Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.

The more important reason is that the research itself provides an important long-run perspective on the issues that we face on a day-to-day basis.

A meritocracy is a system in which the people who are the luckiest in their health and genetic endowment; luckiest in terms of family support, encouragement and, probably, income; luckiest in their educational and career opportunities; and luckiest in so many other ways difficult to enumerate - these are the folks who reap the largest rewards.

Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling.

The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.

The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.

With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.