broken down by activity ; detailed information on the ownership of deposits ; information on the holders of government paper ; information on tax yields, import breakdowns, agricultural yields, etc, etc. we should mine this data for practical insights about how our economy works. we need to address the data with a variety of parametric techniques, ranging from charts and tables to econometric modelling, and covering the whole gamut of tools and approaches. we should avoid over - emphasis on technique, and we must devote more resources to structural models of the economy, such as the central bank still employs for forecasting, and less to simplistic models which reduce complex economies to a handful of equations. we need to be flexible in our approaches, and to develop a greater humility in our analysis. we must stop saying that this or that theory has been “ proven ”, or this or that policy has “ worked ”. in the physical sciences, where they actually have methodologies that can prove things, they acknowledge that the proof is valid only until evidence that contradicts it emerges ; proofs in the physical sciences are not forever. in economics, where we have no tools to prove anything, we are too fond of ex cathedra pronouncements. we must stop saying that the world is what our theory tells us, and learn to see things as they really are. there is exciting new research in economics which draws on the knowledge and insights of other disciplines, including finance, psychology, ethics, law, cognitive sciences, and others. hopefully we will also see a resurgence of interest in philosophy and epistemology. we should all seek to broaden our own research into areas such as these in search of useful insights and guidance for policy. in the case of the central bank, i hope this will be reflected in increasing contributions to this seminar from members of all departments of the bank, not only the research department, and in joint research that crosses disciplinary boundaries. these are exciting times for economics, and for economists and central bankers. we have a chance to contribute to the changes in approach to research and analysis for policy, we have a rich store of data from which to draw insight, and relevant analytic expertise is increasingly spread across the bank, and in disciplines outside of economics. let us maintain our focus on policy, and let us draw on the knowledge and expertise of our colleagues throughout the bank, and in related disciplines, to help in the search for deeper insight into our evolving economies.

of 1929. in 2008 the world featured a network of shared information and finance, with instantaneous links right around the globe, and billions of ordinary people were involved directly in financial transactions, from small individual depositors and mortgagees to giant financial conglomerates. in 1929 only a handful of people in industrial nations were involved with financial institutions in any way, and the average worker who found himself on the breadline would have had no notion whatsoever of the cause of his sudden unemployment. we live in a completely different world, and it is hard to understand why we would expect modern economies to behave as the economies of the early 20th century did. the moral of this story is that, although empirical tests are fundamental to good economic practice, we must be conscious of the assumptions we make, and qualify our inferences accordingly. because our methods and data are so lacking in robustness, economists need to approach their work like good detectives, digging deep behind the numbers for explanations and clues. we need to practise forensic economics, disaggregating totals to search out the components, and incorporating local knowledge of each economic activity, especially the insights of the real people who are out there buying and selling goods and services. the central bank is well equipped to do such analysis, using the impressive archive of monthly, quarterly and annual data that we have collected over 35 years or more. i believe we are on the cusp of the emergence of a new paradigm in economics. we are not yet clear what the new paradigm will look like. the most intriguing suggestion i have come across is the notion that the economy evolves according to the same laws that govern biological evolution. there are other notions abroad, such as the replacement of the evasive economic concept of “ welfare ” with “ happiness ” as the objective of economic transactions. in spite of the uncertainty about the future path of our discipline, there are some indications of how we need to improve economic practice, and we have already taken first steps in the right direction. many years ago muriel saunders and i did a detailed study of the provision of government services, and the budgetary cost of providing services. sadly, it is the only study of its kind that i know of in the caribbean. updates and similar studies are urgently needed ; they are of practical importance, and can serve to inform priorities in the allocation of government expenditure, especially important in these difficult times. we have rich troves of data on household and company credit, including maturities and interest rates,