of the recent growth in trade has come as large emerging - market economies, such as china and india, have been integrating into the world economy. with this integration has come a significant increase in the global demand for commodities, as well as rapid growth in the production of manufactured goods in asia. that brings me to the first of the global developments i'd like to mention – a marked rise in the prices of commodities relative to those of manufactured goods. in the past five years, energy prices have risen by about 150 per cent, and non - energy commodity prices have increased by about 80 per cent. over the same time period, the price of nickel – manitoba's biggest commodity export – has risen by about 500 per cent, and the price of copper has increased by more than 300 per cent. at the same time, the prices of many manufactured consumer goods, such as clothing, computers, entertainment equipment, and household appliances have decreased in many countries. in canada, the prices of durable and semi - durable manufactured goods, excluding automobiles, have declined by about 1 to 2 per cent per year, on average, over the past five years ( although more recently, prices for semi - durable goods have strengthened ). given its endowment of natural resources, canada has benefited greatly from strong commodity prices. but, just as clearly, new competition from china and other emerging asian economies is posing some tough challenges for canadian manufacturers. global integration has also been affecting international savings and investment flows. indeed, in the past dozen or so years, what is sometimes called " financial openness " has increased significantly. since 1995, the stock of cross - border investment in advanced countries has grown from about 40 per cent of gdp to more than 120 per cent of gdp, and emerging markets have seen a similar increase, albeit from a lower base. this leads me to the second development i want to highlight. in recent years, desired global saving appears to have increased relative to desired global investment, which has made credit abundant and relatively cheap. federal reserve chairman ben bernanke has called this a global " saving glut. " the international monetary fund has emphasized the weakness of global investment relative to global growth. but whether it's high saving or low investment, the net effect is that large pools of internationally mobile capital have been searching for seemingly scarce investment opportunities, putting downward pressure on long - term interest rates. as investors have searched for higher returns, risk spreads have narrowed, and interest in alternative investments and more innovative investment

so rigid. but achieving our target requires that we take a flexible policy approach, one informed by considered analysis and judgment. that is one reason why transparency – and occasionally guidance – matters. guidance in normal times to help achieve the monetary policy goal in a perfect world, guidance would be unnecessary. the inherent uncertainty in economic outcomes and thus in the policy path would be widely understood. with full information and efficient markets, monetary policy expectations would effectively take care of themselves – knowing a central bank ’ s inflation objective and its reaction function would be sufficient for markets and the public to form and evolve their expectations, without the need for any direct guidance from the central bank. in the real world, monetary policy guidance can be useful in providing additional information. but this is not assured. how to get guidance right remains a subject of considerable debate. one approach is to provide advance signals to markets, using stock phrases or code words. not surprisingly, this sort of signalling helps market participants predict policy decisions in the near term. 8 but it is not clear that fulfilling promises helps market participants understand why those decisions are taken. 9 without this understanding, market participants may be even less able to form efficient expectations over time, thus increasing their reliance on explicit guidance from the central bank. ultimately, the risk is that markets turn into an echo chamber, to the benefit of no one. some other central banks directly disclose their policy interest rate forecast. “ putting it all out there ” is, on its face, an appealing approach. it avoids the challenge of trying to perfectly j. boivin, “ how people think and how it matters, ” a speech delivered to the canadian association for business economics, kingston, ontario, 23 august 2011. note the contrast here to company earnings guidance, where expectations are essentially irrelevant to how the business actually performs, except indirectly through their effect on valuations and, thus, company funding conditions. j. murray “ monetary policy decision - making at the bank of canada, ” a speech delivered to the mortgage brokers association of b. c., vancouver, british columbia, 7 may 2012. see c. rosa and g. verga, “ the impact of central bank announcements on asset prices in real time, ” international journal of central banking 4 no. 2 ( june 2008 ) : 175 – 217. c. fay, t. gravelle, “ has the inclusion of forward - looking statements in monetary policy communications made the bank of canada more transparent? ” bank of canada discussion paper 2010 –