jean - claude trichet : economic diversity on both sides of the atlantic speech by mr jean - claude trichet, president of the european central bank, at the us sciences po foundation annual benefit, new york, 16 june 2011. * * * ladies and gentlemen, it is a great pleasure for me to speak to you here tonight. the past few years have been a testing time for the economies of both the united states and europe. we were faced with the worst financial and economic crisis since the second world war. still today – on both sides of the atlantic – we are dealing with the consequences of the crisis – for economic growth, for employment and for government finances. the crisis has also exposed the united states and europe to a number of asymmetric shocks – in which different parts of our economies have had a wide diversity of experience. some countries within the euro area are the particular focus of market attention at the moment as a result of their sovereign debt issues. some observers have been wondering how diversity can be dealt with in europe ’ s economic and monetary union ( emu ), what it means for monetary policy and whether the variations in economic conditions are aggravated by product and labour market rigidities. it has often been argued that economic diversity or heterogeneity is very significantly larger in europe than in the united states. we at the european central bank ( ecb ) have been looking closely at the degree of diversity in the two large, continental advanced economies on either side of the atlantic. and some of the findings from this comparison are quite interesting. because they show that economic diversity within the two currency areas is very similar in many ways. the analysis also shows that, in fact, in a large number of respects the two economies are similarly diverse. i would like to share some of the key insights of this analysis with you tonight. i. economic diversity in the euro area and the united states the united states and europe are often compared. this is quite natural. americans and europeans share a common cultural legacy. but our two economies, and i am speaking here of the economy of the euro area on our side, are also similar. both are of similar size, in terms of population and in terms of economic output. both have closely integrated financial and product markets. and both have a single currency. let me begin my comparison with an economic indicator that is particularly close to a central banker ’ s heart : inflation. in historical terms, overall inflation has been low and stable in both the united

timothy f geithner : us monetary policy in the global financial environment remarks by mr timothy f geithner, president and chief executive officer of the federal reserve bank of new york, at the japan society corporate luncheon, new york city, 9 march 2006. i would like to thank margaret mcconnell of the bank ’ s research and statistics group for valuable contributions to this speech. * * * we are in the midst of another wave of global economic and financial integration. this movement toward greater openness and the associated rise in capital mobility offers the prospect of substantial economic gains for the u. s. and the global economy. stronger real and financial linkages across nations have the potential to significantly raise the prospects for long - run world growth. the ensuing development of the market sector in emerging market and developing economies offers probably the most powerful means available for raising income growth and living standards in a very large share of the world ’ s population. these changes, and the complementary advances in technology, offer the prospect of more productive and stable real economies. the increase in the ties between national financial systems, the greater sophistication of financial markets and financial market instruments and the increase in capital flows across borders, allow risks to be shared more broadly and capital to flow to where the returns are highest, also contributing to stronger and more stable future economic growth. this process of integration has, of course, a range of implications for policymakers. many of these implications are positive, for the benefits of integration over time are powerful and compelling for all economies. in important ways, economic integration may have made the principal job of central banks easier, by contributing to productivity growth and reducing some sources of inflation pressure, at least during the transition when a large share of the working age population of the world is being brought into the market. but the process of change in how economies and financial markets interact also complicates the task of central banks. our understanding of the how these changes affect our capacity to forecast economic activity and inflation and our ability to assess how monetary policy affects the economy almost certainly lags the changes underway. in my remarks today, i will talk about some of the implications of these challenges for the conduct of monetary policy. i will focus on two features of what is happening in the world economy and financial markets today that are among the most interesting and consequential of the many questions we face today in thinking about the changes in the world economy and the task of central banking. these are, first,