recession. i. learning from crises folk wisdom, policymakers and researchers see opportunities in crises. everyone is familiar with the notion that one should never waste a crisis. jean monnet, among the founders of the european union, said that “ europe will be forged in crises, and will be the sum of the solutions adopted for those crises. ” 1 european union and emu decision - makers have made similar statements in each of their crises, including the present one. and when talking about the present situation, they often conclude by saying “ and we will emerge stronger this time too. ” policy economists seek to learn from crises, so that they can do better next time. during the thirty years from 1985 to 2015, i have been involved in a variety of roles in the management of crises, starting from the successful israeli stabilization program of 1985, during which i was part of a small team advising then secretary of state, george shultz, and through the see jean monnet ( 1976 ), memoires, ( paris : fayard ). bis central bankers ’ speeches ongoing management of monetary policy in the united states today, where we are engaged in managing the expected exit from the policies adopted by the fed to deal with the great recession. this morning i want to talk about major lessons learned from the economic crises of the last twenty years, many of them crises in which i was involved. i draw on three papers on lessons of crises that i wrote at different stages during that period. the three papers were written in 1999 ( when i was at the imf ), 2011 ( when i was governor of the bank of israel ), and 2014 ( when i had been nominated but not yet confirmed as vice - chairman of the fed. ) the ten lessons presented in each paper are summarized in table 1. each lesson is numbered, and each bears a letter : f for the 1999 paper ( written when i was at the imf ) ; b for the 2011 paper, when i was at the bank of israel ; and s for siepr 2, where the 2014 paper was presented. each of the lists reflects the concerns of the times and circumstances in which it was written. the 1999 paper was written at a time when the imf was under criticism for its handling of the many crises with which it had been confronted since 1994. it was a time of far less transparency than today. for instance, in may of 1997 when i paid a secret visit to thailand to try to gauge the seriousness of

in a monetary model ”. 5 auerbach, a. and y. gorodnichenko ( 2017 ), “ fiscal stimulus and fiscal sustainability ”, paper presented at the federal reserve bank of kansas city economic symposium, jackson hole, wyoming. 6 see, e. g. coenen, g., r. motto, m. rostagno, s. schmidt, and f. smets ( 2017 ), “ dsge models and counterfactual analysis ”, in “ dsge models in the conduct of policy : use as intended ” ( eds. r. gurkaynak and c. tille ), voxeu. org book, cepr press. 7 see christoffel, k., g. coenen, and a. warne ( 2008 ), “ the new area - wide model of the euro area : a micro - founded open - economy model for forecasting and policy analysis ”, ecb working paper series no. 944. 8 see blanchard, o. “ the need for different classes of macroeconomic models ”, piie realtime economic issues watch, january 12, 2017. 9 brayton, f. and p. a. tinsley ( 1996 ), “ a guide to frb / us : a macroeconomic model of the united states ", finance and economics discussion series 96 – 42, board of governors of the federal reserve system ( u. s. ). 10 muellbauer, j. ( 2016 ), “ macroeconomics and consumption : why central bank models failed and how to repair them ’, ’ voxeu. see also muellbauer, j. ( 2016 ), “ consumption and macroeconomics “, cepr discussion paper no 11588. 11 see, e. g., kaplan, g., and g. l. violante ( 2014 ), “ a model of the consumption response to fiscal stimulus payments ”, econometrica, 82 ( 4 ), 1199 – 1239 ; and mian, a., k. rao, and a. sufi ( 2013 ), “ household balance sheets, consumption, and the economic slump ”, quarterly journal of economics, 128 ( 4 ) : 1687 – 1726. 12 muelbauer, j. and r. lattimore ( 1995 ), “ the consumption function : a theoretical and empirical overview, ” in handbook of applied econometrics macroeconomics, eds.