Central banks have to be anchors of stability and confidence – and not only in turbulent times. When the crisis unfolded, they reacted swiftly and decisively. This was true worldwide, including in Europe as well as in Israel under the leadership of my colleague Stanley Fischer, with whom I enjoy an extremely confident and friendly relationship.
However, so long as these two imbalances continue, reflecting the excess of demand over supply, the level of potential workers will continue to fall and the net debt to foreigners will continue to rise by increasing amounts.