reliance on ai systems requires not only a workforce that can adapt to these tools but also understand their implications. why then are we particularly excited about using ai? while we need to carefully manage the risks involved with these new technologies, we see great potential in them. not only can we enhance our work efficiency through automation, but new technologies and large datasets promise new insights that can help drive forward our understanding of the functioning of our economy, and improve supervisory work. the role of us humans in all this is and will be crucial. it is important that we fully utilize the deep expertise and various perspectives of our different organizations to meet the rising challenges of ai, data proliferation and analytics. only by fostering an open culture of innovation and investing in human capital and technology can we ensure that we keep pace with the evolving landscape around us. the ai and data revolution must be harnessed to improve europe's competitiveness and stability, as well as to enhance the resilience of the economy and financial system. thank you for your attention. once again, a warm welcome to all of you. i wish you a very beneficial, inspirational and thought - provoking seminar! 4 / 4 bis - central bankers'speeches

other pressures of population ageing is much weaker than earlier anticipated. the challenges of sustainability of public finances have been analysed comprehensively in the recently published report by the ministry of finance 2 calculations of the long - term trend in public finances carried out at the bank of finland 3 reinforce the outcome of the ministry of finance ’ s analysis : there is now a pressing need to readjust the public finances. estimates made at the bank also indicate that the extent of the adjustment will depend largely on the types of policy measures taken to reduce the deficit. of the various possible alternatives, policies that impact the labour market will be particularly expensive. a notable tightening of earned income taxation would weaken the employment situation and increase the costs of public service provision, and thereby their gdp contribution. from the perspective of the economy, it is not irrelevant how public finances are consolidated and how their long - term sustainability is secured. one particularly effective means of reducing the adjustment required for public finances would be an enhancement of public - sector productivity. this is also confirmed by the bank of finland calculations i mentioned earlier. productivity performance should, however, materially change from the trends of the last few decades. besides boosting productivity, other measures are also needed. they concern, among other things, the need to extend the number of years people spend in working life. particular attention should be focused on measures that would induce young people to complete their educations and enter working life earlier than at present. older employees ’ later retirement is another effective way of reducing the adjustment in public finances. these effects are, however, channelled mainly via central and local government finances. because the funding of the pension scheme is weighted towards the final years of working life, the effect of these years on the scheme ’ s sustainability will be minor. in addition to improving productivity in public services and extending the number of years people spend in working life, other measures are needed to bring about the necessary adjustment. it will probably be impossible to avoid higher taxes and a reassessment of public expenditure. the third challenge relates to basic issues in economics. in early autumn last year, paul krugman asked in his already popular column : “ how did economists get it so wrong? ” 4 krugman ’ s central argument was that the economics profession had gone astray. the fascination for analytical elegance and mathematical acrobatics had locked economics into an ivory tower of frictionless markets and rational economic agents while marginalising attempts to understand the economy as it actually is.