Available at: http://www.kansascityfed.org/publicat/sympos/2010/reinhart-paper.pdf  2  BIS central bankers’ speeches  quarter. Over the longer term, Japanese growth will be weighed down by significant fiscal and demographic pressures. The balance of these two major forces – weakness in advanced economies and strength in emerging economies – determines the global economic outlook.
Last fall, the consensus was that a faltering recovery in advanced economies was a greater risk than overheating in emerging markets. Today, it is the opposite. Such reversals can be expected to continue. Although this shift to a multi-polar world is fundamentally positive, it is also disruptive. Labour, capital and commodity markets are changing rapidly.