are closely monitored by the ecb in terms of our economic analysis. within this context, while we take the euro area real estate sector into account in assessing risks to price stability, we certainly do not target house prices, or for that matter, any other asset prices. we do monitor asset prices closely because of the potentially high costs for price stability and for the economy as a whole that are associated with strong appreciations and rapid reversals in asset prices. also, our monetary analysis covers the monitoring of money and credit which often reflect the evolution of prices and house purchases. in this sense, a strategy which on top of our economic analysis regularly assesses money and credit developments has an important benefit on the monitoring side in that it can contribute to identifying and limiting the emergence of unsustainable developments in asset prices. in terms of recent developments in the euro area real estate sector, the latest available data on house prices appears to support the notion of a cooling in euro area housing market developments after a prolonged period of unusually high growth rates in many euro area countries. that said, house price growth generally remains relatively buoyant in the euro area on average when seen in historical perspective – notwithstanding considerable heterogeneity in underlying country developments. the outlook for the euro area as a whole remains that of a soft landing, as price increases moderate gradually and further developments evolve in line with fundamentals. within this context, a continued moderation of residential investment would also be likely. the above economic assessment is complemented by information from our monetary assessment, in particular that the annual growth rate of loans to households was in october at 6. 8 %, from 7. 0 % in the third quarter and 7. 5 % in the second quarter. in this sense, there is no indication that the financial market turmoil has, as yet, limited lending to households, the moderation of which started as long ago as the second quarter of 2006. i am now at your disposal for questions.

31. 082017 welcome address first annual research conference of the banco de espana luis m. linde governor buenos dias, good morning to everybody. let me welcome you all to the first annual research conference of the banco de espana. we plan to make this conference our main research event each year. so, we hope that today ’ s edition is the first of many to come. our aim is to bring together scholars and policymakers to express views and discuss on the key policy questions for central banking, both from an academic and a practical perspective. the conference reaffirms the banco de espana ’ s commitment to research as an indispensable tool for economic policy - making. good research strengthens the foundation of our policy framework and lays the groundwork for the models we use in our economic and monetary policy analysis. the banco de espana commits significant resources to research. let me give you some figures. currently, according to the ideas database, our bank ranks third in research among national central banks in the euro zone. in 2016, researchers at the bank published more than 30 working papers. indeed, research is not a matter of quantity, but of quality ; in the last few years our researchers have published in top journals such as econometrica, the american economic review, the journal of political economy, the various american economic journals and the journal of monetary economics, just to mention a few examples. over the last three years, fifteen young economists holding phds from renowned international universities have joined the bank ’ s staff. i am pretty confident that our research output will be improved and enhanced in the future. challenges for macroeconomic research today and tomorrow you will be talking essentially about macroeconomics. looking forward, macro policies, monetary, fiscal, and macroprudential policies, are facing a number of challenges that require deep theoretical and empirical analysis. perhaps, first of all, we need to understand the causes and consequences of the current levels of low inflation in most developed economies, despite the fact that most major central banks have introduced unprecedented monetary measures to support activity and growth. several explanations, ranging from a “ debt supercycle ” to a secular stagnation have been proposed. if natural rates at very low or even negative levels are here to stay, central bankers will have to rethink our standard toolbox and to decide which policy measures put in place during the last decade should be maintained. in this respect, i think that the first paper of the conference, which analyze