What is clear however is that we have to overhaul our traditional ways of measuring, assessing and reacting to productivity and welfare indicators. Socially, uncertainty will weigh heavily on people’s shoulders in the years to come amid these structural changes. How should policymakers react? The fact that our established gauges have lost their assumed precision does not mean that we have become clueless. In spite of the elevated uncertainty, it is still possible to grasp the obvious. Potential output may not the most reliable benchmark in the current environment. Moreover, perhaps it misses the broader structural changes, which are of paramount importance in the longer run pursuit of improvements in standards of living. So it is crucial that policy makers pay heed to broad and thorough analyses, coupled with an understanding of the limitations to our understanding we face at this time. In this way, modest judgment and prudent action will provide the indispensable preconditions for policymakers to live up to their responsibilities. 6  BIS central bankers’ speeches
Stefan Ingves: Financial crises in an international perspective Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Danish Financial Supervisory Authority, Copenhagen, 12 September 2006. *  *  *  Thank you for inviting me here today. It is easy to forget what a financial crisis entails, now that a number of years have passed since we last experienced one and it is therefore important that we remind ourselves. Although we cannot yet see any immediate threats, we must look ahead to prevent potential crises. During my twenty minutes or so today I intend to talk about the following: •  the fact that most of the various crises in different countries during the 1980s and 1990s have had a number of common causes,  •  the fact that it is important to invest in preventing and managing crises,  •  the fact that risks and potential vulnerabilities in the financial system are now changing rapidly as the differences between banks and other financial institutions decline and crossborder integration intensifies,  •  the fact that the cooperation between authorities within and between countries must be developed further, both with regard to regular monitoring and crisis management. In particular, it is necessary to discuss how the responsibilities and costs should be divided up in the event of a crisis. Many of the experiences I describe refer to crises and countries outside of Scandinavia, even outside of Europe, which does not prevent them from being relevant to our discussion.