was critical to develop sound policies. in response to these very challenging times, academia also reacted. since early 2020, we witnessed an explosion of applied research that incorporated the lessons learned in the 1 / 5 bis - central bankers'speeches last 35 years in terms of the importance of considering firm and household heterogeneity to better understand the transmission mechanisms of fiscal and monetary policies. this process of knowledge spillover from academia to policymaking is not something new. after every major economic crisis, in which policymakers needed to react with the toolkit available at the time, academia came out with new insightful developments that later became part of the available toolkit. this is the evolutionary process by which our profession grows. precisely for that reason, these bridges between academia and policymaking - like the conference we are kicking off - are so important and choosing the right topic at the right time is critical. in these opening remarks, i want to take the time to first review the main empirical and theoretical developments on the role of household and firm heterogeneity in macroeconomics, with a special focus on economic policy in the current macroeconomic context. i will then briefly review the current trends in central banking, including the central bank of chile, toward the use of more disaggregated models of the economy. to finalize i will walk you through the main contents of the conference, including the main takeaways from the research papers to be presented. 3. heterogeneity in macroeconomics heterogeneity is not something new in macroeconomics. we can trace it down to francois quesnay during the 18th century. quesnay conceived the economy as the interaction of three groups of agents : landowners ; workers ; and merchants, who differed in how productive they were for the economy. quesnay proposed to design tax policies that obtain more revenue from taxing the least productive agents or sectors, so to minimize the distortions in the production of sectors with more productive workers. since then, especially during the nineties, economists documented several puzzles in the behavior of households'consumption. for example, the results by deaton and carroll show that the ability of households to smooth consumption was imperfect and heterogeneous. this evidence challenged the predictions of models with complete markets and a representative agent. one of the main milestones in this literature in the early nineties was the development of economic models with uninsurable income risk and credit constraints that displayed rich cross

being the external organizer of this conference, as well as sofia bauducco and andres fernandez for putting together such a wonderful program. i also thank all the speakers and contributors and look forward to the conference volume that will be published thereafter. let me finish by thanking maria jose reyes, constanza martinelli, carolina besa, daniela gaete, alvaro castillo, and both the public affairs department and the economic research department of the cbc for all their invaluable help managing the logistics of organizing the first hybrid annual conference. thank you and have a fruitful discussion over the next two days. 5 / 5 bis - central bankers'speeches