The conclusion is that however good the decisionmaking material is, it can never be comprehensive or unequivocally interpreted. I have mentioned previously that developments in the financial sector and the effects on the real economy cannot be easily captured. I have also, in connection with the discussion on household borrowing, mentioned how we can assess effects in the longer term. Since we cannot make meaningful forecasts for an unlimited period of time, we must restrict the forecast horizon. But this is not set in stone in the sense that it should prevent us from considering problems that may arise in a few years’ time. Moreover, there are risk scenarios that are difficult to capture in terms of forecasts. Even if your ambition is to base the monetary policy decision on what are termed unbiased forecasts, in which upside and downside risks are balanced, you should be aware of the  10  For a description of how decision-making data for monetary policy decisions are prepared, see the speech “The monetary policy decision-making process” by Irma Rosenberg held on 13 June 2008. BIS central bankers’ speeches  9  difficulties involved. In practice, however, such forecasts have difficulties in capturing everything perfectly. In practice, you may wish to guard against some outcomes that you consider to be particularly harmful and that should therefore be avoided at all costs.
Rather, she is impressively balanced and fully aware, at least in my opinion, that her legacy will be whether she can successfully complete Act V by realizing the Fed’s mandate to maintain price stability while providing the monetary means to achieve full employment. All of which means that despite the mighty efforts of Captains Bernanke and Yellen and their officers and crew, present company included, we do not know how “The Grand Experiment” drama will end. We certainly all hope it proves an inspiring history, not a tragedy. But, we will not know for some time. We will not know until the curtain drops on Act V. R.I.P? Betsy Duke had it right: Only when we have normalized monetary policy – only when the play is done – will we know if QE3 rests in peace or comes back to haunt us. Only when it is done will we know if “The Grand Experiment in Modern Monetarism” is a smash hit or a bomb or something in between. As Yogi Berra said and Lenny Kravitz sang: “It ain’t over till it’s over.” But one thing I know for sure: This speech is over. Thank you for listening. And now, Mickey, time and patience permitting, I would be happy to avoid answering any questions you and your colleagues might have.