fdi, which at present probably still differ in favour of the united states, may also converge in the medium term. second, the positive sign of the investment income balance conceals the fact that it has been falling steadily in relation to gross flows since the early 1980s. in 1980, it accounted for more than 40 % of total us income from investment abroad, while, in 2005, it was less than 2 %. this means that, today, see ecb ( 2006 ), the accumulation of foreign reserves, occasional paper series no 43, february 2006. see hausmann, r / sturzenegger, f ( 2006 ), global imbalances or bad accounting? the missing dark matter in the wealth of nations, harvard university, cid working paper no 124, cambridge ma. see cline, w ( 2005 ), the united states as a debtor nation, washington dc, sowie gourinchas, p o / rey, h ( 2005 ), from world banker to world venture capitalist : us external adjustment and the exorbitant privilege, presented at the nber conference on g7 current account imbalances : sustainability and adjustment. see imf ( 2005 ), loc cit. comparatively small changes on the income or expenditure side can have far - reaching effects on the net income statement. 13 third, even with us investors enjoying constant yield advantages, an increase in borrowing costs could push us net interest income into deficit. given the credit liabilities 14 of around us $ 3. 6 trillion net shown at the end of 2004, a 1 percentage point increase in the global interest rate level over the entire maturity range would lead to an additional net interest burden of us $ 36 billion. 15 that would be the case at least in the long run if the higher interest rate level affects all assets and liabilities. it would eat up the 2005 interest income balance, which was no more than us $ 7. 4 billion. in the final analysis, the “ dark matter ” theory does not provide a compelling reason why the usa and, with it, the world economy should be immune to risks of persistently large current account deficits. v implications coming to the policy implications, let me first note that globalisation by no means automatically gives rise to imbalances. in the past few years, what we have been dealing with is the advancing process of globalisation coinciding with a particular set of factors that have contributed to the emergence of global imbalance

prices in germany climbed by 7. 6 % on the year in april, whilst in the euro area, the inflation rate stood at 7. 0 %. that's still significantly above the ecb governing council's 1 / 4 bis - central bankers'speeches medium - term target of 2 %. whilst it is true that the headline rate of inflation has fallen back markedly from its peak in autumn 2022, core inflation, which excludes volatile energy and food prices, continued to climb persistently. just this march, it reached the new record high of 5. 7 % in the euro area, and fell by just one - tenth of a percentage point in april. the march ecb staff projections suggest that inflation will decline only gradually. 1 the euro area rate will probably significantly exceed the target rate again in 2024, at an average of 2. 9 %. it is only projected to be almost back at the 2 % target in 2025. faced with these high inflation rates, the governing council of the ecb has made an unprecedented change to the monetary policy stance. in the space of just nine and a half months, it has raised the key interest rate by 375 basis points. but that doesn't mean the fight against high inflation has been won yet. additional monetary policy measures will probably be needed, even if they are likely to cause an additional burden and dampen economic activity further. but to do nothing and let things run their course is not an option. that means running the risk of monetary policy having to be tightened even more sharply later on. people in the euro area can be confident that the eurosystem will fulfil its mandate and restore price stability. 3 digital euro ladies and gentlemen, monetary policy is without a doubt the eurosystem's most important task, but not its only one. one topic the eurosystem – like many other central banks around the world – is currently dealing with is the introduction of central bank digital currency, or cbdc. while the people's bank of china ( pbc ) is well advanced in terms of its work on cbdc, the eurosystem has also been conducting research into this topic for some years now. back in 2020, the eurosystem published a report on a retail cbdc in the euro area – a digital euro. cbdc is uncharted territory for central banks. at the same time, the implications for the financial system are potentially far - reaching and hard to predict. that