Nevertheless, I acknowledge that there is significant uncertainty around the amount of tightening of credit conditions in the coming year in response to the bank stress and the magnitude of the effect that tightening might have on the U.S. economy. Therefore, there is some downside risk that the incremental effect of the credit shock is larger than I expect.
These phenomena, despite their positive impact on welfare and their contribution to the reduction of cross- country inequalities, have caused significant losses for segments of populations, not least within advanced economies, that were unprepared for these changes and found themselves unprotected during the process.