: we should not forget that some citizens paid high entry costs to enter previously closed professions, for example by purchasing expensive licences, and may now need help transitioning to new employment. product market reforms have generally aimed at improving competition in network industries – energy, telecommunication, transport – and highly regulated professions, as well as reducing administrative ( licencing ) burdens to wholesale and retail trade and provisions of services. such reforms have tended to face greater implementation obstacles than labour market measures, partly owing to the micro or sector - specific dimension of the reform needs. blanchard, o., f. jaumotte, and p. loungani ( 2013 ), “ labor market policies and imf advice in advanced economies during the great recession ”, imf research department. bis central bankers ’ speeches this has required policymakers to confront more concentrated opposition from vested interests within the sector that is subject to reform. however, among programme countries, portugal has some impressive achievements to show in terms improving product market functioning and economic framework conditions. these have included the change of competition law and the regulatory framework, the reform of the judicial system, and the reform of regulated professions and of the housing market. finally, programme targets for privatisation were achieved ahead of time. structural reforms need a long - term commitment as i said at the start of my remarks, an improvement of the underlying prospects for these economies has moved expectations. perceptions about the sustainability of the recovery path in portugal, in particular, have been reflected in persistent improvements in confidence and associated reductions in risk premia. over time the economic and social pay - offs of reforms will be high, in terms of higher wealth and employment. high and sustainable gdp growth will in turn bring about improvements in fiscal positions and sizeable reductions in debt - to - gdp ratios in the medium to long - run, contributing therefore to long - term debt sustainability. however, to reap these benefits implies a long - term commitment. the reform process is a continuum. a reform that has just been legislated does nothing for the citizens of a country, if it is not followed - up with effective implementation. making sure that reforms transfer from the statute book to the real economy requires painstaking monitoring, as well as a prompt reaction in case outcomes deviate from expectations. when countries exit adjustment programmes, such an orientation will help prove to markets that reforms have been undertaken not only due to external pressure, but also out of a genuine recognition of their benefits. this is the

this regard, rather than our profit and loss statement, is the financial solidity of central banks ’ balance sheets through their levels of capitalized reserves. the effect on banks ’ net interest income nevertheless, if opposite in sign to the one under negative rates, could also distort the transmission of our monetary policy. just as we did with the tiering scheme, we have to think about a reserve remuneration system adapted to this new context, as the ecb announced it in our july decisions. we will conduct this assessment in a swift and pragmatic way, looking at various options having existed across history and across jurisdictions. * * the high uncertainty in which we must at present navigate the normalization of monetary policy means that we will have to artfully deal with the unexpected. perhaps however, accepting this uncertainty is, if not what science is typically associated with, at least what rationality commands. voltaire said, “ uncertainty is not a pleasant condition, but certainty is absurd ”. xii two hundred years later, bertrand russell wrote that “ not to be absolutely certain [ is ] one of the essential things in rationality ”. xiii i am glad we still need science, including on the new challenges i stressed, to reconcile uncertainty and rationality. blanchard ( 2006 ). garnier ( 2022 ), presidential lecture at the french economic association. iii rostagno et al. ( 2021 ). iv see savignac, gautier, gorodnichenko and coibion ( 2021 ) for first results on a new survey conducted by the banque de france on expectations of french firms. v see coibion gorodnichenko kumar ( 2018 ), coibion gorodnichenko ropele ( 2020 ), and rosolia ( 2021 ) for the few papers that seek to empirically assess the effect of inflation expectations on pricesetting. vi see werning ( 2022 ) for recent advances on these questions from a theoretical perspective. vii brunner ( 1981 ). viii brainard ( 1967 ). ix dupraz guilloux - nefussi penalver ( 2020 ). x see cukierman ( 1991 ) and stein and sunderam ( 2018 ). xi see weidmann ( 2022 ), jacobsson lecture, for a recent articulation of this idea. xii in a letter to frederick ii, king of prussia, on april 6, 1767. xiii russell ( 1947 ). i ii