macroeconomics courses, the united states is not a closed economy but is one of many nations engaged in global finance and economic commerce. professor obstfeld ’ s paper examined the ways that global economic integration affects inflation and the neutral rate of interest — or r * — and the role played by the u. s. dollar in transmitting the federal reserve ’ s monetary policy to other countries. in our final session yesterday, professors cecchetti and schoenholtz assessed the federal reserve ’ s communication practices. based on interviews and conversations with market participants, academics, and former policymakers, professors cecchetti and schoenholtz offered concrete suggestions for improving our most important communications vehicles. our program today will feature papers by lars svensson on alternative monetary policy strategies, by eric sims and cynthia wu on the policy toolkit, and by anil kashyap and caspar siegert on the interplay between financial stability considerations and monetary policy. our featured panel of national and community leaders moderated by president rosengren will i ’ m sure offer valuable perspectives about how the monetary levers we pull and push affect communities, credit availability, and small businesses. 1 / 2 bis central bankers'speeches aside from being an intellectually stimulating two days, how does this week ’ s conference fit into the fomc ’ s review of its monetary policy strategy, tools, and communications? let me describe briefly how the review is structured. over the past several months, the individual reserve banks have been hosting a series of fed listens events — seven so far including this conference — with at least five more to follow in coming months. each event is organized with a format and list of participants that works best for that district but with two common elements : that fed officials do most of the listening and that, when feasible, the events be live streamed. in dallas, we heard from local leaders about the challenges facing lower - income communities. in minneapolis, we listened to researchers discuss the distributional consequences of the economic cycle and of monetary policy. in boston, we heard from small businesses, labor leaders, and groups that work in underserved communities about the effects of the fed ’ s policymaking on new england residents. in camden, new jersey, we learned about the workforce training initiatives of a local manufacturing firm. in richmond, a panel of local business and community leaders discussed the ways the fed ’ s monetary policy affects the regional economy. in new york, panelists representing labor

concluding remarks ”, 222. bis central bankers ’ speeches today, there is reason to believe that the stability of the currency and of prices depends on the expectations of economic agents. these expectations are formed on the basis of such elements as the clarity and certainty of the rules of money creation and the reliability and credibility of the institutions managing it. the establishment of a culture of monetary stability is crucial for this to become a virtuous circle. luigi einaudi believed that money was a contract between economic agents and that its stability had to be built by educating them. as a young economist, in 1905 he undertook the translation into italian of walter bagehot ’ s lombard street, 6 the classic anglo - saxon text on monetary stability, certain that it would be effective also in forming public opinion. as governor he invented the medium of the concluding remarks to speak to the italians, not just to the experts. faced with the pernicious inflation route, in 1947 he claimed it was the right and the duty of the senior management of the bank of italy to issue “ a cry of warning ”, while at the same time loudly avowing that “ it is a road we shall not take. ” 7 in the last half century the bank of italy has indeed maintained this commitment to educate and inform with the publication of research papers by the economic research department, public talks by senior management, and not infrequent contacts with universities and with the new generations. tommaso padoa - schioppa explained, sixteen years ago, that a central bank contributes to monetary stability also through “ a constant effort of information, education, and clarification that is part and parcel of defending the value of the currency. ” 8 nowadays, the central banks know that effective communication and widespread understanding of monetary matters are essential for the success of their monetary policy strategy. the eurosystem is committed to informing the markets and the public about how it thinks, decides and acts. this is also a way of keeping price expectations stable over the medium - to - long term. now that monetary stability no longer hinges on the amount of precious metal available in the system, it relies on the credibility and technical expertise of the central banks. but the latter are powerless if the value of stability is not firmly ingrained in the collective consciousness. the objective of the exhibition we inaugurate today, and of the permanent museum that will later take its place, is to help entrench this value, which is a common,