To sum up there are risks in the horizon: a) steep rising costs from global warming, pollution and the quick rate of depletion of non-renewable resources; b) apart from the proximate concerns regarding the Middle East imbroglio there are political risks further down the road, which are associated with the emergence of new global powers during the transition to a multi-polar world; c) crisis in segments of the financial markets which may necessitate drastic measures at a high cost to prevent a spill over; and d) increasing income inequality in the developed world may trigger, especially in Europe, a backlash with sudden wage increases putting pressure on inflation.
Alan Bollard: The crisis and monetary policy – what we learned and where we are going Address by Dr Alan Bollard, Governor of the Reserve Bank of New Zealand, to the Canterbury Employers’ Chamber of Commerce, Christchurch, 29 January 2010.