I can think of no better way to celebrate the signal contributions of this leading force in the world of monetary policymaking than to address an issue of great importance to central banks, and one that has drawn considerable public attention and comment of late--namely, the proper role of asset prices in the determination of monetary policy.
Otmar and I have debated this issue on many occasions, and these discussions--together with recent research carried out at the European Central Bank, the Bank for International Settlements, and elsewhere--have been both challenging and stimulating. The preparation of this talk has afforded me a welcome opportunity to reexamine my thinking on this subject.