We also allow for the wage Philips Curve to be non-stationary: it moves over time, and it is absolutely normal to do so. Reference wage values, social preferences, jobs’ characteristics, skill endowments and even Central Banks’ targets, they all change over time – hence, the impact of wage gaps on inflation cannot be the same in different time periods. The preliminary finding of our model is that inflation does not increase close to or above its target level until the wage gap is closed. For Philips Curve to work, the loss of welfare from a negative wage gap has to be fully compensated first – as a stock measure, not as a flow. The policy recommendation from here is that countries which closed their wage gap should be much more prudent in further wage increases – because they will be seen in inflation much faster and larger than in the recent past. And for countries which have not closed their wage gap the implication is 3/5  BIS central bankers' speeches  that inflation will remain subdued until this happens. I fully agree with the IMF’s recommendation that central banks in NMS with their own currencies should be alert to the inflation risks of higher wage growth, while bearing in mind that raising policy rates could trigger capital inflows and exchange rate appreciation – which could further deepen current account imbalances. While the real monetary policy stance may differ between euroarea and emerging Europe, there is broad heterogeneity even among emerging Europe.
Eddie Yue: Opening keynote - "Scaling up sustainable finance in Asia" conference Opening keynote by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the ASIFMA "Scaling up Sustainable Finance in Asia" conference, Hong Kong, 17 March 2023. *** Alice, Diana, distinguished guests, ladies and gentlemen, Good Morning, Let me start by thanking ASIFMA for inviting me to this Sustainable Finance Conference. It is my great pleasure to share with you Hong Kong's vision and the concrete steps being taken to strengthen our leading role in green and sustainable finance. As we come into Spring after a colder-than-usual winter, this is a good time to talk about the advances that happen when the right ecosystem is combined with the right opportunities. In the financial world, green and sustainable finance brings extraordinary opportunities. And if we are looking for the best ecosystem for these opportunities to flourish, Hong Kong is the place. The climate challenge to Asia is huge, and urgent. Meeting this challenge will require substantial investment – some $ trillion over the next three decades based on market estimates. China alone will require more than 100 trillion yuan. The multi-trillion-dollar funding need can hardly be met by the public sector alone, and climate finance plays a crucial role here. It helps the public sector raise funding from the market to finance climate projects and initiatives. It also mobilises private capital to directly fund climate actions.