luis m linde : profile of professor nicholas bloom – winner of the xii german bernacer prize opening remarks by mr luis m linde, governor of the bank of spain, at the xii german bernacer prize ceremony, madrid, 24 september 2013. * * * ladies and gentlemen it is a great pleasure for me to introduce this award ceremony for the 12th german bernacer prize. first of all, let me once again thank the organizers and sponsors of the prize. they have established an excellent programme to support economic research in the fields of macroeconomics, monetary policy, and financial economics. this is the 10th time that the bernacer prize award ceremony has taken place at the banco de espana. the continued support and backing of this initiative of the observatory of the european central bank by the banco de espana is justified by its conviction of the importance of macroeconomic research, insofar as it concerns the functions to be performed by the european system of central banks. by recognizing the relevance of a prize like this, which has been awarded, in every instance, on the basis of academic excellence, the banco de espana reaffirms its commitment to economic research. as many of you know, this prize commemorates a distinguished spanish macroeconomist who worked at the banco de espana, as director of its research department, during the 1930s. despite the isolation of the spanish economics profession at that time, german bernacer obtained substantial international recognition for his research contributions. in this edition, to the very illustrious list of previous winners of the german bernacer prize, we add, with all due merit, professor nicholas bloom, a british economist, who is today professor in the economics department at stanford university. professor bloom graduated in economics from cambridge university, obtained his masters at oxford university and his ph. d. at university college london. he has been awarded the 2010 frisch medal of the econometric society, is a fellow of the american academy of arts and sciences and an associate editor of, among other journals, econometrica and the quarterly journal of economics and management science. he has published many articles on economic and management issues in top journals, including the american economic review, econometrica and the quarterly journal of economics. professor bloom ’ s two main areas of research are macroeconomic uncertainty and firm organization and productivity. in the first area, his main contributions are to show that macroeconomic uncertainty increases substantially in the aftermath of significant shocks. he also shows that during

, accountability and predictability, which are the main principles of the inflation - targeting regime. this press release aims to review the strategic as well as the operational framework of monetary policy in light of the first year ’ s experience and to lay down the principles for 2007. in the first part of the text, the general framework of monetary policy will be presented, and in the second part exchange rate policy and liquidity management issues will be considered. inflation targets inflation targets will continue to be defined as the end - year rate of inflation calculated by the annual percentage change of the consumer price index ( cpi ) in the upcoming period. in the press release regarding the monetary and exchange rate policy for 2006, the target horizon was set as three years and this time frame will be preserved for 2007. taking into account the structural transformation of the economy, the transition from chronic high inflation to low inflation, and the process of convergence to the developed countries, a target of around 4 percent is considered appropriate for the medium - term. therefore, inflation targets for 2007 and 2008, which were previously announced as 4 percent, are maintained and the inflation target for 2009, which was scheduled to be announced at the end of this year, has also been determined as 4 percent. as the structural transformation and convergence process is completed in time, it will be possible to target lower inflation rates. uncertainty band in article 42 of the cbrt law it is stipulated that “ the bank shall submit information to the government in writing and inform the public disclosing the reasons for the incapability to achieve the determined targets in due time published or the occurrence of the possibility of not achieving and the measures to be taken thereof ”. however, it does not specify the size of the deviation from the target that will require such an explanation. therefore, in order to clarify this mechanism and facilitate its operation, the central bank has set a symmetrical uncertainty band of 2 percentage points in both directions around the point target. it has been decided to keep the uncertainty band around the target at 2 percent for 2007 as well. the path consistent with the end - year target and the uncertainty bands defined for the end of each quarter of 2007 are shown in table 1. in case the figures go outside the band, the central bank shall submit a separate report to the government disclosing the reasons for the deviation and the measures to be taken for convergence to the target and share this report with the public. the path shown in table 1 will also be used as performance criterion for