We are particularly poor at the open economy issues.
Domestic inflation reflects domestic monetary policy.
My theme this evening is that America needs a competitive dollar.
The more competitive value of the dollar turned around the trade deficit.
First, I think the science of monetary economics has clearly gotten better.
A second reason why science cannot replace judgement is the behavior of financial markets.
Inflation is lower and more stable and the real business cycle fluctuations are more modest.
I think that over the last few decades, we have seen better economic outcomes than in the past.
The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.
And finally, no matter how good the science gets, there are problems that inevitably depend on judgement, on art, on a feel for financial markets.