moreover, the short - run implications for inflation and employment of a sustained pickup in productivity growth were ambiguous. staff analysis at the time supported brainard ’ s conclusion that the appropriate response to heightened uncertainty about the economy ’ s true william c. brainard ( 1967 ), " uncertainty and the effectiveness of policy, " american economic review, vol. 57 ( may ), pp. 411 - 25. productive potential would be to reduce the importance of the estimated output gap in setting policy. 8 whatever the persuasiveness of this analysis, the fomc did respond in a restrained manner to unusually robust real economic activity - as i believe was appropriate in light of the low and stable inflation that followed. of course, gradualism and model averaging may not be appropriate in all circumstances. for example, it may be necessary for monetary policy to respond to what might be called " tail events, " along the lines suggested by recent work on " robust control. " to simplify greatly, this approach often amounts to choosing policy settings to minimize the maximum possible loss across different models of the economy, in contrast to the standard bayesian approach, which ( loosely speaking ) seeks to minimize the average loss across models. much of the research on robust control has been a bit technical and esoteric. but the notion that policymakers may at times base policy settings on especially pernicious risks has an important ring of truth. for example, in 2003 the fomc noted that a continued fall in inflation would be unwelcome largely because such an eventuality might potentially lead to persistently weak real activity with interest rates stuck at zero. partly in response, the fomc reduced the federal funds rate to an unusually low level and kept it there for an extended period, in a manner that perhaps would not have occurred in the absence of concerns about the " worst case " effects of deflation. this type of risk management - in which the central bank takes out some insurance against a bad but improbable event - has been an aspect of policymaking for some time and does seem to respond to extreme risks in a way reminiscent of the literature on robust control. 9 policymakers also seem to have absorbed another lesson from the recent literature, namely, the desirability of reducing the public ’ s uncertainty about how the central bank will respond to changes in economic conditions. to this end, central banks now strive to conduct policy in a predictable ( albeit flexible ) manner that is consistent with their stated objectives

their remarkable support in collaborating with sbp for organizing this event. fao has long played a strong role for the development of agriculture sector in pakistan through introduction of innovation and technical assistance and this event is a mark of their continued commitment to the cause of developing an exceedingly vibrant agriculture sector in pakistan. i am also grateful to ukaid for their continued and long - term support to advance financial inclusion in pakistan. let me also express our gratitude to asia - pacific rural and agricultural credit association ( apraca ) for the importance and attention that you always give to pakistan and sbp in the regional initiatives. ladies & gentlemen, 13. i wish you all a pleasant participation in the conference and hope that this experience will invigorate the spirit of transformation that challenges the conventional beliefs and fosters innovative thinking to find lasting solutions to the problems of agriculture - financing. thank you our chief guest senator muhammad ishaq dar, finance minister, and the guest of honour federal minister mr. sikandar malik bosan, and all the participants and speakers! bis central bankers ’ speeches