2  BIS Review 105/2007  The second of David's open issues – whether central banks should lean against possible asset price bubbles – was the key topic in my discussion here eighteen months ago, at Otmar's festschrift. My answer then is my answer now.
A central bank should focus on the outlook for the macroeconomy and generally relegate asset prices to the subordinate role of inputs to the forecast process. I view this as the simple application of humility that David and I find so admirable.