lower growth in productivity and output. this problem is not just in the future. bond markets have become very aggressive in building in expectations of rising short - term rates over time into today's long - term interest rates. higher long - term rates today in response to the long - term effects of permanent fiscal policy changes would offset part of the intended stimulus. the second principle for a temporary demand - side fiscal program is to implement policies that have a large " bang for the buck. " even with agreement on these two principles, designing a temporary demand - stimulus package is a challenge. in general, temporary policies have effects that are more difficult to predict than those from permanent changes. and temporary policy changes typically leave a hole on the other side and therefore create other problems down the road. still, on balance, a package of well - crafted, temporary, quick - acting demand - side fiscal measures would, in my view, make a constructive contribution to supporting and strengthening the rebound expected next year. the current debate in the congress about fiscal stimulus creates a challenge for forecasters and monetary policymakers alike. monetary policymakers condition their policy on a forecast, and the forecast must include some assumption about fiscal policy. in most cases, and especially when fiscal policy was not a player in stabilization policy, this dependence of monetary policy on fiscal policy was not a serious issue. but today, the forecast for 2002 is quite sensitive to whether or not a stimulus package is implemented and to the specifics of the package. i, for one, have assumed that the congress would reach a timely agreement and implement a package with temporary measures characterized by relatively high bangs for the buck. while i have some doubt that this will be the outcome, i have not changed my forecast yet. conclusion the economy contracted in the third quarter and appears to be contracting again in the current quarter. fortunately, a considerable amount of stimulus is already in train because of the combination of monetary policy easing and fiscal policy measures already enacted. the congress may still pass additional fiscal stimulus before year - end. in addition, the internal dynamics that support recovery may soon come into play. in this case, the economy should gradually strengthen over next year. for the moment, the risks continue to be to the down side, but the front - loaded response of monetary policy has already made an important contribution to countering the further adverse shock and, in addition, has provided some insurance against downside risks. once the economy shows signs of moving to a rate of growth above trend

nout wellink : pension in motion - the netherlands in an international perspective speech by dr nout wellink, president of the netherlands bank and president of the bank for international settlements, at the abp / pggm - congress “ pension plan design for the future ”, the hague, 25 april 2005. * * * “ the dutch pension system is among the best in the world. but does it have a future? ” this is how the opening question reads on the invitation to this two - day conference. a challenging question, to be sure, one that is bound to release many emotions. for a discussion of pension and the future cannot be held without raising the need for reforms. and politicians do not win public favour with proposals towards reforms. on the contrary, strikes and mass demonstrations are their lot all over europe and even in the netherlands. even so, many citizens, the younger generation in particular, seem convinced of the need for pension reforms. the main cause – the ageing of the population – is leading to increasing fiscal pressure in most western countries. considerable fiscal deficits or pension contribution rises are imminent if we do not take action. in this address, i will therefore look at the situation in several european countries. has any progress been made yet? and how is the netherlands doing in this context? subsequently, i will highlight two other themes : transparency and freedom of choice. transparency is a very topical theme for pension funds in the netherlands. greater transparency is vital for the system to be future - resistant. transparency regarding the financial position, the risks and the risk distribution. for the traditional actuarial and accounting techniques no longer afford consistent insight into the financial position of pension funds. deficits are not identified in time, and once they are established, it is not always clear by which party they should be absorbed. things just have to improve. the financial supervisory framework will bring relief. this is my first message for you. my second message concerns freedom of choice. the increasing diversity of labour patterns among workers calls for customization of pensions schemes. however, the dutch appear to hold pension security very dear. greater freedom of choice must therefore not be provided at the expense of pension security. more than that, for the truck system that is typical of our system, a high degree of security is a prerequisite. people must be able to rely on a given minimum level of pension rights. above that level, they could be allowed more freedom of choice in the risks they run. how