christine lagarde : welcome address - ecb conference on monetary policy welcome address by ms christine lagarde, president of the european central bank, at the european central bank conference on monetary policy : bridging science and practice, frankfurt am main, 4 october 2023. * * * it is my pleasure to welcome you all to the 2023 ecb conference on monetary policy. the last few years have been an incredibly challenging time for monetary policymakers around the world. we have faced a succession of overlapping supply and demand shocks that have created a complex and fast - changing macroeconomic landscape. and as a result, we have seen a paradigm shift in monetary policymaking. where central banks in advanced economies once wrestled with overcoming the lower bound on interest rates, they have more recently been engaging in the fastest hiking cycle on record. but policymaking, by nature, operates in real time. we make decisions based on the best analysis and data at hand. however, it is exactly when rapid shifts in the macroeconomic environment occur that prior, unforeseen knowledge gaps are suddenly exposed. this is why policymakers – who are practitioners at heart – can benefit greatly from cutting - edge research. fresh insights and innovative approaches can go a long way in closing those knowledge gaps, helping policymakers to navigate this new terrain more effectively. that is why this conference is called " bridging science and practice " – because the issues we are discussing are truly those that are informing our policymaking. today's event captures four such topics. the first topic is how the transition from the low inflation regime, which prevailed before the pandemic, to the high inflation rates we are seeing today affected the pass - through of shocks. the papers to be presented over the next two days provide important contributions to that important debate. in particular, we will see evidence that the propagation of adverse supply shocks is nonlinear : when inflation is high, the propagation is stronger. and we will see how firms'pricing strategies can become state - dependent and make prices more flexible in response to large shocks. 1 / 3 bis - central bankers'speeches the second topic on which the conference focuses follows naturally from the first. with such a rapid shift in the inflation outlook, there has been an equally rapid shift in the stance of monetary policy. and this has raised questions about how best to calibrate policy when accommodation must be quickly withdrawn after a long phase of loosening. we will see research that highlights some of the challenges

framework to be robust to the complexity and uncertainty of this landscape. specifically, we have made our future decisions contingent on three criteria : the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. this framework has helped us chart a tightening path that began steeply and then slowed to a more normal pace. now, based on our current assessment, we consider that the key ecb interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to our medium - term target. our future decisions will continue to be based on these three criteria and they will ensure that the interest rates will be set at sufficiently restrictive levels for as long as necessary. i wish you a fascinating and productive conference. 3 / 3 bis - central bankers'speeches