTIVITY
WOULD BE FOR BOTH MARKET
LEADERS AND FOLLOWERS AND THERE
WOULD BE CHINA OR AT THE AT THE
FRONT HERE. UNFORTUNATELY
MARKET LEADERS PRODUCTIVITY HAS
BEEN INCREASING FINE BUT THE
FOLLOWERS HAVE NOT HAVE NOT
BEEN ABLE TO KEEP UP WITH THE
MARKET LEADERS AS A RESULT THE
PRODUCTIVITY GAP HAS BEEN
INCREASING. AND THE FACT THAT
MARKET LEADERS HAVE BEEN
DOMINATING MORE AND MORE THE
MARKETS THIS DISCOURAGED NEW
FARMS AND AS A RESULT FOR ENTRY
HAS BEEN DECLINING. AND TO
SHARE OVER YOUNG ARMS AND
ECONOMIC ACTIVITY BY THE YOUNG
ARMS HAVE BEEN DECLINING DURING
THAT TIME. AND THEN THERE'S
LESS ENTRY OBVIOUSLY JOB
RELOCATION RATE FROM LESS
PRODUCTIVE IN COMMENTS TO MORE
PRODUCTIVE ENTRANCE HAS BEEN.
ALSO DECLINING DURING THAT TIME.
ANOTHER IMPORTANT FACTOR DATA.
IS THAT NONE LOOK AT THE RATE.
OF YOU TOO YEAR GROWTH RATE
DISTRIBUTIONAL FARMS. THE
DISPERSION OF THE GROWTH RATE
IS DIVISION INFORMATIVE BECAUSE
IT TELLS US HOW MUCH FIRMS ARE
EXPERIMENTING WITH NEW
TECHNOLOGIES. IF A PART IS
COMING UP WITH RADICAL
TECHNOLOGY THAT FIRM BILL GOAL
THEY'RE RAPIDLY IF THEY'LL
STEAL JOBS FROM OTHER
UNPRODUCTIVE FINDS. AND ON THE
FLIPSIDE IS UNPRODUCTIVE FARM
WILL BE SHRINKING SO IS THERE'S
NOT THE DISPERSION IN THE
GROWTH RATE DISTRIBUTIONAL
FUNDS. HOUSE US THAT IT'S A
DYNAMIC ECONOMY GET A LOT OF
EXPERIMENTATION. UNFORTUNATELY
IN THE DATE OF THE ORDER THAT
THE GROWTH RATE DISTRIBUTION
HAS BEEN SHRINKING OVER TIME
WHICH MEANS THAT THERE'S LESS
EXPERIMENTATION WITH NEW
TECHNOLOGIES. AND AS A RESULT
AFTER THESE MICROBES ARE
VISIONS AT THE MACRO LEVEL THE-
SERVER PRODUCTIVITY WILL SLOW
DOWN. AND OTHERS SHOULD BE ALSO
STATE THE- DECLINE IN THE REAL
RACE REAL INTEREST RATE DURING
THAT TIME. SO ARE ALL THESE
EMPIRICAL FACTS RELATED.
JOHNSON IS QUESTIONS HE BUILT A
GENDER EQUILIBRIUM THEORY THAT
THE GLASS THE NORTH'S ECONOMY
AND HE TRIED TO ASK IF ALL
THESE FACTS CAN BE RATIONALIZED
SIMULTANEOUSLY IN A
MACROECONOMIC FRAMEWORK. AND
THE ADVANTAGE OF THIS IS THAT
ONCE YOU HAVE THIS
MACROECONOMIC FRAMEWORK YOU CAN
DO A POTENTIAL HOLDS HORSE RACE
BETWEEN ALTERNATIVES SCENARIOS.
AND YOU CAN ASK WHAT MIGHT HAD
LEADS TO ALL THESE CULTURE
TRENDS IN THE DATA. AND INDEED
BE TRIED TO ENTERTAIN SEVERAL
ALTERNATIVE HYPOTHESES FOR
INSTANCE. A LOWER EFFECTIVE
CORPORATE TAX RATE DURING THAT
TIME FOR INCUMBENTS. SECOND AT
HIGHER R&D SUBSIDY THREE
COMMENTS DURING THAT PERIOD. OR
AN INCREASE IN ENTRY COST ENTRY
BARRIERS. ANOTHER POTENTIAL
EXPLANATION THAT THE AMOUNT
THAT IS THAT MAYBE YOU TO SOME
OTHER REASON THERE HAVE BEEN A
DECLINE IN INTEREST RATES THANK
YOU TO END THIS CONFLICT OF THE
HOUSEHOLD. ANOTHER. POTENTIAL
EXPLANATION MAS IDEA HAS BECOME
HARD SO IS A RESULT THE KNOW
WHAT INITIAL THE FARMS
DECLINING. AND I BEHIND. DID BE
A- BECAUSE BICKER UNION DURING
THAT TIME. ON FOR NOT THESE
MAKE. COULD SPEAK TO ALL THE
ELEVEN SIMULTANE. EXCEPT ONE
FOR. AND THAT FACT THE LOWER
DIFFUSION MEANING THE- BOND
MARKET LEADER COMES UP WITH NEW
TO. B. C. LEFT. AND THE
DIVISION OF TECHNOLOGY TO
MARKET FOLLOWERS. IT'S NOT ONLY
IMPORTANT. TO COME UP WITH NEW
TECH BUT USING TAKE. ALSO MAKE
THE ENTIRE ECONOMY MORE
PRODUCTIVE ALTHOUGH CAN YOU SEE
THIS NOT ONLY DISTRIBUTION
DECLINE OVER TIME AND THIS IS
THIS CAN ALSO BE INTERPRETED AS
EVEN IF THE MARKET FOLLOWERS
ARE LEARNING ABOUT THESE
TECHNOLOGIES THEY ARE NOT ABLE
TO IMPLEMENT THESE TECHNOLOGIES
DUE TO VARIOUS REASONS. AND THE
QUESTION IS WHY IS LAW AND
WHITE WINE IS KNOWLEDGE
DIFFUSION. DECLINING OVER TIME.
SO IN ORDER TO ANSWER THIS
QUESTION I'M GOING TO GO BACK
TO THE DATA. AND I'M GOING TO
LOOK AT SOME OTHER. NEW TRENDS
THE THAT THAT BC. ONE LOOK AT
HAPPENING ON THE FARMS THE
PATENTING. BY THE LARGEST 1% OF
THE FIRMS HAVE BEEN. INCREASING
AROUND EIGHTY THIRTY PERSON OF
THE PATENTS WERE PRODUCED BY
THE LARGEST. 1% OF DIFFERENCE
TODAY THIS NUMBER MARKUP FIFTY
PER. THEN WE LOOK AT THE
SHERATON MANAGERS WORKING FOR
YOUNG ARMS AROUND YOUR TWO
THOUSAND THIS NUMBER WAS ABOUT
50% NOW LESS THAN 8% OF
INVENTORS ARE WORKING FOR YOUNG
STARTUPS. AND THAT DECLINE
COULD BE A PRODUCTIVE
RELOCATION OR IT COULD BE VERY.
NOT ON THERE IN ORDER TO ANSWER
THIS QUESTION WHETHER THIS IS
PRODUCTIVE OR NOT. LET ME SHOW
YOU TWO ADDITIONAL FACTS. THE
FACT ON THE LEFT IS SHOWING
THAT MANY INVENTOR MOVES FROM A
SMALL FIRM TO A LARGE INCUMBENT
DO YOU KNOW WHAT INITIAL DOES
IT INVENTOR IS DECLINING THEY
ARE PRODUCING THAT. THE PATENT
AND THERE ARE PLENTY OF
PATENTS. HOWEVER ONE OF THE
COMPANY'S COMPENSATION OF THIS
IN MATTER MEANING THE SALARY OF
THIS ENCOUNTER. THE SALARY IS
INCREASING AFTER THE MOVE FROM
SMALL FARMS LARGE INCOME. THIS
MEANS THAT THE PRIVATE
COMPENSATION OF THE MATTER IS
GOING UP BUT SOCIALLY THIS IN
MATTER IS PRODUCING LESS
IMPORTANT PATENTS FOR THE
SOCIETY SO AS A RESULT THIS
MOVE FROM. IT IS SMALL FROM TWO
LARGE FIRM OR THIS REALLOCATION
IS SOMETHING THAT YOU SHOULD
KEEP AN EYE ON THE- IN TERMS.
OF THE VOLUME OF THE SOCIETY.
SO LET ME SUM THESE ADDITIONAL
FACTS THAT ARE HINTING AT WIDER
MIGHT BE LOWERED DECISION FROM
INCOMPETENCE FROM MARKETERS TO
FOLLOWERS FIRST. MORE AND MORE
PATENTS ARE PRODUCED BY THE TOP
1% AND MORE PATENTS ARE BEING
BE ASSIGNED OR SOLD TO TOP 1%
OF THE FARMS. AND MOST OF THE
TIME THESE PATENTS ARE USED AS
SLEEPING PATTERNS AND THEY ARE
NOT BEING USED THEY ARE NOT
THINKING ABOUT THAT THEY ARE
JUST BEING BOTH FOR STRATEGIC
REASONS BY THE- MARKET LEADERS.
AND OTHER IMPORTANT FACTORS
THAT MARKET CONCENTRATION AND A
SHARE OF THE TO GET THE PATENTS
ARE POSTED THE ASSOCIATED
MARKET. THIS IS INCREASING
CONCENTRATION OF PATENT. ON THE
INVENTOR SIDE WE SEE THE
CLOSURE OF THE MONSTERS ARE
WORKING FOR YOUNG STARTUPS AND
YOU ALSO SEE THAT THE BANK HAD
AN INVENTOR IS MOVING FROM
SMALL FARMS A LARGE FIRM THE
SOUND OF THE MANAGER'S GOING UP
BUT THEY ARE BECOMING LESS
PRODUCTIVE. IN LARGE FIRMS.
STARDUST THAT ARE FUNDED BY NEW
INVENTORS ARE. ARE GENERATING
MORE EMPLOYMENT ON AVERAGE BUT
UNFORTUNATELY WE SEE THAT SPARK
OF THAT ARE BEING FUNDED BY
INVENTORS ARE ALSO DECLINING
OVER TIME. AND AS A RESULT
THERE'S A LOWER DENTURE
PROMOTION BY INVENTOR SINCE TWO
THOUSAND. AND IN ADDITION M.
AND A ACTIVITIES HAVE BEEN
INCREASING BUT THAT MANY
ACTIVITIES ARE NEGATIVELY
ASSOCIATED WITH BUSINESS
BYNUM'S MET THE SECTOR LEFT.
AND FINALLY THE LOBBYING
ACTIVITIES BY THE LARGEST
INCUMBENTS HAVE BEEN INCREASING
DRAMATICALLY DURING THAT TIME
WHICH IS ALSO SOMETHING THAT I
THINK YOU SHOULD KEEP AN EYE ON
IN TERMS OF UNDERSTANDING WHY
MARKET LEADERS ARE DOMINATING
THE MARKET AND WHY IS THERE
ORDINALS FUSION. FROM NEEDED
FIRST TEACHING FOLLOWERS. SO OF
COURSE THE STORIES I MEANT UP
UNTIL NOW WAS RELATED TO THE U.
S. BUT WE ALSO SEE A SIMILAR
CHINA AND SOME OTHER COUNTRIES
FOR INSTANCE FOR ITALY HE DID
AN INTERESTING EXERCISE. AND WE
SAW THAT IN D. VAN MARKETS
VETERANS ARE GAINING SOME
ADDITIONAL MARKET AND AS THEY
ARE BECOMING THE DOMINANT
MARKET EITHER THERE
INNOVATIVENESS IS DECREASING.
BUT THEY ARE GETTING MORE
CONNECTED TO THE POLITICAL
SYSTEM BY HIDING MORE
POLITICIANS. SO HIRING LOCAL
POLITICIANS IS ALLOWED BECAUSE
BEING A LOCAL POLITICIANS A
PART TIME JOB SO THEY CAN WORK
FOR A COMPANY SO WHAT WE SEE IN
THE DATA IS THAT MARKETERS ARE
THE ONES THAT ARE HIGHER THAN
MOST OF THE- POLITICIANS LOCAL
POLITICIANS. AND IN ADDITION
THEY ARE PRODUCING LESS PATENTS
RELATIVE TO THEIR SIZE SO THIS
IS ALSO TELLING US THAT THERE'S
SOME STRATEGIC AT BEHAVIOR BY
MARKET LEADERS AS THEY ARE
BECOMING THE MARKET LEADER. HE
ALSO DID SOME ANALYSIS FOR THE
DEVELOPING ECONOMIES ARE IN
ORDER TO UNDERSTAND WHY
BUSINESS FINDINGS MIGHT BE
GOING DOWN IN DEVELOPING
ECONOMIES. AND OF COURSE THERE
THERE'S NOT A ONE SIZE FITS ALL
THE RECOMMENDATION FOR ALL
COUNTRIES ESPECIALLY IN
DEVELOPING ECONOMIES THE
CONCERNS ARE DIFFERENT.
INDICATORS OF TURKEY FOR
INSTANCE FARMS ARE SMALLER AND
THEY ARE MORE SENSITIVE TO DAY
AVAILABILITY OF CREDIT. AND IN
THE CASE OF TURKEY WE SEE THAT
THERE'S A DECLINE IN BUSINESS
FINANCING TARGETS IN TWENTY
THIRTEEN BUT THIS IS MOSTLY DUE
TO THE FACT THAT THERE'S
RELATIVELY LESS AVAILABLE A
CREDIT IN F. OR MARKET
FOLLOWERS. MARKET LEADERS
ACCESS TO FOREIGN MARKETS BUT
MARKET FORCES ARE NOT ABLE TO
ACCESS FOREIGN MARKETS SO AS A
RESULT THE LACK OF CREDIT IS
SLOWING DOWN COMPETITION AND AS
A RESULT RIVALS ARE NOT ABLE TO
KEEP UP WITH MARKETERS. AND
BUSINESS FINDS DECLINE. SO IN
ORDER TO WILL SO MAJOR CONCLUDE
THIS. SO WHAT TRYING TO DO THIS
BACK. SPLIT IS ON. THE REASONS
THE- SLOWDOWN THE US AND VERY
COMP. IN THE CASE OF US BEEF
THAT NO. FUSION OR
IMPLEMENTATION OF NEW
TECHNOLOGIES MY MARKET
FOLLOWERS HAVE BEEN DECLINING
OVER TIME. AND THE DATA SHOWS
THAT THERE'S A MASSIVE
CONCENTRATION OF IDEAS
INVENTORS AND MATURE FIRMS. AND
THESE ARE GIVES INVENTORS ARE
ARE POTENTIALLY BEING USED FOR
STRATEGIC REASONS. AND IN ORDER
TO- ENERGY IMPROVEMENTS
FOLLOWERS FROM USING THOSE
IDEAS OR OR PRODUCING NEW IDEAS
AS A RESULT COMPETITION IS
DECLINING. AND PRODUCTIVITY.
GROWTH IS SLOWING DOWN. SO WHAT
ARE THE POLL IN IN TO GET OF
THESE FINDINGS. CLEARLY THE
NEED TO INTENSIFY THE
COMPETITION AT THE FRONT YOUR
MARKET LEADERS SHOULD BE
CHALLENGED. SO ONE THING WHAT.
WE CAN DO IS WE SHOULD BE
CONSIDERED THE POLICIES THAT
ARE CLEARING MARKET LEADERS FOR
INSTANCE THE- R&D TAX CREDIT IS
SOMETHING THAT IS BEING
UTILIZED MOSTLY BY MARKET IT IS
BECAUSE YOU NEED TO HAVE AN
ARMY OF LAWYERS DO NOT UTILIZE
THE POLICIES. AND THE FOLLOWERS
ARE NOT UTILIZING THESE TYPE OF
POLICIES AND THIS MIGHT BE
PREVENTING EFFECTIVE
COMPETITION AT THE FRONT HERE.
SECOND ENFORCEMENT OF ANTITRUST
POLICIES IS CRUCIAL. THIS IS
GOING TO ENSURE THAT THE
COMPETITION AT THE TOP IS NOT
BEING AFFECTED BY THE MASSIVE
CONCENTRATION AND STRATEGIC USE
OF PATENTS BY MARKET LEADERS.
ANOTHER IMPORTANT POLICY
RECOMMENDATION WE THINK IS THAT
THEY THEY'RE ADVERTISEMENT OR
OR MAKING THE SECONDARY MARKET
FOR TECHNOLOGIES MORE
EFFECTIVELY UTILIZED BILL LET
THE KNOWLEDGE YOU FUSE MORE AND
TECHNOLOGIES BECAUSE MORE INTO
SOCIETY. AND I'M FINALLY LANDED
THE LOCAL COMPETITION IS
DECLINING IN THE U. S. RELYING
ON FOREIGN COMPETITION IS AN
IMPORTANT WAY TO PROCEED. SO
THESE DAYS WE ARE AND WE ARE
TALKING ALSO ABOUT THE WEATHER.
AND THE BORDER SHOULD BE
CROSSED REFORM. AND FOR
PRODUCTS INDEED A FORM. OUR
JINPING TO YOUR MARKET LEADERS
THEIR- AND- A- FORMER. WOULD
ALSO BE AT DETRIMENTAL MOVE.
THAT DOES IT REDUCE THE
BUSINESS DYNAMISM AND.
COMPETITION IN THE UNITED
STATES. THANK YOU FOR MUCH.
THANK YOU VERY MUCH AFOOT THE
DISCUSSION FOR THIS SESSION
WILL BE BROWN UNIVERSITY
PROFESSOR COUNTY ENCRYPTION BUT
BEFORE I TURN THE VIRTUAL
PODIUM OVER TO HIM I WOULD LIKE
TO JUST BRIEFLY OUTLINED THE
PROCESS THAT WILL USE FOR THE
GENERAL DISCUSSION SO ABOUT
HALFWAY INTO THE DISCUSSION
REMARKS YOU'LL SEE THOSE OF YOU
WHO ARE PARTICIPATING. IN THE
CONFERENCE WILL SEE A PHONE
NUMBER IF YOU WOULD LIKE TO
MAKE A QUESTION TO ASK A
QUESTION PLEASE CALL THAT PHONE
NUMBER AND WE WILL SHOW UP AS
MANY OF THOSE AS POSSIBLE AND
I'LL ASK YOU TO HELP ME TO GET
IN AS MANY AS POSSIBLE BY
KEEPING YOUR QUESTIONS.
ASSISTANT AND WITH THAT WE TURN
THINGS OVER TO PROFESSOR
GRETCHEN. WELL THANK YOU FOR
THAT INTRODUCTION AND THANK YOU
FOR INVITING ME HERE SO THE
TITLE OF THE SESSION IS- WHY
HAST- THE TREND RATE OF GROWTH-
DECLINE. AND I GUESS THE ANSWER
BEING OFFERED TO US BY THE
AUTHOR HERE IS RIGHT IN THE
TITLE OF THE PAPER A SLOWING AT
THIS THIS THANK KNACKS. SO IF I
JUST TRIED TO SUMMARIZE THE
MAIN MATCHES I THINK AT WORK I
THINK YOU SHOULD TAKE OUT OF
THIS PAPER AND RELATED WORK IS
THAT OVER THE LAST FORTY YEARS
OR SO WE HAVE SEEN A MARKET
INCREASE IN. FIRM CONCENTRATION
AND MONOPOLY POWER IN OTHER
WORDS MORE AND MORE OF THE
SEALS IN ANY GIVEN INDUSTRY IS
BEING DONE BY. IF YOU. RELATED
WORK NOW SO THE IDEA IN THIS
PAPER IS THAT TOO TIGHT THIS
DEVELOPMENT TO SLOW DOWN AND-
THE TREND BROKE OFF THE ECONOMY
OUR PRODUCTIVITY GROWTH SO WHAT
IS. WHAT IS THE TRIGGER HERE SO
THERE THE THINKING IS THAT.
THIS ENTRY IN INNOVATION AND AN
OVERALL- DYNAMICS. IN THE
ECONOMY NOT SO WHAT'S THE
CHANNEL THE OSCARS ARE HERE
FOCUSING ON. SO THAT THE MAIN
DRIVING FORCE HERE. YES ARE IN-
WHAT THE AUTHORS CALL KNOWLEDGE
DIFFUSION OKAY SO THERE HAS
BEEN A DECLINE ACCORDING TO THE
AUTHORS IN KNOWLEDGE DIFFUSION
SO WHAT IS A DECLINE IN
NOVELIST FUTURE. SO LET ME ACT
FRAMING IN THE TERMS THE AUTHOR
ALTHOUGH I'M NOT GONNA TRY TO
WRITE OUT THEIR MODEL HERE IN.
TEN MINUTES I HAVE BEEN GIVEN
SO HERE YOU SEE IN THERE ACT
DOC THIS IS A LEADER. THREE
OKAY IN THAT BLUE DOT WOULD BE
THE- IN THAT INDUSTRY AT NOW IN
THE MODEL THAT THE OFFICE
CHRISTIE CONSTRUCT THERE'S A
PROBABILITY DEALT THAT- IN THE
TWO NEVER APPEARED THAT
FOLLOWER CATCHES UP. TWO LEADER
AND MANAGE TO PRODUCE ACT THIS
SAME COST STRUCTURE RIGHT AND
THE IDEA AND HELP WITH THIS THE
FOLLOWER CATCHER WELL BUT I ACT
NOT BY ACCUMULATING THE
KNOWLEDGE AND KNOW HOW AND HOW
TO PRODUCE. AT THE SAME LEVEL
HAS TO BE EITHER IN THAT
INDUSTRY SO THE IDEA HERE IS
THAT THIS. THAT THIS. DIFFUSION
OF KNOWLEDGE HAS TO. OVER TIME
OKAY A REDUCTION IN IN THIS
DELTA OKAY AND NOW THIS
REDUCTION IN DELTA THE AUTHOR-
SHOW LEADS TO INCREASE IN
CONCENTRATION IN MARKUP IN THE
PRICES DIFFER IN CHARGE.
RELATIVE TO THEIR MARGINAL COST
WHICH IN TURN TRIGGER A
REDUCTION IN EXPERIMENT
EXPERIMENTATION- BY THE HEATER
AND REDUCTION IN THE ENTRY OF A
NEWCOMER STUDY STUFF HI. I'M
SURE ENTERING THE INDUSTRY IN
OTHER WORDS THE LEADER HAS
TAKEN OFF- FAR ENOUGH SO THAT
THERE'S LITTLE HOPE FOR THOSE
BEHIND TO CATCH UP. NOW SO WHAT
IS THE EVIDENCE THE OFFER
PROVIDES. FOR REDUCTION IN
ANOMALOUS DIFFUSION. THE
EVIDENCE THE MOST MOSTLY FOCUS
ON IS- PATENT. PRODUCTION OR
THE NATURE OF PATENTS AND THE
SHOW RATHER STRIKING EVIDENCE
THAT- IF YOU TAKE THE TOP- 1%
FIRMS- JUST THE TOP 1%
ANNOUNCED NET INCOME IS THE
FIRM'S. ACCUMULATING MORE AND
MORE AND THEN THEY SHOW-
CORRELATION PEAKING THE
CONFLATION OF PATENTS. AT LEAST
RECORD ISN'T- TURN CORRELATED
TO MORE LITIGATION AND THIS IN
TURN IS CORRELATED TO HIGHER
MARKED. UP SO THIS IS ONE
INTERESTING FEATURE ANOTHER
INTERESTING FEATURE OF THE DAY
THAT THE DOCUMENT IS THERE SOME
CLIMB IN THE SHARE OF PATENTS
ISSUED. BY NEW FORMS. FINALLY
THEY DIDN'T THE NAME OF PATENTS
THE NAME OF THIS SEEMS TO BE. A
LITTLE BIT OF TIME THE TICKET.
THE HAVEN'T SEEN TO BE LESS A
ROCK THEY BIG IDEA AND ONE NEW
WHICH THEY THEN APPROACH WITH
LONG TO RACE OF THESE. SO THE
PATENTS CONCERNED WITH LITTLE
INCREMENTAL THINGS AND YOU KNOW
CITING AN AND ONE RESTAURANT
THAT IS THAT THIS ITEM SOLD A
LOT. IN THE PATENT AND SO BE
ARGUED IS THE AT THE STOP. IN
TWO MORE B. TWO R. YOU KNOW.
TRY TO PREVENT COMPETITORS TO
CATCHING UP RATHER THAN
DEVELOPING NEW IDEAS AND
FINALLY THERE'S AN INTERESTING-
DATA OUT THERE THAT SUGGESTS
THAT. OUR MORE ON. HIRING THE
TALENTI WOULD THE INVENTORS NOT
ONLY THAT NOT ONLY ARE THEY
HIRING UP THE INVENTORS WHEN
THE VENDOR SHOW SHOT EVEN IF
HE'S ACTUALLY GETTING HER WAY
TO THE SCENE TO STOP RENTING I
KNOW THE WORST THEIR
PRODUCTIVITY DECLINES SHORTLY
OVER OVERALL PICTURE THE TEAM
TO A MAN MARCH HERE IS ONE OF
SORT OF A BIG LACY. BACK FIRM
CHARGING HARD HI MARK UPS AND
NOT DOING A WHOLE. LOT WITH IT
IN TERMS OF INNOVATION AND THIS
IS THAT. ARE SUPPRESSING HOUSE
SUPPRESSING. A GROWTH AND
OVERALL DYNAMISM IN THE ECONOMY
SO IT'S A RATHER- YES IT'S A
IT'S AN OUTLOOK NOT LET'S SAY
FAVORABLE TO THE BIG FIRM SEN.
AND THE ECONOMY NOW SO. IF I
JUST SORT OF MOVED BACK TO THE
BIG PICTURE WHICH I HOPE LEAVE
YOU WITH THIS THAT WHICH I
THINK IS RELATIVELY ROBUST-
BECAUSE HE'S DESCRIBE RIGHT BY
BIG NUMBER OF STUDIES IN THIS
FOLK PAPERS SORT OF I THINKING.
IN ON IS THAT DOES SEEM TO BE A
PRICE IN THE MARKUP- MARKET
POWER IN THE U. S. AND THAT'S
CONSISTENT WITH THE LARGE
COMPLEMENTARY RICHER. AND IT
TURNS OUT THAT THIS COUPLED
WITH A REDUCTION IN REAL
INTEREST RATE THAT WE'RE GOING
TO HEAR MORE ABOUT. AT TODAY
YOU REALLY. NEEDED TO HELP
RATIONALIZE A LARGE NUMBER. OF
PHENOMENA WE SEE. I WAS. WOULD
ASK POSTED FOR EXAMPLE IT'S
VERY DIFFICULT TO RATION. WHY
IN THAT HAS INCREASE. AT THE
SAME TIME AS THE INTEREST RATES
ARE AT. HISTORIC LOWS SIMILARLY
IT'S HARD TO UNDERSTAND WHY
WELLS TO HELP MAKE NATIONAL
DIDN'T THAT HE NOT VALLEY THE
STOCK MARKET GOLD MARKET WEALTH
HAS INCREASED A LOT. WELL THE
CAPITAL STOCK SEEMS TO BE A
STAGNANT WITHOUT RESORTING TO
THERE IS AN INCREASING MARKET
POWER. AT AND THEY THIS IS
JUST- SUGGESTING THAT OR
REMINDS OF THAT JUST BECAUSE
THE STOCK MARKET GOES UP THAT
DOES NOT NECESSARILY NEED TO BE
GOOD FOR ALL PRO. BECAUSE IT
COULD BE REFLECTING JUST AN
INCREASE IN RATS. IN MARKUPS
THAT I'M NOT NECESSARILY
CONTRIBUTING TO OVERALL WELFARE
SO I THINK THAT THIS. PAPER IS
SPEAKING TO THE GENERAL
QUESTION REMEMBER NOW WHAT WAS
THE ORIGINAL QUESTION WHY HAS
TRUMP RATE OF GROWTH. DECLINE
IN A WAY AND I DON'T WANT TO
DIMINISH WHAT. THE PAPERS DOING
IN THAT SOME RESPECT IT'S JUST-
PUSHING BACK THAT QUESTION TOO
WHY HAS THE TRANSMISSION OF
KNOWLEDGE SLOW. OKAY AND ONE
ASPECT HERE IS THAT I DON'T
THINK THE PAPER IT. IS PUSHING
TOO FAR YET ALWAYS POINTING US
PERHAPS IN WHERE WE SHOULD BE
LOOKING TO THE FOR THE ASKED
THAT QUESTION IS WHY. HAS THE
TRANSMISSION OF KNOWLEDGE SLOW
NO ONE HANDED THE AUTHORS GIVE
US IN THIS PAPER IS PERHAPS
THERE SO WE- DUCTION IN ANTI.
TRUST AND I'M A LITTLE BIT. AT
ONE OF THE REASONS I'M A LITTLE
BIT SKEPTIC IS THAT WHILE TRUE
THAT. AFTER PRESIDENT FORTIN
HAS DECLINED SINCE THE NINETEEN
SEVENTIES- THE MARKUP SEEMS TO
HAVE PULLED THE USAGE. SO YOU
WOULD NEED THEM THE ARGUMENT
THAT YOU KNOW THEY WOULD
GRADUALLY INCREASING AND A
PERSONAL MENTALLY PEAK IN THE
EIGHTIES AND THEN DECLINE. I
THINK IT'S MORE DIFFICULT TO
FORMULATE THAT ARGUMENT ALSO
I'LL BE CURIOUS IF YOU COULD
MAKE THAT SORT OF YOU SHAPE
ARGUMENT- FOR OUT THE PATENTS
IN THE DATA BECAUSE THE AUTHORS
ONLY DISCUSSING NINETEEN EIGHTY
TWO COURT DATES OF QUESTIONS.
BEFORE THAT CAN YOU EXPLAIN THE
OCEAN AND THEY ARE I'M A LITTLE
BIT. MORE SKIP. I THINK THAT IS
TO BE SEEN. NOW SUPPORT WHAT
COULD BE THE CANDIDATE REMEMBER
WE'RE LOOKING FOR SOMETHING YOU
SHAPED OR- INVERSE YOU WHAT
HARM. IS THERE SOMETHING LIKE
THAT AND DATA AND HERE I JUST
HAVE A COUPLE OF I SUSPICIONS-
OFF OF SUSPECTS. SO ONE OF THE
THINGS THAT HAS BEEN VERY
FRUITFUL IN TRYING TO
UNDERSTAND THE FALL IN THE BILL
INTEREST RATES. IS DEMOGRAPHICS
SO ONE QUESTION IS CAN BE
TRYING TO LINK DEMOGRAPHICS TO
ALSO- THE FALL IN DYNAMISM AND
THE PRICE IN MARKETS AND I
SUSPECT THE ISSUE THERE MIGHT.
YES SO LET ME FIRST JUST-
REMIND YOU OFF- SO WE'RE
LOOKING FOR MORE OF A UNIFYING
EXPLANATION OF EXPLAIN THE
FALLING INTEREST RATES. AND
SINGLE PAINLESSLY PERHAPS- THE
PRICING MARCH MARKUP. SO ONE OF
THE THINGS THAT WE SEE NOW IN
THE RECENT YEARS. IS THAT- THE
POPULATION IS MOVING HELLO
REPLACEMENT IN OTHER WORDS. IN
FUTURE HERE WE SHOULD START
EXPECTING THAT WILL POPULATION.
TO START SHRINKING OKAY AND-
DEMOGRAPHERS HAVE- TOLD US THAT
THAT TIME AT LEAST THAT'S GONNA
HAPPEN IS ALREADY HAPPENED THE
DUST LESS WILL. THAT KIND OF
PEACE THAT WE HAVE IN THE WORLD
IS ACTUALLY CLOSER THAN YOU
THINK. SO HERE'S HERE THIS IS A
FIGURE FROM ATTACHMENT JUST
SHOWING THAT FERTILITY RATES
AND HOW THE DECLINE ACROSS THE
WORLD AND AS YOU CAN SEE IN
THAT AND THE TITLE OF THIS
PAPER. HE IS SUGGESTING THAT
PERHAPS THIS MAY MEAN THE END
OF ECONOMIC GROWTH THIS IS NOT
A HANDSHAKE IF YOU WANT TO HUNT
CHIP THOUGH. TAKE A LOOK AT.
THE EVOLUTION OF THE LABOR
FORCE IN. THE BLUE LINE IN THE
US OVER THIS TIME PERIOD. AND
IN PARTICULAR THE CIVILIAN
LABOR FORCE WHICH INCLUDES THE
INCREASE IN PARTICIPATION. OF
WOMEN AND YOU SEE THAT IT PEAKS
IN NINETEEN NINETY AND THEN IT
GOES DOWN. SO MAYBE THERE'S A
HINT THERE THAT AT DEMOGRAPHICS
MAY BE PLAYING A ROLE THE
MECHANISM COULD BE THAT YOU
KNOW WHEN YOU HAVE OLD. ONE
MORE OLDER PEOPLE THEY'RE LESS
A LINK TO ADOPT NEW PRODUCTS
COULD BE. IN REDUCE THE IN SAN
TO IN. AND SIMILARLY THERE CAN
BE A SUCH A EFFECTIVE NEXT THAT
H. OF WORK FOR. AFTER THE FACT
ON IN THE BAY. THAT'S THE
SIMILAR CLEVER AT THE THERE'S
SOMETHING. NOW EMERGING THE
EXPO. THESE QUESTIONS SO BUT
I'M NOT A COUNCIL ME JUST
CONCLUDE. THERE IS INCREASING
EVIDENCE OF HIGHER
CONCENTRATION AND FINAL
DYNAMISM US INDUSTRIES. NO WELL
THAT'S GOOD FOR THE STOCK
MARKET THIS MAY REDUCE GROWTH
AND INNOVATION AND THE PAPER
HERE PROVIDES AN INTERESTING
MECHANISM THAT. THE ULTIMATE
QUESTION THOUGH IS. WHAT IS THE
POTENTIAL SOURCE FOR THIS
DEVELOPMENT. IS THAT THAT
PERSON MIGHT EVEN BE
DEMOGRAPHICS THAT'S AN OPEN
QUESTION I DON'T. THINK WE HAVE
AN ASPECT. THANK YOU. THANK YOU
VERY MUCH THERE ARE MANY
INTERESTING AND IMPORTANT ISSUE
ON THE TABLE AND WE DIDN'T HAVE
A NUMBER OF PEOPLE WHO WOULD
LIKE TO ASK A QUESTION. AND SO
IN A MOMENT WE WILL GO IN THIS
ORDER FIRST JOSE TO GREGORIO.
SECOND FLOOR ABOUT TRUMP.
THIRTY TURBA IGNAZIO VISCO AND
CHECK AND I RESENT HOWEVER LET
ME- WHILE WE'RE SETTING UP LET
ME TAKE THE PREROGATIVE OF THE
MODERATOR TO ASK THE FIRST
QUESTION- AND MISS WORK I THINK
REALLY CONVINCINGLY HIGHLIGHTS
THE KEY ROLE OF- KNOWLEDGE THAT
FUSION IN HELPING US TO
UNDERSTAND THE DECLINING
BUSINESS DYNAMISM AND SLOWER
GROWTH I'D LIKE TO ASK I'D LIKE
TO HEAR MORE ABOUT WHAT THE
IMPACT OF LOWER INTEREST RATES
IT'S IN THAT CONTEXT. IN
PARTICULAR TO THE EXTENT THAT
MARKET LEADERS ARE ABLE TO
RESPOND MORE AGGRESSIVELY THAT
COULD ACTUALLY CHANGE- PERHAPS-
EXACERBATE SOME OF THE DYNAMICS
THAT ARE DISCUSSED IN THE PAPER.
SO NOW LET US GO FIRST TO JOSE
TO GREGORIO TO ASK HIS QUESTION
WAS SET. CAN YOU HEAR ME. JOSE
GREGORIO. THANK OKAY. OKAY SO
PERHAPS I'LL COME OKAY PLEASE
YES WE CAN HEAR YOU PLEASE ASK
YOUR QUESTION. YES I'M HERE
HELLO. YES WE CAN HEAR YOU YES
PLEASE ASK YOUR QUESTION OKAY
YESTERDAY. HELLO. JOSE HE'S
YOUR QUESTION. OKAY THEN NEXT
TO LAURA BABCOCK TO ASK A
QUESTION. LAURA CAN YOU HEAR ME
AT. MARKUP AND PROFIT. MARKUP
AND PROFIT CERTAINLY SEEN AS
EVIDENCE OF MARKET POWER. BUT
THEY CAN ALSO BE SEEN AS
COMPENSATION FOR RISK. WITH
YOUR MARKUP THE LAST TWELVE
YEARS. THANK YOU VERY MUCH. YES
I CAN HEAR YOU CAN YOU HEAR ME.
YES I CAN HEAR YOU PLEASE. OKAY
THE PROPERTY USUALLY SEEN AS
EVIDENCE OF MARKET POWER BUT
THEY CAN ALSO BE COMPENSATION.
AS OVER HERE MORE ABOUT- THE
LAST TWELVE YEARS HAVE BEEN AN
ENVIRONMENT WITH VERY HIGH
PERCEIVED RISK AND TO STARTING
A BUSINESS OR NEW PRODUCTS
PRODUCT LINE I'LL WANT
COMPENSATION FOR THIS RISK IN
PROFITS. AND THAT REP MIGHT
DETER PRODUCTIVE NEW
INVESTMENTS AND DECREASE
MEASURED PRODUCTIVITY- IT MIGHT
ALSO NOT DETER UNPRODUCTIVE ON
INCUMBENTS ARE LEADING TO
DISPERSE. SO WHAT FACTORS LEAD
US TO BELIEVE THAT HI RETURNS
REFLECT TECHNOLOGY DIFFUSION
AND NOT RISK OR ARE THESE
COMPLEMENTARY. THANK YOU. RIGHT
THANK YOU VERY MUCH OUR NEXT WE
WILL GO TO BUTTER. JAM. JAMES
WHO ARE YES I CAN THANK YOU TO
THE HOOK I WANTED TO PURSUE THE
VERY INTERESTING FACT YOU
REPORT ON THE COMPENSATION OF
INVENTOR THEY MOVE FROM SMALL
START UP FOR. THE FIRM. WHEN
YOU SHOW THAT THEIR THEIR
PATENT GIMP THE DECLINE
AFTERWARDS BUT THEIR
COMPENSATION RISES IS THERE
ANYTHING IN THE DATA THE BUSES
DISTINGUISHED B. ARE THEY
BECOME LESS PRODUCTIVE
INVENTORS OR THEIR WORKERS BEEN
PUSHED OFF SOMEHOW. FROM THEY
BECOME MORE MANAGERIAL AND
THEY'VE TAKEN ON FOR EXAMPLE
THE ROLE OF MANAGING A LARGER
TEAM OF THE YOU KNOW THE BENCH
THE SENT WORK- INVESTORS. SO
THAT IN SOME SENSE THEY ARE
THEY'RE COMPARABLE NOT BECAUSE
THEY IN FACT HAVE A LARGER
SCOPE OF COMMAND AND- CONTROL
AT THE SAME TIME THEY'RE NOT
DOING AS MUCH OF THE PASSWORD
WHICH THEY WOULD HAVE DONE
BEFORE THAT WOULD SEEM TO. FIT
WITH THE FACT PATTERN- BUT IT
SEEMS TO HAVE A DIFFERENT
APPLICATION FOR HOW WE THINK
ABOUT WHAT THE WHAT. WE LEARNED
ABOUT THIS FOR THE INNOVATION
PROCESS. GREAT THANK YOU JIM.
WE'LL GO NEXT TO IGN ASIO DISCO.
YEAH THANK YOU VERY MUCH YES
YOU'LL. OPOKU GOODBYE THE
REMARKS APER U. OKLA HARDWOOD
FROM. I DO FOR TO THE. IF YOU
IGNORE YOUR IT NOTHING YOU CAN
HEAR ME YEAH. YES WE CAN HEAR
YOU THANK YOU. THANK YOU COULD
BE THE LEADING THING AND
PRESIDENT. YOUR MANY THE LAW
RATE TRUTH HE NEED ONLY THE
LOCK DECADE KATIE AND YOUR I
OPEN UP BOMB THE ONLY THING WHO
SEND THAT CONCERNED. A THAT'LL.
FIVE BUT IS THE ONLY A
DIFFICULT SIGNA. GOOD LUCK
KANABEC ECONOMIC. THREE SIX
THREE THE LOWEST RATES OF FOR
ANY CORY ON WHAT FILM ALL SEEM.
THE SMALL FIVE FOR IN THE
BOTTLE LET NOT MUCH AND THE
PRESS IN NEED TO MENTION LAW
USUAL OF THE FACTOR FOR THE
REDUCTION IMPROVED YOU GROW IN
THE STATE. BUT MY QUESTION IS
WHY THE THIRTY ALSO FROM THE
LAW OF KNOWLEDGE AND IF YOU
FEEL THE LOVE NOT. NO OF THE OF
THE MAIN OF KNOWLEDGE AS NEEDED
BY THE. EXISTING THE COMPANY
LIKE. THE LORD LEVEL APPROVE
SOLICITOR RESULTS LOLA OF
KNOWLEDGE AND THEREFORE A
MESSAGE WILL BE INCREASE IT IF
YOU CORY NEED THAT INVESTMENT
WILL NOT I WOULD LIKE TO KNOW
WHAT YOU THINK OF THE THANK YOU
VERY MUCH. GREAT THANK YOU I
AND WE WILL TRY TO GET THREE
MORE QUESTIONS IN AND I ASK OUR
FOLKS THAT YOU COULD SPEAK THE
SAME IS POSSIBLE SO THAT WE
HAVE TIME THAT SO NEXT UP CHAD
CYBER. AND THEN WE WILL GO BE
TACKLED AND THEN THAT LUCAS SO
OKAY AT YOUR. THANK YOU VERY
MUCH EX MY QUESTION VERY MUCH
PERIL WERE JIM ABOUT. THAT
INTERESTING THE INVENTORS
MOVING FROM START UP DOING I'M
A COMPANY. I CAN UNDERSTAND WHY
THE INVENTOR ARE MOVING AND
GIVEN THE HIGHER. THE QUESTION
IS WHAT WHY ARE COME WILLING TO
PAY BUT SEEMS TO BE. RAN FOR
PRIOR IN ACT IF JUST TO PASS.
YOU BETTER BY THE PAD ALONE
HIGHER. TRUCKING AT THE- TO TRY
TO GET AT THE- BEHIND WHY THE
THINK ONE TO HIRE. ARE. HI YES
WE CAN HEAR YOU PLEASE ASK YOUR
QUESTION. THANK YOU THANKS-
HOPE THOSE EXCELLENT PAPER AND
PRESENTATION. I HAVE A SOFTWARE
WHICH IS HOW DO YOU SEE THIS
PANDEMIC AFFECTING. THE TREND
GOING FORWARD IN TERMS OF
COMPETITION TO DESIGN.
EVERYTHING THE THING A BIG-
SHAKEUP IN HOMES OR-
INFRASTRUCTURE OR WITHIN THE
SEEK LIKE A LARGER
CONVERSATION. WHAT DOES YOUR
WORK- TELL US ABOUT OF ABOUT
CONCERNS ON AND THAT IF. WE
BOUGHT THANK YOU. GREAT THANK
YOU. AND FINALLY SEVERAL DEBRA
YOUR TURN. YES YES THANK YOU
GREAT PAPER GREAT THIS I WANTED
TO ASK A LITTLE BIT MORE ABOUT
THE INTERNATIONAL CONTEXT NOT
JUST COUNTRY BY COUNTRY WHICH
WAS INTERESTING- BUT THE
INTERACTIONS ACROSS THE COUNTRY
TO KNOW THERE'S A LOT OF
DIFFUSION OF INFORMATION ACROSS
BORDERS AND ON BOTH COMPETITION
ACROSS BORDERS I WONDERED IF
YOU COULD SAY A LITTLE BIT MORE
ABOUT WHETHER THE SLOW DOWN IN
KNOWLEDGE IS. AFFECTED HOW IT
ENTERED. THE PARTICULAR
INDUSTRY IS AND ALSO OTHER- DAY
THE EFFECTIVE INTERNATIONAL
COMPETITION ON MARK UPS AND HOW
THAT IS OUT. GREAT WONDERFUL
GREAT SET OF QUESTIONS SO WE
HAVE ABOUT FIVE MINUTES LEFT IN
THE SESSION AND I WOULD LIKE TO
GO BACK TO OUR PRESENTERS TO
GIVE THEM A CHANCE CERTAINLY
NOT TO RESPOND TO EVERYTHING ON
THE TABLE I THINK THAT WOULD BE
CHALLENGING- BUT I'M SURE THAT
THEY HAVE MANY THOUGHTS AND
COMMENTS TO SHARE WITH US. SO
LET ME GO FIRST BACK TO THE
AUTHOR BOOK. AT FOUR IS YOURS.
SO FIRST OF ALL THANK YOU VERY
MUCH OR- AN EXCELLENT
DISCUSSION DOUBTED THIS WAS
GREAT. AND THANK YOU VERY MUCH
FOR. ERIC MCCORMACK AFTER WORK-
ON OUR I THINK DEMOGRAPHICS IS
A VERY INTERESTING CHANNEL IN
D. R. THERE HAVE BEEN
COMPLAINING IN THE TRUNK AND
YOU KNOW AS I HIGHLIGHTED.
DURING MY CALL- DEMOGRAPHICS
LONGTIME BUT THERE ARE MANY
MEDIA OUTLETS LIKE MARKUP
SPROCKETS LABOR SHARE ETCETERA
SO ARDOIN IN THIS PAPER IS THAT
ONE YOU WANT TO UNDERSTAND. A
SINGLE MACRO TRACK. I THINK
YOU'RE GOING UP AND BEING TO ON
THIS THAT THE LEVEL WHAT ARE
THE TERMS AND THEN WE NEED TO
TRY TO PIECE THINGS TOGETHER
BUT WE CAN COME UP WITH A
COHERENT STORY. I'M SURE ALL
THESE DIFFERENT MECHANISMS HAVE
SOMEBODY BUT IF YOU WANT TO
UNDERSTAND EVERYTHING
SIMULTANEOUSLY I THINK YOU NEED
TO RELY ON THE
OVERIDENTIFICATION AND TRY TO
SEE IF A SINGLE MECHANISM CAN
SPEAK TO ALL THESE DELIVERING
CHINA'S THAT YOU'RE OBSERVING
THE DATA. AT THEN IT COMES. THE
DEMOGRAPHICS I THINK YOU KNOW
FOR INSTANCE IN THE CASE OF
TURKEY CLEARLY YOU KNOW THE
POPULATION IS MUCH YOUNGER AND-
SO WE CANNOT SPEAK TO THE
TURKISH CASE OR- IF FOR
INSTANCE DEMOGRAPHICS. IS ABOUT
A NEW FIRM CREATION- BOOKLET.
NOT FIX IS SHRINKING BECAUSE
YOU KNOW THE PEOPLE WHO ARE
ENTERING THE WORKFORCE THAT
THEY DON'T. FIFTEEN IS
DECLINING OVER TIME AND THAT
AND THE LABOR FORCE. IS IT
DECLINING TO CORPORATE AND
LABOR FORCE DECLINING. BUT WE
KNOW THAT AND YOUR CARD
NATIONAL NEED FOR CREATION
HAPPENS TYPICALLY AROUND AGE
FORTY TO FORTY FIVE. SO AS A
RESULT IF TODAY'S. FIFTEEN YEAR
OLDS. THESE THESE PEOPLE WILL
TRY TO CREATE NEW. COMPOUNDS
NOT NEEDED. PROBABLY SO WE
SHOULD BE ABLE TO SEE. THE
MAJOR CHECK MARCH SO THAT'S WHY
I IT'S THREE IMPORTANT TRY TO.
LOOK AT ALL JOHN THE DATA SIGN.
AND TRY TO SPEAK. TO MANY THESE
CHINA PA. YEAH ALL OF THESE
CHINA ARE IN AND PROBABLY
IMPORTANT IN THEIR ALL RIGHT
BUT MANY TO A- FOR INSTANCE THE
LABOR SHARE. LABOR SHARE OR THE
CORRELATION BETWEEN THE RISE IN
MARKET CONCENTRATION OF
DECLINING LABOR SHARE SIX FOUR
LEVEL DEMOGRAPHICS. IN.
