For instance, structural factors such as slowing of crop yield growth, fast population growth and higher income elasticity for food in developing countries would continue to support higher food prices. Policy markers would therefore need to pay attention to these developments in calibrating the appropriate degree of monetary tightening. 7. Thirdly, there is also a need to diversify the sources of growth for the region, in order to generate sustainable growth and redress global imbalance. In this regard, it is worthnoting some encouraging developments that are underway in the region. The first one is the deepening intraregional trade and increasing orientation towards domestic consumption. The robust economic growth of the regional economies over the past year has mainly been propelled by strong domestic demand, while the contribution from net exports was either small or negative. In fact, the aggregate trade balance of the region has been gradually declining since 2007, and if intra-regional trade is excluded, it has declined notably from about 4% of the regional GDP in mid-2007 to less than 2% at end-2010, the lowest in more than a decade. This gradual change in trade pattern, with regional economies shifting their export markets from deficit countries like the US to surplus countries in the region, has also been contributing to global rebalancing. 8. We also should not overlook the positive attributes of capital flows. While challenging to manage, capital inflows present important opportunities for boosting broaderbased growth. The key is to channel the capital flows into good uses, and particularly towards productive investments.

Ardian Fullani: Needed – a new way of thinking, a new approach to economic policy Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 6th South-Eastern European Economic Research Workshop, organized by the Bank of Albania, Tirana, 19 November 2012. *  *  *  Dear workshop participants, Dear central banks colleagues, I am very happy to be here today, in this 6th South-Eastern European Economic Research Workshop. This Workshop is an annual event that Bank of Albania organizes, aiming to successfully bring together researchers and their work from the region and beyond. We are very glad for your personal contribution and your institutions’ commitment to this activity. The participation map extends every year and we take this development as a sign of recognition. This activity takes place as Albania celebrates its 100 anniversary of independence, which happened on 28 November 1912; we are, therefore, very happy to welcome you on the occasion of this very important event. The South-Eastern European Economic Research Workshop provides a platform to discuss and, most importantly, improve our work. It also provides a platform that contributes to the extension of regional cooperation in the area of research, making an additional contribution to the cooperation in other important areas of Central Banking in the region. As I have previously mentioned, countries of the SEE region are similar in many aspects including the state of economic problems and economic research. We are focusing on finding the problems in the existing models.