Keynote Speech by Professor Carroll.

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On Feb 7, Professor Carroll gave a keynote speech at the symposium “Restoring Household Financial Stability After the Great Recession: Why Household Balance Sheets Matter” at the Federal Reserve Bank of Saint Louis. The theme of his lecture was that the Fed cannot properly carry out its responsibilities to stabilize the macroeconomy without a deeper understanding of the implications of microeconomic heterogeneity. He argued specifically that models that properly model household heterogeneity can have fundamentally different implications for policy analysis than “representative agent” models in which uncertainty, financial constraints, and balance sheet structures are irrelevant. The other keynote speakers at the conference were Federal Reserve Governor Jeremy Stein, and former Assistant Secretary of the Treasury for Financial Institutions Michael Barr.