What are the major causes of the current world imbalances? c.  Do imbalances impede world growth? d.  What are the best (domestic/global) policies to mitigate the imbalances? Are there any chances for (efficient) international cooperation? Who should do what? e.  How are the current changes in regulatory and supervisory frameworks influencing EU-wide imbalances? Are they mitigating them or deepening them? f.  Can creditor countries (such as China or Germany) act as “locomotives of growth” given that the juan is quasi-fixed against the US dollar and the “German currency” is fixed against the “currencies” of many trading partners in the eurozone? And what proportion of the potential fiscal impulse will merely benefit those mainly Asian countries whose products are becoming more and more competitive on EU markets. BIS central bankers’ speeches  3
The conduct of monetary policy in Norway, as in many other countries, is delegated to the central bank with an objective of low and stable inflation. The inflation target can be seen as an answer to the problems raised by Kydland and Prescott. However, inflation targeting probably places greater demands on our understanding of the way the economy functions than earlier. Macroeconomic models are useful tools that can combine our empirical and theoretical insights. But models cannot provide definitive answers to all the questions that we as decision-makers face on a daily basis. Nor can they reduce the uncertainty surrounding economic developments. Therefore, it is necessary to analyse the economy from different angles. We must also look out the window, we must be pragmatic and we must exercise discretion. BIS Review 4/2005  7