will be affected in different ways by monetary policy easing. this observation has led some people to draw hasty conclusions on the effects of monetary policy on inequality. under benjamin ’ s framework, however, the savers versus borrowers split is only one of the many dimensions of heterogeneity which characterise the data. other important dimensions are related to households ’ holdings of liquid assets and their ability to borrow, both of which enable them to absorb the impact of temporary income shocks. in addition, the borrowers versus savers difference is not crucially important if the indirect channel plays a dominant role in the transmission of monetary policy. the framework ’ s capacity to model interactions between heterogeneous households and the macroeconomy in the way i have just described hinges on benjamin ’ s innovative and extensive work on mathematical and computational methods to solve models in continuous time. as these techniques have substantially enhanced the set of economic problems that we are able to address, we are now able to rapidly solve and analyse models that have realistic and quantitatively important features, such as illiquid assets and adjustment costs. in addition to analysing the monetary transmission mechanism, the continuous - time solution techniques benjamin pioneered can be used to study a wide range of economic questions. for example, benjamin and his co - authors2 recently investigated which theories can explain the substantial rise in inequality in the top tail of the us income distribution in the 1980s and 1990s. while most established theories have difficulties in accounting for this development, theories allowing for “ superstar ” phenomena are consistent with it. superstar phenomena arise, for example, when changes in technology make it possible for entrepreneurs or managers who are a little better than others at any given task to capture a much higher share of the market and of income. i have spent much of my time today talking about the aspects of benjamin ’ s work that are particularly relevant for monetary policy. however, he has expanded our knowledge in an impressive range of other areas which i did not have time to discuss, including determinants of incomes across countries, the allocation of resources, human capital accumulation, and saving and wealth inequality. please join me in congratulating benjamin on receiving the 2018 bernacer prize. benjamin, i wish you continued success and look forward to following your future work. 2 / 3 bis central bankers'speeches 1 for a seminal contribution to this topic, see : kaplan, g., moll, b. and violante, g. l. ( 2018 )

payments would be offered by the eurosystem at full cost recovery. as this is a pressing topic, the aim of the investigation is to reach a decision on whether to go ahead with this by the end of the first quarter of 2017 in order to not delay the go - live of announced market initiatives. 3. eurosystem collateral management system as the euro area ’ s banking and financial markets become increasingly integrated, demand for more efficient collateral management arrangements within the eurosystem central bank community is increasing. to date, collateral management in the eurosystem is rather fragmented as each national central bank has its own procedures and systems in place. as a consequence, some collateral management services are not provided in a fully harmonised manner. as we look to the future, the eurosystem will strive to drive harmonisation forwards, particularly regarding eurosystem operations for the mobilisation of marketable assets, as well as the handling procedures for non - marketable assets, which still vary across the central banks. furthermore, the eurosystem will investigate, throughout 2017, the business case for and the scope and cost of a possible common eurosystem collateral management system for managing eligible assets used as collateral in the eurosystem credit operations. conclusion the three components of the eurosystem ’ s strategy for the evolution of its market infrastructure 2 / 3 bis central banker's speeches are interconnected, such as shared software components, shared network infrastructure, shared hardware components, the use of the future market infrastructure single gateway. at the end of the investigation into the business case for and the scope and cost of each one, a decision will be taken as to whether they will be developed into projects with different durations. you may rest assured that throughout the investigation and decision, we will live up to the treaty and our mandate. thank you. 3 / 3 bis central banker's speeches