do we foresee? are our frameworks helping us to manage climate, demographic or technological change? are we strengthening our stocks of economic capital? are we building economic resilience and helping communities to manage economic transitions ahead? there will of course be debate about priorities and choices but we need to make sure we are making decisions in the best possible way, and that we are analysing the options through the most effective lens. these questions are not only relevant to ireland nor only to the eu. they ’ re relevant to anyone who is interested in good public policy and good economics. they are questions that economists and policymakers need to address. they do not diminish the importance of macroeconomic stability and sound public finances, nor the fact that the composition of expenditure and investment matters, that properly functioning markets matter, that a well - regulated financial system matters, that price signals matter and that incentives matter. in fact they emphasise that it all matters. 1 in my view, the raison d'etre of economics is good public policy. as nobel prize winner jean tirole wrote in economics for the common good, “ economics not only documents and analyses individual and collective behaviour ; it also aspires to recommend better public policy ”. economics is one of the most important tools in a policy adviser ’ s tool kit. 2 see for example why nations fail : the origins of power, prosperity and poverty by daron acemoglu and james robinson and the wealth and poverty of nations by david landes. 3 to highlight just a few, a contribution from a group of french and german economists in 2018, reconciling risk sharing with market discipline : a constructive approach to euro area reform, a martin, pisani - ferry and ragot paper from last month, reforming the european fiscal framework, another recent paper from blanchard, leandro and zettelmeyer, redesigning eu fiscal rules : from rules to standards and the return of fiscal policy and the euro area fiscal rule from vitor constancio in 2020. 4 the european fiscal board has argued along similar lines. see, for example, thygesen et al. ( 2020 ) : “ growth - enhancing expenditure needs to be protected. the crisis underlined how certain items of government expenditure that are essential to support growth, such as investment, have declined over time, especially during periods of fiscal consolidation. this expenditure therefore needs an effective shield in the future, notably by allowing certain increases in investment when assessing compliance

called a lack of explainability ). in some cases, even the ai developers themselves may not know precisely how the ai approach works. as i noted, we are already seeing banks use ai in a number of ways, and we have regular discussions with them about understanding and managing the associated risks. 6 whether and how they might make use of generative language models remains to be seen. the technology may bring new efficiencies to banks'software development processes ; or have applications in customer service ; or it may be useful in some way we haven't foreseen yet. as with tokenized assets, i am curious to see how banks may make further use of ai. i also want to make sure they do that responsibly. conclusion tokenization and ai are just a few of the innovations that may ultimately come to play a prominent role in banking and, for that matter, more broadly in the economy. i could just as easily today have talked about web3 or quantum computing. all of these innovations will have their champions, who make claims about how their innovation will change the world ; and i think it's important to view such claims critically. but it's equally important to challenge the doubters, who insist that these innovations are much ado about nothing, or that they will end in disaster. the world will change, and we should encourage innovations that show promise for benefitting society, including the financial services sector. 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal reserve board. 2 " innovation, " oxford english dictionary, accessed april 18, 2023, https : / / www. oed. com / view / entry / 96311? redirectedfrom = innovation # eid. 3 paul volcker, " paul volcker : think more boldly, " the wall street journal, december 14, 2009, https : / / www. wsj. com / articles / sb10001424052748704825504574586330960597134. 4 christopher j. waller, " thoughts on the crypto ecosystem " ( speech at the global interdependence center conference : digital money, decentralized finance, and the puzzle of crypto, la jolla, ca, february 10, 2023 ). 5 the remainder of this speech refers to tokenized assets that are represented on a blockchain. but