BIS central bankers’ speeches  17  Liu, Y, Slotine,J and Barabási, A.L (2011), Controllability of complex networks, Nature 473, 167–173 (2011) . Minoiu, C. and Reyes, J.A. (2013), A network analysis of global banking: 1978–2010, Journal of Financial Stability 9 (2013) 168–184. Newman, M E J (2005), “Power laws, Pareto distributions and Zip’s law”, Contemporary Physics, 46 (5), pp. 323–51. Newman, M. E. J. (2011), “Complex Systems: A Survey”, Am. J. Phys. 79, 800–810. OECD (2013), Interconnected Economies: Benefiting from Global Value Chains, OECD. Perrow, C (1984), Normal Accidents: Living with High-Risk Technologies, Basic Books, NY. Pozsar, Z, Adrian, T, Ashcraft, A and Boesky, H (2010), “Shadow Banking”, Federal Reserve Bank of New York Staff Reports, No. 458 Roger, S and Vlcek, J (2011), Macrofinancial Modeling at Central Banks: Recent Developments and Future Directions, IMF Working Paper 12/21. Shakir, T and Tong, M (2014)The interaction of the FPC and the MPC, Bank of England Quarterly Bulletin Q4, available at http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q403.pdf. Simon,H (1962), The Architecture of Complexity, Proceedings of the American Philosophical Society, Vol. 106, No. 6., pp. 467–482. Simplicity consulting (2012), “True Cost of complexity in the banking sector” available at http://www.simplicity-consulting.com/wpcontent/files_mf/1340875856BankingTrueCostofComplexity2012.pdf. Smets, F (2013), “Financial Stability and Monetary Policy: How Closely Interlinked?” Sveriges Riksbank Economic Review. 18  BIS central bankers’ speeches
On the one hand, the recovery of developed economies goes on, but only moderately and insufficiently to reduce the high rates of unemployment (figure 1). Risks are substantial. In fact, the intensity and velocity of the events we saw in Europe in early November are proof of the fragility of the world economy. On the other hand, growth prospects in emerging markets are still positive; commodity prices are still high, with copper standing out recently at record highs, and external financing conditions are good. The sustainability of this imbalanced scenario for the global economy is one of the primary risk factors for next year. Some of the questions we must try to answer and monitor closely are: How fast can emerging economies grow if the advanced economies are further weakened? How can advanced economies grow without incurring in unsustainable current-account deficits? How will the financial tensions in Europe be resolved? Is it possible for expenditure in Chile to grow excessively while ignoring the risks coming from abroad? In this context, the Board has continued to gradually normalize the monetary policy interest rate (MPR), setting it at 3.25% in its December meeting. In the most likely scenario, it will continue to gradually withdraw the monetary stimulus, which will depend on the unfolding of internal and external macroeconomic conditions. Let me now take a closer look at the scenario we believe is the most likely for the next two years and its implications for inflation and monetary policy. Macroeconomic scenario I will begin with the world economy.