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.

We are particularly poor at the open economy issues.

Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen for a year or more.

Domestic inflation reflects domestic monetary policy.

We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inflation.

After all, an overvalued dollar gives us the ability to buy foreign goods at lower prices. And the existing volume of exports brings more yen and euros than they would if the dollar were more competitive.

But then in April of 1985 the dollar began a sharp decline. The dollar's trade weighted value fell 23 percent in just 12 months and by a total of 37 percent by the beginning of 1988.

I think that over the last few decades, we have seen better economic outcomes than in the past.

Although economists have studied the sensitivity of import and export volumes to changes in the exchange rate, there is still much uncertainty about just how much the dollar must change to bring about any given reduction in our trade deficit.

First, I think the science of monetary economics has clearly gotten better.

But the primary reason for wanting the dollar to become more competitive in the near future is that we may need an increase in exports this year and in 2007 to sustain the economy's current pace of expansion.

The more competitive value of the dollar turned around the trade deficit.

Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.

A second reason why science cannot replace judgement is the behavior of financial markets.

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.

The price of imported oil in the US doubled between summer 2003 and summer 2005, reducing consumers' purchasing power by more than 1 per cent of gross domestic product.

The good news is that a competitive dollar in the global market and a strong dollar at home are compatible in both the long run and during the transition to a more competitive dollar.

A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output.

Homeowners who refinanced their mortgages took out cash and reduced their monthly payments at the same time. Much of the cash obtained by refinancing was spent on consumer durables, home improvements and the like.

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.

An increase in the relative price of products from the low wage manufacturers in Asia and Latin America will also make those products less attractive to American consumers.

Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.

To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.

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.

Unless the trade deficit shrinks, the combination of the trade deficit and the interest and dividend payments to foreigners will grow ever more rapidly.

My theme this evening is that America needs a competitive dollar.

In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth.

So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at the controls.

Inflation is lower and more stable and the real business cycle fluctuations are more modest.

If the Federal Reserve pursues a strong dollar at home while the dollar becomes more competitive in global markets, we can achieve both price stability and a more balanced path of economic growth.

Art teaches nothing, except the significance of life.

The principal rule of art is to please and to move. All the other rules were created to achieve this first one.

I grew up with art from the innocent age of ten - with art, but with no sense of identity.

One does not devote one's life in art to shock an audience.

The other great development has been in photography, but that too was influenced by Conceptual art.

My art became very public.

Riding a race bike is an art - a thing that you do because you feel something inside.

The idea is, if I can't heal from my art, then how can you heal?

But in the finished art of the song the use of words has no connection with the use of words in poetry.

One does not need buildings, money, power, or status to practice the Art of Peace. Heaven is right where you are standing, and that is the place to train.

I don't believe in art. I believe in artists.

Art cannot be modern. Art is primordially eternal.

Without art, the crudeness of reality would make the world unbearable.

We have often been attracted to the story of the other, the outcast. And he and I just loved working together, so it just kept happening, and our relationship is completely bound up with our work. We enjoy each other's art.

Where the spirit does not work with the hand, there is no art.

It is veneer, rouge, aestheticism, art museums, new theaters, etc. that make America impotent. The good things are football, kindness, and jazz bands.

At the University of Maryland, my first year I started off planning to major in art because I was interested in theatre design, stage design or television design.

Art is an expression of who you are. Parts that I play are my sculptures.

There has always been quite a strong black and white art tradition in Australia, with quite a large contingent of cartoonists, given the size of the population.