He attributes this not to the effect on the fiscal position but to the direct pressure of the extra spending on economic resources: in order to keep aggregate demand in line with supply real interest rates, including those at longer maturities, needed to go up to “crowd out” private spending. In general, however, swings in demand will tend to have less impact on forward rates – and therefore on longer-term bond yields – than on current, spot interest rates. 8  For more on the countercyclical impact of monetary policy, see for example Christiano et al (1999), Boivin et al (2010) and Ramey (2016). 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  In addition, capital markets are now very open and the UK a far smaller part of the world economy  Chart 7: Global factors much more important determinant of changes in gilt yields than domestic events  than it once was. So at least as far as real bond yields are concerned, it’s the future of the global economy that matters more than that of the UK specifically. Changes in real bond yields are tightly correlated across developed economies (Chart 7); news about the world economy has a greater impact on gilt yields than news about the UK specifically9. The fact that international capital markets are now very open – and that the UK is now only a small part of the world economy – also has a bearing on  12-month changes in 10-year yields.
Development of education and health is an important part of the Millennium Development Goals. The IFIs also need to assume a greater role in encouraging the developed nations to invest and create job opportunities in the Heavily-Indebted Poor Countries and other poor nations as a long-term plan to assist lowincome countries to achieve the Millennium Development Goals. Finally, we share the view that the legitimacy, credibility and effectiveness of the Fund and the Bank hinges on the degree to which its representation reflects the relative significance of its respective membership. The 13 th General Review of Quotas represents an important opportunity to ensure that all members, especially the developing and emerging economies, have an adequate representation in the institutions that is consistent with their relative positions in the world economy. It is important for voices from this constituency of the emerging and developing world to not only be heard but to be listened to. We look forward to the commitment of the international community in preserving the fundamental, core principle of equality in the governance structure of the Bretton Woods Institutions. This greater engagement within the international community will contribute to increasing the prospects for a greater shared global economic prosperity. 2/2