framework from levels 4 to 6, in collaboration with formal educational institutions. regular contact is maintained between academics and researchers in the various departments of the bank and other central banks. a number of conferences and workshops have been organised by the bank in the past, and an increasing number of academics have been presenting their research findings at seminars in the bank. during the past two years, a number of collaborative research projects have also been initiated and completed. this latter initiative has become more formalised with the launch this year of the visiting research fellows programme which will enable leading academics or researchers from other central banks to spend time at our head office pursuing their research and interacting with bank staff. visitors from the academic world will thus be able to discuss their latest research work and collaborate with bank staff as co - authors of research papers on a regular basis. the bank also collaborates formally with tertiary institutions as part of the strategy to enhance central banking skills and knowledge in south africa. to this end, the bank is currently sponsoring a chair in monetary economics at the university of pretoria. this should ensure the development and promotion of research and tuition in the field of monetary economics at the post - graduate level. the incumbent serving as chair will become a visiting research fellow at the bank to foster closer collaboration and research synergies between the bank and the university. in an effort to improve the quality of economic journalism in africa, the bank, in partnership with rhodes university, is in the process of establishing the african economics journalism centre at the school of journalism and media studies at the university. from 2007, the bank will provide funding and institutional support, as well as funding for scholarships to attract students from previously disadvantaged backgrounds to economics and financial journalism. the sarb college will furthermore assist with the design of the macroeconomics curriculum as part of the programme. furthermore, from 2008, rhodes university will offer a dedicated postgraduate diploma in economics journalism, aimed at mid - career journalists and journalism graduates who lack an economics or commerce background. our contributions to universities are not confined to funding. a number of bank staff give specialised lectures or courses at various universities. i have the honour of being an honorary professor at unisa, the university of pretoria, the university of stellenbosch and the university of limpopo. this commits me to present a number of lectures and seminars to staff and students. i particularly value the interaction with students and i often feel comforted by the quality of the training that our future economists are receiving. overall, the collaboration with

universities and research centres plays a key role in the continuous upgrading of our intellectual capabilities and the deepening of our knowledge of relevant subjects. these interactions are fundamental to the fulfilment of our strong commitment to excellence in economic analysis and research at the bank, which is reflected in our series of working papers and periodic bulletins. the close collaboration between the bank and the academic world mirrors what is occurring more broadly between academia and the new knowledge - based industries. it facilitates the continuous elaboration and improvement of a large set of tools that are of utmost importance for decision - making at the bank, ranging from models for forecasting and policy evaluation to analytical frameworks for monitoring monetary developments. 3. the interaction between research and policy - making macroeconomic policy has attracted a great deal of research in recent years. much of this research work has concerned issues that are highly relevant to those of us who are engaged in monetary policy decisions. one example is the misconception that there is a permanent trade - off between inflation and unemployment ( or output ). we are indebted to academic research for proving that the attempts to exploit such trade - offs eventually only lead to higher inflation. it therefore re - established a firm basis for the concept of the long - term neutrality of money. indeed, this is a perfect example of an academic insight that has become a deep - seated principle of central banking around the world. i have spoken to you about the important input that economic research provides to central banking. let me briefly touch on the other leg of this exchange, from policy to science. by facing the challenge of decision - making in real time and in the real world, policy - makers continuously uncover a wealth of new intellectual problems that may be unknown to academic researchers. moreover, economic policymakers have a better knowledge of the institutional constraints affecting policy and are therefore able to transmit a sense of realism to economists who analyse monetary policy issues. an example that springs to mind is that of inflation targeting, which did not originate in any textbook, but at central banks. this widely implemented monetary policy framework has in turn spawned a significant academic literature. an additional, less obvious, but very important aspect of this exchange is that policy - making introduces a form of discipline in the science of monetary economics by placing a premium on analytical results that prove to be robust across different approaches and time horizons. a central bank needs to be very cautious about " jumping on the bandwagon " of any new but untested paradigm that