the increased use of mobile phones and social media. in an unfavourable economic and political environment, this can lead to frustration, conflict and a high willingness to emigrate. but in a favourable environment, the young population can help achieve a demographic dividend. in that case, africa would also strengthen the global economy. but creating enough jobs to absorb the new workers requires investment. the world bank estimates that investment in the african countries needs to reach one - quarter of gross domestic product to achieve sustainable and inclusive growth. over the past 15 years, the average was only one - fifth of gdp. so there is still some way to go. at the same time, in other regions in the world, the forces of demography are almost the opposite. in europe, the population is generally older and what is more is expected to shrink. germany is a prime example of this. the medium age of our population is only exceeded by japan. 1 / 4 bis central bankers'speeches these demographic trends are already burdening the long - term economic outlook of western economies today. and it might also reduce the return on investment in these countries. at the same time, people are looking for ways to channel their retirement savings into reliable and profitable investments. and they are doing so not only at the domestic level, but are in general also open to investing these funds abroad. this is where the “ compact with africa ” initiative comes in. it seeks to mobilise private investment – infrastructure investment in particular – in africa. but those funds for investment do not necessarily have to come from abroad. i ’ m sure many africans are looking for safe and profitable investment opportunities too. you may have noticed that you are sitting in what was once such an infrastructure investment. the gasometer in the schoneberg district of berlin is an early - 20th century industrial site. when it was constructed in 1908, it was one of the three largest gas holders in europe. gasometers were built for factories in the industrial revolution as a light source and for industrial processes that required gas. this particular gasometer, and many others like it, became redundant as we turned to other sources for lighting. but to this day, it is a reminder that an efficient energy infrastructure is an important precondition for private investment and growth. infrastructure is the backbone around which private sector activities can flourish. transport and energy services are essential arteries through which the lifeblood of an economy flows to the veins of the private sector. after all, what good

two percentage point slowing of gdp growth over the next four quarters and slightly more than a one percentage point increase in the unemployment rate over the same interval. 20 these effects are, by any standard, economically important. by contrast, declines in the ebp have no discernible effect at all on economic activity. example, movements in short - term rates in the wake of an announcement by the federal open market committee. a similar identification strategy is not available for linking monetary policy changes to movements in, say, nonfinancial - sector leverage, given that the latter is measured infrequently. see gilchrist and zakrajsek ( 2012 ). to be a bit more precise, in the 40 - year sample period, there are seven observations in which the ebp increases by more than 50 basis points in a single quarter. bis central bankers ’ speeches putting it all together, this reasoning suggests that the credit risk premium – as measured, say, by a forecasting model like that of greenwood and hanson – may be an operationally useful measure of financial market vulnerability. when this risk premium is low, there is a greater probability of a subsequent upward spike in credit spreads and the ebp. moreover, such upward spikes, when they do occur, are associated with significant adverse economic effects. to be clear, we are not necessarily talking about once - in - a - generation financial crises here, with major financial institutions teetering on the brink of failure. nevertheless, the evidence suggests that even more modest capital market disruptions may have consequences that are large enough to warrant consideration when formulating monetary policy. if so, the indicated directional adjustment would be to be less aggressive in providing monetary accommodation in the face of above - target unemployment, all else being equal, when risk premiums are abnormally low. of course, there are many caveats. foremost among them is the fact that the ability of increases in the ebp to predict future economic activity may not reflect a causal link from the former to the latter. perhaps there are economic slowdowns that are caused entirely by nonfinancial factors, and, when investors see one on the horizon, they get skittish, causing the ebp to rise. if so, it would be wrong to conclude that easy monetary policy – even if it does, in fact, cause lower risk premiums – has any causal effect on the probability of a future slowdown. so at this point, the evidence that