the 2006 digest of education statistics published by the u. s. department of education ( 2007a ). http : / / nces. ed. gov / programs / digest / d06 / ch _ 6. asp more information on the early childhood research collaborative and copies of its research papers can be obtained from the website of the federal reserve bank of minneapolis, www. earlychildhoodrc. org. learning is a daunting task. i will make only a few observations on the goals we should keep in mind as we explore ways to improve learning at the elementary and secondary levels. first, we should encourage experimentation and innovation. by my reading, the research on k - 12 education has, to date, yielded no easy answers to the questions of how to raise academic achievement and how to ensure that students finish high school well prepared to move on to more advanced study. a wide range of approaches has been and is being explored : smaller class size, school choice, charter school programs, accountability standards, flexibility in teacher certification rules, better teacher pay, merit - based pay, yearround schooling – the list is long and probably will get longer. the size and diversity of our country, together with the fact that state and local policymakers retain significant discretion over how to structure their educational systems, provides us a natural laboratory for assessing the effectiveness of alternative educational strategies. i view the debate about what works and what doesn ’ t to be a crucial part of discovering cost - effective ways to improve our educational system. the business community has an obvious interest in how well our schools prepare students for a future in the workforce and should actively participate in the debate. but we all have a stake. students at the elementary and secondary levels are being prepared not just for work but for life. such skills and acquired traits as critical and creative thinking, social ability, persistence, and satisfaction in accomplishment make not only good employees but good citizens as well. exposure to the arts and culture and experience in serving the community can help support the development of these broader, harder - to - measure skills, alongside more readily measurable cognitive accomplishments in reading, math, and science. second, teacher quality is critical. studies show that student performance depends on putting high - quality teachers in the classroom and retaining them as long as possible ( aaronson, barrow, and sander, 2007 ; rivkin, hanushek, and kain, 2005 ; rockoff, 2004 ). indeed, many initiatives focus on linking

the 2002 – 06 period were accompanied at various times by “ forward guidance ” on policy from the committee. for example, beginning in august 2003, the fomc noted in four post - meeting statements that policy was likely to remain accommodative for a “ considerable period. ” 2 the aggressive monetary policy response in 2002 and 2003 was motivated by two principal factors. first, although the recession technically ended in late 2001, the recovery remained quite weak and “ jobless ” into the latter part of 2003. real gross domestic product ( gdp ), which normally grows above trend in the early stages of an economic expansion, rose at an average pace just above 2 percent in 2002 and the first half of 2003, a rate insufficient to halt continued increases in the unemployment rate, which peaked above 6 percent in the first half of 2003. 3 second, the fomc ’ s policy response also reflected concerns about a possible unwelcome decline in inflation. taking note of the painful experience of japan, policymakers worried that the united states might sink into deflation and that, as one consequence, the fomc ’ s target interest rate might hit its zero lower bound, limiting the scope for further monetary accommodation. fomc decisions during this period were informed by a strong consensus among researchers that, when faced with the risk of hitting the zero lower bound, policymakers should lower rates preemptively, thereby reducing the probability of ultimately being constrained by the lower bound on the policy interest rate. 4 in january 2004, the committee expressed an intention to be “ patient ” regarding the removal of monetary policy accommodation. in may 2004, a month before the committee began to increase its target for the federal funds rate, it said that accommodation was likely to be removed at a pace that would be “ measured. ” for discussions of the potential benefits of such communication, particularly in the face of possible deflationary risks, see eggertsson and woodford ( 2003 ) and woodford ( 2007 ). many saw the relatively weak recovery as reflecting a “ capital overhang ” left over from the rapid pace of investment in information technology during the boom. according to this view, the capital overhang both inhibited new capital investment and, by leading to ongoing productivity improvements, also limited the need for employers to add workers to meet the relatively moderate increases in final demand that were forthcoming. as noted in the text, geopolitical uncertainties as well as corporate scandals added to the uncertainties faced by employers