But growth has a price. This is particularly reflected in increased emissions of greenhouse gases as a result of increased human activity. It is still uncertain how serious the impact of gas emissions will be. But once the impact comes into full evidence, it may be too late to take corrective action. There is also the risk that the concentration of greenhouse gases in the atmosphere reaches such a high level that it exceeds critical values that cannot be reversed. We are very pleased to have Dr John Llewellyn, Senior Economic Policy Advisor at Lehman Brothers, here today to enlighten us on how globalisation affects the environment. Changes  BIS Review 27/2008  1  in our environment affect the way we are able to interact: it is important to combine knowledge about nature with knowledge about the functioning of the economy. The last decade or so, we have witnessed increased financial integration and competition across national borders. This is a positive development. Deeper and more mature markets tend to be better equipped to deal with uncertainty and distress. But increased financial integration also raises the potential for more widespread contagion if something goes wrong, as witnessed by the current financial turmoil. Professor Philip Lane, Director of the Institute for International Integration studies at Trinity College Dublin, is one of the foremost experts on financial globalisation, and we are very much looking forward to hearing what he has to say on this subject.
The entrance of new, large emerging economies into the world trading system has strongly influenced economic developments. For some years now, the short-run trade-off between inflation and economic growth has been extraordinarily favourable. Inflation has been low and economic growth high. We have been hit by massive and long-lasting positive supply shocks thanks to globalisation. To accommodate a higher growth potential and to maintain the nominal anchor, central banks worldwide for a long period held short-term interest rates well below what can be regarded as a normal level. History has shown us that low and stable inflation is the best contribution monetary policy can make to growth and macroeconomic stability. A new, globalised world does not change this paradigm. Today, monetary policy aimed at price stability is the norm, and in most countries monetary policy has been delegated to independent central banks. Frederic Mishkin from the Board of Governors of the Federal Reserve System will be joining us this afternoon to speak on advances in monetary policy. We are privileged to have such a prominent group of speakers here today. I am also happy to see that our conference has attracted such a large number of participants from various institutions both in Norway and abroad. This conference is Norges Bank’s gift to Jarle Bergo, as a thank you for all his contributions to the Bank over the past four decades. I hope that both Jarle and the rest of you will enjoy it.