Sadly, however, models and theories are descriptive views on how the world is working, and not prescriptive views on how the world should work. Financial markets will inevitably deviate from what could be inferred from models, theories, and past patterns of market prices.
*  *  *  I wish to thank my colleagues at the Reserve Bank whose research on the labour market I have drawn upon in preparing these remarks, and in particular Miles Parker and Evelyn Truong. References can be found in the footnotes. Introduction Thank you for inviting me to speak today.