a h e m wellink : the impact of new technologies on the implementation of monetary policy speech by dr a h e m wellink, president of the nederlandsche bank, at a symposium of the banque de france on “ new technologies and monetary policy ”, paris, 30 november 2001. * * * when thinking about new technologies, information and communications technology ( ict ) is probably the first thing that comes up in most people ’ s mind. and, there are those who see an acceleration in the diffusion of ict as being equivalent to the concept of the ‘ new economy ’. for the purposes of this conference, i would prefer to take a wider perspective, in which the new economy is seen as the interaction of several mutually reinforcing factors. these include advances in ict, financial innovation and liberalisation, the globalisation of trade, improved functioning of markets and enhanced macroeconomic management. the interplay of these factors has the potential to raise the speed limits of the economy. that is, the new economy can operate at higher growth rates than in the past without generating additional inflation. therefore, both the initial hype surrounding the new economy with some pronouncing the demise of the business cycle, as well as the elimination of the new economy all together in response to current economic circumstances, seem to be misguided. the jury is still out on the question whether we can detect a new economy in europe. without wanting to prejudge the outcome, i would argue that there is no intrinsic economic reason to expect the new economy not to materialise. so, assuming that it will take root, indeed what does this new economy imply for the monetary policymaker? i have a couple of general observations to make. first, the new economy influences the transmission of monetary impulses through the economy. it can be argued that in the new economy it will take less time for a monetary policy impulse to have an impact on inflation and output, while the impact of a given impulse will be smaller. since there is a separate panel discussion devoted to this topic, i will leave it at that and move on to the second observation. that is, policy makers do not bring about the new economy. it is the result of private sector behaviour, driven by innovative entrepeneurship or, more fashionably, ‘ creative destruction ’. policy in general can only be conducive to the new economy. in a market - based economy, private sector decisions are guided by the alloca

not an exact science so i do not know what the right level is. indeed, what matters is that the euro is stable, and so this « falling dynamic » is economically justified, but at some point it will have to stop and the euro stablise. president hollande, who congratulated the ecb, promises that france will not stop making the necessary reforms. in your opinion, is the macron law which is being debated in the national assembly one of the elements of the reform? or is it insufficient? for us, it is a small step in the right direction. we are going to make investment easier in europe, but people have to want to invest, and for that it is necessary to have reforms promoting entrepreneurship and which make the economy more flexible, and the macron law is going in this direction. we must continue to reform? it is necessary to continue to reform – in all the euro area countries, for that matter, not only in france. last question on the troika. will it make another visit to greece? or will it lie low? because it would not be welcome there at the moment. i think it would be welcome there because the new greek government will need and want to talk with europe. we are waiting to know who our new contacts will be, who the new finance minister in greece will be. we will know in the days to come. isn ’ t he extreme - left? he will have his ideas and, in the end, europe is a compromise of different ideas. that is how it works. bis central bankers ’ speeches