industry ( rhs ) and what is driving investors to invest in serbia? importance of structural reforms is clearly confirmed through reforms we imposed. from the central bank perspective, the most important and hardest was to provide price stability and regain trust in monetary policy, due to hyperinflation in the past. and during the last half a decade inflation in serbia has been kept under control. according to the global competitiveness index, inflation in serbia is no longer a limiting factor for doing business ; as was the case for example back in 2010. on the contrary, a low inflation environment is perceived as one of the key factors of a stable business environment in our country. further, relative stability of the exchange rate, the mentioned results on the fiscal front, as well as in many other areas as part of stabilisation agenda, are perceived as vital for fdi attraction. this is all confirmed by many studies, such as world bank study from 2018 showing that countries with lower exchange rate and inflation volatility had higher fdis in terms of gdp. not to forget, in terms of fdis attraction, of outmost importance is also political stability. the same is assessed by moody ’ s rating agency in their latest yearly report, stating that serbia clearly ranks above the countries with the same rating, when it comes to political stability and government effectiveness. in such environment foreign investors are rather reinvesting their profit in serbia, than sending it back. on average – around 60 % of profit is being reinvested. what is ahead of us? i believe that the integration in infrastructure flows, the latest technological projects and innovations, in line with our potentials, are the basis for serbia ’ s growth. at the same time, this is the basis for investment. and our potentials are geographic position and work force. anyone offering a partnership in this context is welcome. it is up to us to provide macroeconomic stability and equal treatment for all investors. we do not have the privilege or the reason to measure this by any other criterion, but the interest of our citizens in better living standards and sustainable growth. and investments diversified by country and branch, are the guarantee to the achievement of our goals which are written in all the preambles of the most reputable and the most significant international institutions. of course, we can always do more. each one of us present here. therefore, allow me to quote a message stated in the joint conclusions : “ across the region, further efforts are needed to tackle

the policy interest rate. 8. monetary policy has embraced the taylor rule so firmly that there has been an intense debate in the wake of the crisis on the policy stance of the us fed vis - a - vis the taylor rule. some analysts used the taylor rule to argue that the fed funds rate, even at this historically low level, was not low enough and made out a case for doing a lot more to stimulate the economy. prof. taylor himself weighed in on the issue suggesting that those analysts were not applying his rule correctly. he contended that, quite to the contrary, his measure shows just the opposite : that the fed policy is appropriate, the policy rate cannot remain low for too long, that central bankers are right to be considering withdrawal of their unprecedented monetary stimulus, and that critics who say otherwise are misinterpreting his rule. according to him, the formula is designed to show the best rate for spurring growth without stoking inflation. 9. if the taylor rule is so time tested in prescribing the policy interest rate, it is legitimate to ask what role there is left for central bankers. i do not have a simple answer for this ; perhaps prof. taylor does. i do have a complex and somewhat longish answer and here it is. 10. for my long and complex answer, it is necessary to refer to the interesting debate on whether economics can be a deterministic and exact science like physics. indeed, some people argue that one of the great follies of economics – the reason it often lost direction, if also credibility is because it had pretense to being like physics. i have no intention of getting into that debate, but in the context of the taylor rule, i can ’ t resist the temptation of drawing upon a comparison of economics with physics, if at an altogether different level. 11. sir isaac newton gave us the three laws of motion and the law of gravity. the mathematical formulation of these laws embodies a complete description of the universe. all you need to specify are the initial conditions and using newton ’ s laws, you can calculate the state of the universe for eternity with absolute determinism. this is classical cartesian reductionist framework in its quintessence. people, therefore, asked, if god has decided on the laws and decided on the initial conditions, he has determined the course of the universe for eternity. besides, he gave us newton to let us know of the laws so that we