adjustment and stimulative policies in emerging asia ). the resulting loss in global gdp is greater than under the bad solution, at least over the fiveyear horizon. doing half the job, in other words, is worse over the short - to medium run than doing nothing. fiscal consolidation and the repair of household balance sheets are necessary and inevitable, but doing them quickly, unassisted by growth from elsewhere, deepens global deflation. emes will not be able to decouple in these scenarios. although many of them face inflationary pressures at the moment, and serious distortions to their domestic economies, they will be quickly caught up in a vortex of imploding demand from the advanced economies and follow them down. rotating global demand through the timely adjustment of exchange rates and structural reform could prevent this. sounds good. everybody wins. so why hasn ’ t it happened? fear, narrow self - interest and political inertia are the reasons. this is why adopting an “ after you, alphonse strategy " is bound to fail. the hope is that, by everyone agreeing to move together, these impediments can be overcome. everyone should hold hands and take a leap of faith – but not blind faith, mind you. there is good reason to think it will work. it certainly looks better than the alternatives. thank you for your attention. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

to russian gas supplies and european demand for gas both this winter and in the winter of 2023 - 24. the profound influence of energy prices means that the central bank has difficulty controlling current inflation. wage growth along with the increase in the minimum wage also pose an inflationary risk. one - off wage hikes are logical in the face of high inflation, but automatic wage indexation will make it all the more difficult to bring inflation down. finally, prolonged expansionary fiscal policy can boost inflation further. efforts to curb inflation are helped when fiscal policy works in the same direction as monetary policy. economic growth in the third quarter of this year was - 0. 2 % in the netherlands and + 0. 2 % in the euro area ( quarter - on - quarter ). dnb will issue new projections in december. it is quite possible that we will also experience economic contraction in the coming quarters. some cooling off of the economy is needed to reduce inflationary pressures. however, it is far from certain that a mild recession will be enough to curb high inflation. what is the ecb doing about this? the ecb is taking unprecedented measures to restore price stability. the ecb embarked on the course of normalisation in december 2021. at the time, inflation was already above target but was still expected to fall below 2 % again in the medium term. the war in ukraine and broadening inflationary pressures prompted the ecb to accelerate monetary policy normalisation. net asset purchases have since ceased ( the pandemic emergency purchase programme ( pepp ) in march and the asset purchase programme ( app ) in july ) and the ecb has raised policy rates three times. the two most recent rate hikes ( of 0. 75 percentage points ) were the ecb's largest rate hikes ever. monetary policy is expected to tighten even more in the coming months, thus raising interest rates further beyond neutral levels. © dnb current monetary policy is geared towards curbing demand, thus keeping inflation expectations anchored. the ecb is using higher interest rates to bring demand in line with more limited supply, thus creating a balance that will contribute to price stability. the rapid pace at which interest rates have been raised is linked to the pace at which inflation has increased and underlines the ecb's commitment to price stability in line with its mandate. the ecb will continue to tighten its policy until the medium - term outlook for inflation – a broader concept than just model projections – returns to target. monetary