Firms in the US and the UK cut the size of their workforces at an early stage and adapted their operations to demand, whereas European firms waited until the last minute to carry out the necessary cutbacks. While profits and the future outlook have now turned around more and more clearly in the US corporate sector, the immediate future continues to appear gloomy for European firms, which have seen their competitiveness deteriorate during the slowdown. So in this respect labour market legislation can be a hindrance to high long-term growth. Furthermore, it is likely that legislation sometimes contributes to amplifying cyclical fluctuations rather than smoothing them, since productivity and profits in the corporate sector can easily become procyclical. There are indications that this has been the case during the most recent economic slowdown, as productivity has fallen sharply in the euro area at the same time as it, if anything, has tended to rise in the US. This also suggests that the US economy will normally emerge from slowdowns quicker than the euro area. Sweden among the first to have a sustainable pension system Another area in which Sweden has led the way is in pension reforms. The ATP reform in 1960 included buffers for the government finances. On the other hand, the reform was partly based on the assumption of continued robust growth and an average life expectancy of around 70 years. As we know, the 1970s and 1980s can be viewed as wasted years in growth terms.

Edward Robinson: Central bank communications - evolution in theory and practice Opening remarks by Mr Edward Robinson, Deputy Managing Director (Economic Policy) and Chief Economist of the Monetary Authority of Singapore, at the IMF High-Level Peer-to-Peer Forum on “Central Bank Communications in ASEAN–5 Countries: From Principles to Practice”, Singapore, 4 December 2019. * * *  1. INTRODUCTION  May I extend warmest greetings and welcome to all visitors and overseas participants. MAS is very pleased that the IMF is organising this conference on a most pertinent topic in Singapore. 2. MONETARY POLICY COMMUNICATIONS—FROM OPACITY TO TRANSPARENCY  Since the 1990s, there has been a clear trend in central banking circles towards greater transparency. This marked a significant turnaround from previous decades that prized monetary policy-making as “an arcane and esoteric art best practiced out of public view”.1 Former BOE Governor Montagu Norman (1920–1944) reputedly had a personal motto of “Never explain, never excuse.” The change has much to do with the growing recognition that monetary policy is essentially about managing expectations. The increasing adoption of inflation targeting also spurred advances on the transparency front, with its communication-heavy requirements of policy targets, forecasts and outlook. The shift towards greater transparency is generally held as desirable for two broad reasons. First, transparency can enhance the effectiveness of monetary policy.2 By helping to anchor long-term inflation expectations, transparency improves policy efficacy and facilitates the overall pro-equilibrating tendencies of the economy. Central bank communication increases the predictability of central bank actions.