mccallum stressed regarding rules have become widely accepted. the first message is that rules can be countercyclical. mccallum became interested in policy rules at a time when those rules were closely associated with what is termed “ nonactivist ” policymaking — defined as approaches that did not involve the monetary authority responding to fluctuations in real variables such as output and employment. at that time, the research literature focused on what was known as the k percent rule, implying a fixed rate of growth for the money supply. this rule was intended to pin down the longer - run inflation rate, but it precluded monetary policy responses to the state of the business cycle. in contrast, mccallum, as well as other economists of his generation such as stanley fischer and john taylor, argued that it was appropriate to consider both nonactivist policy rules and rules that were deliberately countercyclical or activist. 6 a policy rule, according to this view, could respond to movements in output, employment, and inflation in a systematic way, using a formula intended to be applicable over time and in different circumstances. 7 today it is widely accepted by economists that monetary policy rules can be activist rules. a second, related message of mccallum ’ s work was that different rule specifications can concretely characterize differences among economists on appropriate monetary policy. in the 1970s, the whole notion of policy rules was closely associated see dornbusch and fischer ( 1978, p. 290 ), taylor ( 1980, pp. 31−32 ), and mccallum ( 1980, 1987 ). see mccallum ( 1987, p. 416 ). - 7with advocates of monetarism and rational expectations, with keynesian economics being seen as entailing opposition to policy rules. mccallum opposed this dichotomy and observed, “ to me it seems quite clear that debates between economists — for example, milton friedman and james tobin — are about the desirability of different policy rules. ” 8 that is, mccallum wanted to represent alternative perspectives on monetary policy as different rule specifications, and he urged the study of rules as a means of understanding various policy prescriptions and their consequences for the economy. this perspective on rules has also become standard. indeed, the box on monetary policy rules that regularly appears in the federal reserve board ’ s monetary policy report provides a menu of policy rules designed to reflect a variety of views about the appropriate formulation of monetary policy. 9 similarly, multiple rule prescriptions and the possible

christian noyer : the euro area sovereign debt crisis speech by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, at the bank of france / toulouse school of economics conference “ the euro area sovereign debt crisis ”, paris, 19 december 2011. * * * ladies and gentlemen, it is a great pleasure for me to give the introductory address to this stimulating conference that the banque de france is very pleased to organize jointly with toulouse school of economics. obviously, finding a more topical subject would be difficult, now that euro area ’ s sovereign debt markets are caught in the vortex of the financial turmoil that has been plaguing the world economy for the last four years. this topic is also the one we have chosen for our next financial stability review, to be released next march, with a significant number of contributions stemming from today ’ s presentations. the current crisis is indeed extremely challenging. many complex factors are currently interacting, making policy decision - making particularly difficult. in such a context, academics have a critical role to play to help us clarify the tradeoffs and available options, so that we are better able to make the right choices in real time. this very fact that intellectual inputs from research are a precious resource in times of stress and multi - faceted uncertainty confirms me in my view that central banks ’ investment in economic research, be it in - house or through partnerships with academia, is a very valuable asset. therefore, i also warmly welcome this conference as being one brilliant illustration of the benefits brought by our three years long partnership with toulouse school of economics ( tse ). note however that, while the organization of high - level academic conferences has been an important achievement within this partnership, it is not the only one. indeed, many avenues of fruitful collaboration have developed. two series of regular joint seminars, one on monetary economics, the other on financial stability, and several workshops have notably contributed to strengthen the links between banque - de - france and tse researchers and stimulate the scientific and policy debates. i would also like to take this opportunity to thank jean tirole for his personal involvement in the exchanges with banque de france. last but not least, let me also advertise the new banque de france – tse senior and junior prizes in monetary economics and finance which purpose is to distinguish outstanding contributions by academics. the first prizes will be awarded for the first time on 16 march 2012. in the