The optimal policy strategy involves balancing these factors, based on the structural characteristics of an economy, its degree of diversity versus specialism and the flows of factors within it. A digital twin of the economy, of the type outlined earlier, would embody these factors and flows and would provide a quantitative test-bed for making policy choices. In the absence of such a model, let me discuss two examples where existing data and analytical tools could be used to inform policy choices. In line with theory, the first looks at flows of factors within a region, the second at structural economic characteristics across regions. These data and techniques can be used to shed light on policies which might boost economic growth, locally or nationally, in line with the UK Government’s industrial strategy.49  My first example draws inspiration from recent work by Tom Forth at the Open Data Institute in Leeds, on behalf of the Productivity Insights Network (PIN) here at the University.50 This uses data on flows of people to assess local growth prospects. The story starts with the observation that many UK cities appear to punch below their demographic weight in income terms. Put differently, a number of UK cities do not appear to benefit as much as their international counterparts from agglomeration effects. To demonstrate, Chart 22 plots (log) city population size against GDP per head in 563 cities in advanced economies around the world, including a number of UK cities. It also shows a line of best fit.
Jean-Pierre Roth: Economic recovery is continuing in Switzerland Introductory remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 15 December 2005. *  *  *  Ladies and Gentlemen As we have just announced in our press release, the Swiss National Bank is raising its target range for the three-month Libor by 0.25 percentage points to 0.50–1.50%. This change will take effect immediately. The SNB intends to hold the rate in the middle of the target range for the time being. Economic recovery is continuing as expected. It has grown stronger and is more broad-based. The SNB has raised its forecast for economic growth in 2005 and now expects the increase in GDP to reach just over 1.5%. For 2006, it projects growth of a little more than 2%. The National Bank anticipates average inflation for 2005 to remain at 1.2%. On the assumption that the three-month Libor remains unchanged at 1.0%, it forecasts annual inflation of 0.8% in 2006 and 1.2% in 2007. By raising its target range, the Swiss National Bank is adjusting its monetary policy to economic developments, which are proceeding as expected. The SNB thus ensures that the inflation outlook remains favourable. Despite the increase in the interest rate, the monetary policy of the SNB remains expansionary and supports the upswing. As economic recovery progresses, the SNB will continue to gradually adjust its monetary policy.