In its simplest version, welfare is maximised by fully stabilising inflation at its target level, a policy which simultaneously delivers a zero output gap. 11 This so-called “divine coincidence” 12 implies that policy-makers who care only about stabilising inflation will deliver an efficient path of economic activity. And, symmetrically, policy-makers who focus solely on keeping output at an (appropriately defined) potential level will deliver low and stable inflation rates. A relatively simple Taylor-like monetary policy rule could achieve these desirable outcomes. In this benign world, traditional monetary policy trade-offs appear to have disappeared! 9  See M.A. King (1997), “Changes in UK monetary policy: Rules and discretion in practice”. Journal of Monetary Economics 39, pp. 81–97. 10  See L.E.O. Svennson (1998), “Inflation targeting in an open economy: Strict or flexible inflation targeting?” Victoria Economic Commentaries 15(1). 11  At least when the output gap is defined in a “model-consistent” manner, i.e. as deviations of output from the level it would achieve in the absence of nominal rigidities. 12  See: O. Blanchard and J. Galí (2007). “Real wage rigidities and the New Keynesian model”, Journal of Money, Credit and Banking 39(s1), pp. 35–65. BIS Review 45/2010  5  It is widely recognised that even modest deviations from the simplest version of the canonical model introduce caveats to these very strong conclusions.
As a contributor, we will share with others the climate solutions that we have developed and may be of relevance to them. Let me highlight three key themes at the Singapore Pavilion: decarbonisation technologies transition finance carbon markets  First, innovating decarbonisation technologies. The transition to net-zero will require us to transform how we live and work. It will transform how we power our homes and offices, travel, grow our food, and construct our cities. As a densely populated metropolis in the tropics, Singapore is a living lab to develop, testbed, and commercialise green solutions for urban living. Let me highlight two areas. One, decarbonising land transport. 1/3  BIS - Central bankers' speeches  In many cities, land transport accounts for a substantial portion of carbon emissions; in Singapore, it is about 15%. The solution lies in electrifying transportation. This is why, from 2030, Singapore will allow only registrations of cleaner-energy cars – namely, electric, hybrid or hydrogen fuel cell cars. Infrastructure solutions for charging electric vehicles on a massive scale will need to be developed and Singapore can be a good test bed for such solutions. Two, decarbonising power generation. Globally, while the growth in renewable energy has been spectacular, fossil fuels continue to account for more than 80% of global primary energy consumption. This is why the production, deployment and research into low-carbon hydrogen, as well as carbon capture, utilisation and storage solutions are so critical and why Singapore has focused heavily in these areas.