alan greenspan : globalization remarks by mr alan greenspan, chairman of the board of governors of the us federal reserve system, at the institute for international economicsa€™ inauguration of the peter g peterson building, washington, 24 october 2001. * * * i am pleased to be with you tonight as the institute for international economics dedicates this extraordinary new building. i am also pleased to note that you are celebrating your twentieth year in the business of thinking critically about vital international economic issues. it hardly seems that long. before the tragic events of september 11, discussions of the international economy had increasingly come to be centered on issues related to the growing integration of our economies. the strife we had witnessed over economic globalization was the twenty - first century's version of debates over societal organization that go back at least to the dawn of the industrial revolution, and many of the intellectual roots of those debates go back far longer. there has been a simmering down of the more vociferous protests against globalization since september 11. but the debate surrounding the increasing cross - border integration of markets inevitably will be rejoined. the issue elicits such strong reaction because it centers on the important question of how economies are organized and, specifically, how individuals deal with one another. globalization as generally understood involves the increasing interaction of the world's peoples through their national economic systems. of necessity, these economic systems are reasonably compatible and, in at least some important respects, market oriented. during the past half - century, barriers to trade and to financial flows have generally come down, resulting in a significant broadening of world markets. expanding markets, in turn, have enhanced competition and nurtured what joseph schumpeter called " creative destruction, " the continuous scrapping of old technologies to make way for the new. standards of living rise because the depreciation and other cash flows of industries employing older, increasingly obsolescent, technologies are marshaled, along with new savings, to finance the production of capital assets that almost always embody cutting - edge technologies. this is the process by which wealth is created incremental step by incremental step. it presupposes a continuous churning of an economy in which the new displaces the old. the process is particularly evident among those nations that have opened their borders to increased competition. through its effect on economic growth, globalization has been a powerful force acting to raise standards of living. more open economies have recorded the best growth performance ;

criterion laid out in the committee ’ s guidance. while no decisions were made, participants generally view that, so long as the recovery remains on track, a gradual tapering of our asset purchases that concludes around the middle of next year may soon be warranted. it is important to note that any future decision the committee might make with regard to the pace of asset purchases will not be intended to carry a signal about the timing of a future decision to raise the target range for the federal funds rate, a policy decision for which we have articulated a different and substantially more stringent test. as we reaffirmed in september, we continue to expect that it will be appropriate to maintain the current 0 to 1 / 4 percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee ’ s assessment of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. at least half of the 18 fomc participants in their summary of economic projections ( sep ) submissions projected that these necessary threshold conditions for liftoff will be met by december 2022, and all participants but 1 project that these conditions will be met by december 2023. 5 these projections are entirely consistent with the new monetary policy framework adopted unanimously by the committee in august 2020. 6 in the context of our new framework, as i have noted before, while the effective lower bound ( elb ) can be a constraint on monetary policy, the elb is not a constraint on fiscal policy, and appropriate monetary policy under our new framework, to me, must — and certainly can — incorporate this reality. indeed, under present circumstances, i judge that the support to aggregate demand from fiscal policy — including the nearly $ 2 trillion in accumulated excess savings accruing from ( as yet ) unspent transfer payments — in tandem with appropriate monetary policy, can fully offset the constraint, highlighted in our statement on longer - run goals and monetary policy strategy, that the elb imposes on the ability of an inflation - targeting monetary policy, acting on its own and in the absence of sufficient fiscal support, to restore, following a recession, maximum employment and price stability while keeping inflation expectations well anchored at the 2 percent longer - run goal. 7 thank you very much for your time and attention. i look forward, as always, to my conversation with tim. references ahn, hie joo, and chad fulton ( 2020 ). " index of common inflation expectations, "