to approximately three children during their lives. after having fallen to 1. 5 children in the mid 80s, this figure is now projected to be only 1. 75 children in the coming decades. secondly, we live longer. at the time the public pension scheme ( aow ) was introduced ( 1957 ), the average remaining life expectancy at age 65 was less than 15 years. nowadays, new aowbeneficiaries expect to receive aow - benefits for more than 18 years on average. r & d - expenditures divided by value added. p. kalaitzidakis, t. p. mamuneas and t. stengos ( 2001 ), ranking of academic journals and institutions in economics, october 2001. source : oecd. marginal tax on labour consists of income tax, employee and employer social contributions as a percentage of total labour costs of average worker. turmann, a. ( 2004 ), a new european agenda for labour mobility, ceps task force report. world bank ( 2006 ), world development indicators, business environment database. source : un ( 2006 ), world population prospects : the 2006 revision. from an economic point of view, both demographic trends are basically good news. having fewer children reduces the scarcity of finite natural resources, which has a positive effect on individual welfare. living longer partly mitigates this effect as individuals use more finite natural resources the longer they live. however, living longer also increases an individual ’ s potential earning capacity over their lifetime. reaping the potential economic gains from living longer requires adjustments, in particular with respect to education and retirement. let me take a closer look at both. living and working longer requires more attention for education both when young and old. young people should be properly educated and the number of school drop outs should be reduced. older people need to get additional education during their careers to keep pace with the latest technological developments. in this respect, it is good to note that this concept of life - long learning is one of the leading principles of education at insead. living and working longer also requires an increase in retirement ages. until recently, most european countries never increased their statutory retirement ages despite the increased longevity of their population. this threatens the sustainability of the pay - as - you - go financed european public pension schemes. germany and the uk have recently announced a gradual increase in the statutory pension age to 67 and 68 respectively. other european countries should also increase retirement ages in response to longevity developments

willem f duisenberg : congratulatory speech at the national bank of belgium ’ s 150th anniversary speech by dr willem f duisenberg, president of the european central bank, at the official celebration of the 150th anniversary of the national bank of belgium, brussels, on 12 may 2000. * * * it is a great honour to be invited to speak at this official celebration of the 150th anniversary of the national bank of belgium ( the bank ). before i say anything else, let me first congratulate the bank on reaching this milestone in its history and allow me to congratulate in particular all those whose work and dedication have ensured its place as a successful and well respected central bank. as we have heard from prime minister verhofstadt, the bank enjoys a rich and extensive history, which dates back almost as far as the state of belgium itself and during which time it has contributed greatly to the development of the belgian economy. it is also a time in which the tasks and responsibilities of central banks have evolved to such an extent that they bear little resemblance to those of a century and half ago. since then historical, political and technological developments as well as advances in economic theory have caused the role of the central bank to evolve and mature. they have also, almost invariably, increased its importance. of these changes one might first mention the economic consequences of war and of the great depression, which focused the minds of economic thinkers and governments on the role that macroeconomic policies should play in achieving higher levels of economic growth and welfare. second, the end of the economic boom and the rise of inflation in the 1970s increased our awareness of the importance of sound money and the need for monetary policy to be aimed at maintaining price stability. third, the disinflation process that followed served to emphasise the benefits of conferring responsibility for this policy upon an independent central bank. however, among those developments that have most influenced the role of europe ’ s central banks in recent decades, there is one which stands out as being pivotal. i am referring, of course, to european economic and monetary union ( emu ). it is now more than 30 years since the werner report first proposed a framework for replacing europe ’ s national currencies with a single european currency, more than 20 years since the establishment of the european monetary system ( ems ) and nearly 10 years since the signing of the maastricht treaty, which committed eu member states to achieving monetary union. in