BIS Review 82/1998  -7-  In Canada, no new arrangements for central bank accountability have been put in place since 1991. But in fact the existing arrangements have adapted quite well to an inflationtargeting environment.
Suppose now the world were to be opened up to capital flows. Capital would flow out of those countries with low interest rates, where investment prospects are scarce compared to domestic saving, and towards countries where interest rates are high, where investment prospects are abundant relative to domestic saving. Countries that import capital would benefit from a greater stock of high productivity investments.