##pating and, in some cases, reversing seems likely to play out in durables more generally. over the 25 years preceding the pandemic, durables prices actually declined, with inflation averaging negative 1. 9 percent per year ( figure 5 ). 9 as supply problems have begun to resolve, inflation in durable goods other than autos has now slowed and may be starting to fall. it seems unlikely that durables inflation will continue to contribute importantly over time to overall inflation. we will be looking for evidence that supports or undercuts that expectation. 3. wages we also assess whether wage increases are consistent with 2 percent inflation over time. wage increases are essential to support a rising standard of living and are generally, of course, a welcome development. but if wage increases were to move materially and persistently above the levels of productivity gains and inflation, businesses would likely pass those increases on to customers, a process that could become the sort of “ wage – price spiral ” seen at times in the past. 10 today we see little evidence of wage increases that might threaten excessive inflation ( figure 6 ). broad - based measures of wages that adjust for compositional changes in the labor force, such as the employment declines in used car prices would begin holding down 12 - month inflation once most of the earlier price increases have fallen out of the 12 - month window. the lower inflation in durable goods is probably due to a number factors, including faster productivity growth in durable goods than in services and globalization. if wages rise in line with inflation and labor productivity growth, then real unit labor costs ( or the labor cost of producing one unit of output ) to businesses are constant. wages may grow slower or faster than inflation plus productivity growth for extended periods because of changing structural factors without being reflected in inflation. ultimately, however, persistently rising real unit labor costs will put upward pressure on prices. - 7cost index and the atlanta wage growth tracker, show wages moving up at a pace that appears consistent with our longer - term inflation objective. we will continue to monitor this carefully. 4. longer - term inflation expectations policymakers and analysts generally believe that, as long as longer - term inflation expectations remain anchored, policy can and should look through temporary swings in inflation. our monetary policy framework emphasizes that anchoring longer - term expectations at 2 percent is important for both maximum employment and price stability. we carefully monitor a wide range of indicators of longer - term inflation expectations. these measures today are at levels

highly complex, and the right calibration is very important. therefore, economic research plays a crucial role in ensuring the success of the initiated reforms. this is particularly true of the design of procyclical capital buffers and surcharges for systemically important financial institutions. but of course there are many other very interesting strands of research, some of which have been covered at this conference. quite a few papers aim, for example, to create a deeper understanding of systemic risk and contagion mechanisms, which are surely key issues when it comes to dealing with future crises. in their paper “ structural estimation of systemic risk : measuring contagion in the sub - prime crisis ”, rigobon and his co - authors have developed a measure of international contagion which allows us to assess the role of systemic risk for the global economy. 4. conclusion ladies and gentlemen addressing the broader context of global developments which have contributed to the financial crisis and in particular the role which global imbalances have played, you have dealt with an interesting but also very complex issue at this conference. this question is far from being resolved, and i am sure that it will occupy researchers for quite some time to come. that is not less the case for those strands of research that deal with how to strengthen the financial system. seen in this light, times have seldom been as exciting for economic research as they are right now. i would like to encourage you to continue with your work and wish you much success. thank you for your attention.