Mr Knight argues that the performance of the global economy has been remarkable in recent years, with exceptionally strong growth going hand in hand with low and stable inflation. Such a performance is projected to continue. He then explores risks to the outlook, akin to potential fault lines in the tectonic plates of the global economy. He highlights possible inflation pressures, financial vulnerabilities and the international configuration of countries' external positions. He argues that a common factor underlying these potential fault lines has been prolonged accomodative monetary and financial conditions and draws from this a number of policy implications, focusing in particular on policies conducive to monetary and financial stability.
Full speech, including graphs (PDF, 9 pages, 56 kb)