House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.

I am confident that we will meet whatever challenges the future may bring.

Over the years, the U.S. economy has shown a remarkable ability to absorb shocks of all kinds, to recover, and to continue to grow. Flexible and efficient markets for labor and capital, an entrepreneurial tradition, and a general willingness to tolerate and even embrace technological and economic change all contribute to this resiliency.

Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.

It takes about two and a half percent growth just to keep unemployment stable.

If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression.

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.