a real market again, rather than a captive arrangement for investors. volatility of returns these days is comparable to the us results. on this point, see remarks by roger ferguson, november 2005, at http : / / www. federalreserve. gov / boarddocs / speeches / 2005 / 200511152 / default. htm. strictly speaking, the volatility of equity returns is related not just to the volatilities of the flow of earnings and discount rates, but also the co - variance between earnings and discount rates. volatility of 10 - year government bond returns rolling 3 - year standard deviation of monthly returns % % australia united states sources : global financial data ; rba the evidence for enhanced stability for emerging markets is not so easy to come by. but it could be said, i think, that the fundamental position of a number of emerging - market countries has improved since the late 1990s. they have increased growth and greatly reduced inflation. the median credit rating of the countries in the jpmorgan embi has risen by two notches. recent work by the imf suggests that such factors can account for part, though not all, of the decline in spreads in recent years. 16 of course, the fact that this has been a period of quite stable economic outcomes and low yields in developed countries, hence prompting a search for yield elsewhere, has been a big advantage to emerging - market borrowers. but a number of these countries do seem to have been using the benign conditions to strengthen their financial resilience. one of the periodic tests of that resilience appears to be under way at present. key indicators for emerging markets * gdp growth ( % ) 2. 7 3. 8 4. 1 inflation ( % ) 21. 4 7. 0 4. 1 s & p credit rating bb + bb + bbb * median values for group of countries in jpmorgan embi global sources : bloomberg, imf world economic outlook this very brief look at some of the key facts cannot claim to be a comprehensive analysis. nonetheless, a marked improvement in macroeconomic conditions in many countries – not just lower volatility of growth, but also a vast reduction in inflation and inflation variability – after the upheavals of the 1970s and early 1980s would seem to have been an important factor conditioning financial pricing for “ risk ” over recent years. that this might show up in yields and spreads, which look a bit more like they were in

then after the boom, the flow of immigrants slowed considerably. it is also clear that, over recent years, more people have been moving from western australia to other states than vice versa. this is in stark contrast to the boom years. the overall conclusion here is that the movement of people has helped even things out across the economy. 9 / 16 bis central bankers'speeches the other possible explanation for the reduced dispersion in unemployment rates is that many of the economic shocks we experience nowadays are less regionally concentrated – with the mining investment boom being an obvious exception! – perhaps because of less variation in the structure of regional economies. it is difficult to test this idea rigorously, especially the nature of the shocks. but we can look at the variation across the country in the industries in which people work and the type of jobs they have. my colleagues at the rba have done this using census data for the more than 300 separate geographical areas in australia. 3 using these data, they have constructed indices of how different the various regions are in terms of the industries that people work in and the occupations that they have. i will spare you the technical details of these calculations. 4 my colleagues have also calculated how these indices have moved through time and they have conducted the exercise both including and excluding the regions with a heavy concentration in mining. the results are shown in this next graph ( graph 10 ). 10 / 16 bis central bankers'speeches the main conclusion from this work is that, on average, regions are becoming more similar. over time, the industries we are working in, and our occupations, are becoming more alike across australia, not more different. there are, of course, still large differences across regions, but they are smaller than they once were. one important reason for this is the increasing relative importance of service industries, and the decline in the relative importance of manufacturing. both of these are national phenomena. using the data from the 300 - plus individual regions, it is clear that the variation across the country in the share of the workforce employed in the manufacturing industry has declined since the early 2000s ( graph 11 ). in 2016, the distribution is more tightly clustered around a lower average than it was in 2001. it is also clear from the census data that those regions that had a relatively high share of workers employed in manufacturing in 2001 have tended to have faster growth in services employment than have other regions. so we are becoming more alike. 11 / 16 bis central bankers'speeches none of this is