size of a firm's foreign sales and production. and operational risks have also become more important at many firms. examples include political risks - such as disruptions to operations or sales associated with political upheaval in a given nation or with changes in law - and reputational risks flowing from the challenges of conforming to a broader array of legal and cultural norms. i would encourage you to consider the degree to which each of your institutions has accurately measured and effectively managed these and other risks associated with global operations. implications for public policy policymakers should and do pay attention to globalization. to some extent, they have helped to promote it by removing or lowering barriers to cross - border investment, migration, and trade. i hope policymakers continue to take steps to facilitate globalization. but progress probably will also depend on other factors, like further advances in information, communication, and transportation technology, as well as changes in the habits of individuals and firms, all of which are largely out of the hands of policymakers. besides broad efforts to facilitate it, how should public policy respond to globalization? as i noted earlier, some are concerned that financial globalization leads to boom - and - bust patterns in capital flows and investment, especially in emerging - market nations. a return to capital controls is probably not the best choice here. more likely to be helpful is attention to the institutional environment, which encompasses the supervision of financial institutions, policy transparency, legal systems, control of corruption, incentives for good corporate governance, and macroeconomic stability. a recent international monetary fund study argues that countries that have benefited the most from globalization have been those with the strongest institutions. 25 we are currently experiencing a net outflow of capital from the developing world toward the industrial countries, a movement contrary to the prediction of simple economic theory. one important factor in this movement is that, on average, the institutional framework in industrial countries is perceived as being more favorable to investors in terms of allocating capital efficiently and protecting investors from fraud, waste, and expropriation. there is every reason to believe that capital flows will resume to those emerging markets that demonstrate a commitment to sustained improvements in their domestic institutions. the dislocation that can be caused by changing trade patterns poses another challenge to policymakers. this dislocation is not different in any meaningful way from the dislocation caused by technological progress. just as our economy would be a lot poorer if we had protected horses and buggies by outlawing automobiles, so it will be poorer if we

committed to achieving our maximum - employment and averageinflation goals. it is too early to say how long it will take. the committee has stated clearly that it needs to see substantial further progress toward our goals before adjusting purchases. the economy is far away from our goals in terms of both employment and inflation, and even under an optimistic outlook, it will take time to achieve substantial further progress. given my baseline outlook, i expect that the current pace of purchases will remain appropriate for quite some time. of course, the outlook is highly uncertain, and forecasts are subject to revisions — a key reason why our forward guidance is outcome based and tied to realized progress on our goals. the recovery thus far has been uneven, and the path ahead is uncertain. we remain far from our goals, with core pce inflation only at 1. 4 percent and payroll employment nearly 10 million below its pre - pandemic level. the committee ’ s forward see the centers for disease control and prevention covid data tracker, available at https : / / covid. cdc. gov / covid - data - tracker / # vaccinations. - 12 guidance will help keep borrowing costs low along the yield curve for households and businesses, improve inflation outcomes, and enable the labor market to heal, leading to a broader - based and stronger recovery. the strong support from monetary policy, together with fiscal stimulus, should turn the k - shaped recovery into a broad - based and inclusive recovery that delivers full employment, as mike mccracken would have wished. thank you.