Nonetheless, this pattern is at least consistent with a shift in working practices, towards a more divisible, idiosyncratic workforce, having contributed to a flatter Phillips curve relationship. None of this evidence is definitive or decisive. Taken together, however, it is at least suggestive that recent trends in the nature of work may have had some bearing both on wage-setting behaviour in general and on the weak wage puzzle in particular. Shifts in working patterns seem very unlikely, by themselves, to have been the prime-mover of weak wages. But they have probably been a contributor in the past and, more significantly, are likely to continue to do so in the future if these trends, as seems likely, perpetuate. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  The Case for Holding Fire  Let me now turn to monetary policy. Clearly, wages are a key factor when judging inflation pressures in the economy and the monetary policy stance. Continuing the pattern since the crisis, recent wage growth has been, once again, surprisingly weak. Despite unemployment falling to its lowest level, and employment rising to its highest level, in a generation, whole-economy wage growth has failed to pick-up. Indeed, wage growth over recent months appears, if anything, to have been falling. At the start of the year, the Bank of England Agents’ annual wage survey suggested pay settlements would slow from 2.7% last year to 2.2% this. At the time, there was healthy scepticism within the Bank about these findings.
Henrique Meirelles: Challenges for monetary policy – Brazil and the international context Speech by Mr Henrique Meirelles, Governor of the Central Bank of Brazil, at the Conference “The Impact of Brazil on the Global Scenario”, São Paulo, 10 July 2008. *  *  *  In mature economies, the years from the beginning of the 1990s to mid-2007 were characterized by low GDP volatility and low inflation, circumstances that led prominent economists to name the period as the era of the “great moderation”. That environment resulted from better monetary policy, a fact that translated into credibility gains for central banks, globalization and advances in productivity linked to information technology developments. At the time there was a substantial consensus that the emergence of Asia, particularly of China and India, would contribute to keep global inflation permanently under control. Thanks to cheap labor and the intensive use of new technologies on the production process, China – and to a lesser extent India – exported deflation (or at least disinflation) to the world economy through a consistent decrease in their export prices. There is now growing evidence that this era might have came to an end with the unbalances between the expansion of global demand and supply. Moreover, there are also signs of increasing labor costs in China, due to both changes in labor legislation and increasing shortages of specialized workforce. In the benign environment that prevailed through mid-2007, central banks of mature economies engaged in neutral or even expansionary monetary policies for relatively long periods.