ben s bernanke : early childhood education speech by mr ben s bernanke, chairman of the board of governors of the federal reserve system, at the children ’ s defense fund national conference ( via pre - recorded video ), cincinnati, ohio, 24 july 2012. * * * thank you very much for the opportunity to address you today. i'm especially pleased as an economist and policymaker to discuss the importance of education to the success of our economy. at the federal reserve we spend a lot of time looking at economic data, such as production and employment. in doing so, we try never to forget that these seemingly sterile numbers are, in fact, reflections of the economic aspirations, opportunities, and well - being of millions of americans. when individuals are denied opportunities to reach their maximum potential, it harms not only those individuals, of course, but also the larger economy, which depends vitally on having a skilled, productive workforce. as a result, we all have a stake in the essential work that you are doing for our children. so how can we improve the opportunities for all children and give them a chance to succeed in our ever - changing, globalized economy? as the husband of a teacher and an educator myself, as well as a parent and former school board member, i know from personal experience that, for creating opportunity and changing lives, there is no substitute for a quality education. the research shows that effective educations lead to lower rates of poverty, higher lifetime earnings, and greater satisfaction on the job and at home. and specialists in economic development have identified educational attainment as a key source of economic growth and rising incomes in many countries around the world. although education and the acquisition of skills is a lifelong process, starting early in life is crucial. neuroscientists observe that if the first few years of a child's life include support for healthy development in families and communities, the child is more likely to succeed in school and to contribute to society as an adult. conversely, without support during these early years, a child is ultimately more likely to drop out of school, earn lower wages, depend on government programs, or be incarcerated. 1 consistent with this research, early childhood education programs aim to nurture healthy development from the earliest years. programs that provide enriched experiences for children and that also involve parents have shown to benefit children from all backgrounds, but they have the strongest influence on children from disadvantaged environments. 2 importantly, state preschool assessments have shown

target range. we will do what is necessary to achieve that. at our meeting today we discussed the damage that high inflation does to people ; it is a scourge. high inflation devalues your savings. it worsens inequality in our society and it undermines our living standards. it hurts us all by impairing the functioning of our economy. it is for these reasons that the reserve bank board will make sure that this episode of high inflation is only temporary. i understand that the higher interest rates that are needed to bring inflation under control are unwelcome by many people, especially those who have borrowed large amounts over recent times. at our meeting, we discussed how the higher interest rates are putting pressure on family budgets, just at the time that high petrol prices and grocery bills are also squeezing budgets. we are conscious of this and are certainly taking it into account. this morning, we also discussed the consequences of not raising interest rates, and allowing high inflation to persist and become entrenched in expectations. if this were to happen, the evil of inflation would be with us for longer and the eventual increase in 2 / 4 bis - central bankers'speeches interest rates needed to bring it down would be greater. this would increase the risk of a severe recession and a sharp rise in unemployment. it would be much better to avoid such a costly outcome and so we have acted strongly to avoid it. i want to acknowledge, though, that we are travelling along a narrow path here. the board is seeking to return inflation to the 2 to 3 per cent range while at the same time keeping the economy on an even keel. it is still possible to do this, but there is a lot of uncertainty and we could be knocked off that narrow path, not least because of developments elsewhere in the world. at our meeting we also discussed an updated set of economic forecasts. our central case is that we do stay on that narrow path. economic growth, though, is expected to slow next year because of the deterioration in the global economy and the squeeze on household finances. our central forecast is that the unemployment rate holds steady for a while at what is a historically very low level, but then increases a bit as the economy slows. inflation is expected to start declining early next year and then take a couple of years to return to the 2 to 3 per cent range. in the short term, the east coast floods are adding to the upwards pressure on food prices, and next year there are