##ler - gilchrist framework ( op. cit. ) correctly depicted recent events. the financial crisis looks as much like a sudden breakdown in financial intermediation which then spilled over to, and exacerbated, sovereign debt tensions, as a crisis sparked by risky corporate leverage or banks being less efficient in monitoring investment projects. in effect, we should find out and emphasise what works. do some interest - rate spread definitions work better than others? does that information content change over time? do frameworks predicated on one country translate to another? can we understand the dynamics at play behind the fragmentation of the euro area financial system, and what it would take to reverse this trend? krugman p. ( 2009 ), how did economists get it so wrong?, the new york times, 6 september. bis central bankers ’ speeches i conclude. for both model - building and policy - making, the agenda is formidable. but conferences like this highlight that some of the best minds in the profession are pursuing that agenda, and pursuing it vigorously. even though the models at our disposal proved to be relatively inadequate to deal with the complexity of the crisis, still it is the economic framework developed so far that has guided our policy decisions. to put it differently, economic models have shown severe limitations, but without them, policy - makers around the world would have been condemned to complete inaction or blatantly erroneous actions. models are devices to help structure, organise and discipline our beliefs. they help identify the key assumptions on which any policy recommendation rests, and provide an essential framework for general - equilibrium policy analysis. in economics, as in other sciences, they highlight channels of interest and abstract from other factors. they can ( and should ) be tested against data, bringing our dismal science, economics, one step closer to popperian refutability. they also encourage the building of new data sets and decisions upon appropriate data concepts. ultimately, they help us to learn from past errors and provide safeguards against political adventurism. as general eisenhower once said : “ in preparing for battle i have always found that plans are useless, but planning is indispensable ”. when combating the crisis, models are sometimes useless, but modelling is indispensable. i thank you for your attention. bis central bankers ’ speeches

janet l yellen : " welcoming remarks by chair yellen at a conversation with the chair : a teacher town hall meeting " speech by ms janet l yellen, chair of the board of governors of the federal reserve system, at a conversation with the chair : a teacher town hall meeting, washington dc, 12 january 2017. * * * thank you, and thank you to all the educators who have come to the board this evening or travelled to one of the fed ’ s regional reserve banks to watch and listen via the webcast. i am very much looking forward to hearing from you about teaching economics, and i am eager to respond to your questions. for that reason, and also because i expect that school starts very early tomorrow for many of you, i will try to keep my remarks brief. but i do have a message to impart about the work you do, which is vitally important not only to your students, but also, i believe, to the world they will soon inherit and even to the mission of the federal reserve. first and foremost, of course, like all teachers, you are helping prepare your students for successful and rewarding lives. the knowledge you impart and the intellect and talents you help develop are powerful tools your students can use to build those lives. like some other subjects students encounter in school, economics teaches analytical and critical thinking skills that can aid in the development and success of anyone. part of success for your students is economic success — as capable, creative, and productive members of the workforce and as consumers adept at managing their finances. economics provides knowledge and skills of practical use in college and in the workplace, and it also provides skills to plan and make wise financial decisions, which are some of the most important and consequential that we face in life. your students benefit very directly from this education, but so does everyone else in society. everyone is engaged in and depends on the economy, and nothing is more critical to a healthy and growing economy than the capability, creativity, and productiveness of its workforce. whenever i am asked what policies and initiatives could do the most to spur economic growth and raise living standards, improving education is at the top of my list. in addition to the role you play in preparing students for jobs and careers, you also help prepare them to be responsible consumers. the economy needs productive workers, and it also depends on consumers, whose individual spending decisions, as most of you surely have taught in class, collectively account for two