shocks, both at the macro and the micro level, crystallise into permanent institutional arrangements that put downward pressure on the effective retirement age and, hence, undermine future governments'capacity, if not to ward off the ageing crisis, then at least to soften its impact. if we do not want the famous lisbon objectives to become just a slightly offbeat alternative scenario in our projections, rather than realistic targets, then, clearly, more action is needed in these areas. all in all, it is essential that policy makers fully understand that the window of opportunity that we have now, will not last forever. we should be aware of the fact that we still have a lot of convincing to do. earlier on i have likened the ageing problem to an earthquake. contrary to a regular earthquake, however, we can predict almost exactly when and where it will hit us. in addition, the quake will not take the form of a big bang but will reach its full impact only very gradually : its disrupting ripples will be felt throughout the following decades. and although it is hard to give precise estimates of the amount of damage that it will do, this is the kind of earthquake that is certain to shake the very foundations of our modern welfare states. it is our task, as economic researchers, policy advisors and, ultimately, policy makers, to make sure that, by the time ageing really starts to kick in, these foundations can withstand the blow. i firmly believe that conferences like this one bringing together a host of distinguished researchers from both sides of the atlantic are a crucial step in reaching this objective.

co2 price at the socially optimal level, monetary policy would not have any additional role to play. and if authorities were to set the price too low, changing this price through monetary policy would be tantamount to correcting a policy failure, which is controversial. once again, unelected policymakers cannot legitimately make choices with first - order redistributive implications. as soon as one recognises that fighting climate change implies trade - offs, there is a very fine line between supporting policy and making policy. conceptually, one would need to change the nature of the trade - off, with more efficient instruments than those available to policymakers, to be on safer grounds. but this is unlikely to be the case for the reasons i just explained. finally, monetary policy faces a communication challenge when dealing with climate change. many people believe that central banks are just another kind of bank providing credit to the economy. but they are not. it is therefore crucial to avoid creating expectations that central banks can finance the energy transition. fiscal - monetary policy interactions another issue at the frontier of discussions around central bank mandates is the relationship between monetary and fiscal policies. i have already made some key points when discussing the role of the policy mix during the covid19 pandemic, but i ’ d like briefly to elaborate on a few more general considerations. since the 1990s, granting political independence to central banks, along with a well - defined mandate to achieve price stability, has been one of the most widespread and successful institutional reforms in the world. it brought macroeconomic stability that was sorely lacking during the 1980s. the core idea is simple and intuitive. to avoid inflationary monetary policy, it makes sense to keep the insatiable appetite of governments for spending well separated from a creditor with potentially infinitely - deep pockets and offering very generous funding terms ( zero interest ). it remains that even if they live separate lives, monetary and fiscal authorities are tied by the intertemporal budget constraint of the consolidated public sector. the question then becomes : who will ultimately assume responsibility for fulfilling that budget constraint? if monetary policy is to be credibly assigned to preserving price stability, then the treasury must assume the sole responsibility for sticking to the budget constraint. this is sometimes known as ensuring a regime of monetary dominance, and it explains why many governments ( in europe and elsewhere ) have committed to specific fiscal rules banning excessive deficits and debts. the opposite situation, in which the central bank is forced to