implementation frameworks and to assess a number of issues related to the consideration of alternative frameworks. i hope the work and ideas presented and discussed over the next two days will spur subsequent research on these issues and promote further collaboration among all of you. as i have often stressed before, in addition to its responsibilities for monetary policy and financial regulation and supervision, the federal reserve takes very seriously its role as a research institution. i want to thank our research conference committee for putting together this high - caliber research conference, which has gathered distinguished speakers and guests from around the world and, i am sure, will add to our understanding of the implementation and transmission of monetary policy. welcome to the federal reserve board. i hope you all have enjoyable and productive discussions over the next two days. bis central bankers ’ speeches

both debt and equity. but this deficit is also a measure of the increase in the level of net claims, primarily debt claims, that foreigners have on our assets. as the stock of such claims grows, an ever - larger flow of interest payments must be provided to the foreign suppliers of this capital. countries that have gone down this path invariably have run into trouble, and so would we. eventually, the current account deficit will have to be restrained. the nation's economic potential will be brighter if that comes about through an increase in domestic saving rather than a reduction in domestic investment. a more contentious issue is whether the mix of domestic private and government saving affects the rate of productivity growth. another is whether the form of private saving - - for example in stocks or debt instruments including bank deposits - - affects productivity growth. ultimately, the composition of real investment in our economy will reflect, among other influences, the attitudes toward risk of those who own the financial claims against the capital stock. the nation ’ s savers, daily in the marketplace, exhibit an obvious sensitivity to the association between expected return and risk. few, if any, individuals would be willing to accept greater risk without the potential for greater reward. similarly, a nation as a whole would not be willing to invest in riskier assets without a commensurately greater overall economic growth potential. that same tradeoff is reflected in the willingness of many investors to forgo the higher rates of return on equity for the greater tranquility of the lesser stress and risk associated with most debt instruments. reflecting that differential in risk, returns on common stocks over rolling twenty - year periods have almost always outpaced the returns on less - risky securities. should relative preferences of savers in the aggregate shift toward debt instruments and away from equity, interest rates will be driven lower and equity - price ratios higher. these shifts in asset valuation will induce business enterprises to alter their choice of capital projects. specifically, firms will find that only projects with lower average rates of return will meet the requirement of providing the more certain, more stable income stream desired by savers. the physical counterpart to this choice by businesses of projects with lower expected financial returns is a slower growth of productivity, on average, across the economy. conversely, if savers become more risk - tolerant, financial risk premiums will decline. in response to these reduced penalties on risk, firms will be induced to adjust the mix of their endeavors toward more - speculative projects - - but, importantly,