slide 1b ). one example of this type of development is what is known as moore ’ s law. it is now 25 years ago that gordon moore, the founder of intel, predicted that the capacity of a microprocessor would double every 18 months. so far he has been proved right and many believe that moore ’ s forecast may hold true far into the 2010s. however, despite the fact that certain technological indicators, such as the number of patents granted, indicate an increasingly rapid development in the usa and sweden, it is difficult to believe in a perpetual technological acceleration. from a central bank perspective, we can probably keep our distance to this debate by reminding everyone that our monetary policy goal horizon is one to two years. it suffices to imagine that the adaptation periods between the first and second dotted - line curve ( in slide 1a ) will take perhaps five to 10 years. from this perspective the question of whether it developments will lead to a temporary or permanent increase in the growth rate is of mainly academic interest. the economist, 23 september 2000 the models can manage the “ new economy ” 1. possible growth effects of it a. b. real gdp real gdp time time in this context, it may be appropriate to dismiss some prejudices about macro - models. many believe that these models will become unusable and outdated in a “ new economy ”, but that is not the case. when structural changes take place, forecasts based on historical estimates naturally become more uncertain. it is therefore reasonable to attach greater importance on these occasions to recent information and indicators. but the models need not be assessed on historical data. in actual fact the models ’ parameters can be “ calibrated ” in such a way that their properties closely agree with the conception of the way the economy functions. this conception can, of course, be based on historical connections, but can equally well be based on information not contained in historical data. the models are in actual fact an important tool in testing whether historically assessed connections still apply and play an important role in signalling significant structural changes. what does the data in the usa say? what information does factual data actually give us? without doubt there is a clear break in the gdp growth trend in the usa, which has been much higher during the second half of the 1990s than during the 1970s and 1980s. the fact that this has occurred without any corresponding increase in inflationary pressure indicates that there has been an increase in the economy ’ s long - term production capacity. but should

addressed is the issue about the lending to small and medium enterprises. recently, we have some positive signs in the evolution of lending. the contraction of lending to non - financial corporation has been 2. 9 % in the 12 months to october. this had been falling consistently, but in the most recent period the flows of new loans, while remaining negative, have shown signs of stabilisation compared to the earlier part of the year. you have also to take into account that bank lending is in some cases only part of the total financing of a company. large firms for example tend to borrow directly on capital markets, issuing corporate bonds, and this market for corporate bonds have been doing very well in terms of prices and new volumes. we also see that, on their asset side, euro area firms have accumulated more than two trillions in liquid assets, largely reflecting precautionary savings and reluctance to invest. as profits have been falling, distribution of income to the shareholders and owners has been cut. large size corporations are better placed here than the smaller firms, particularly in countries like italy ” bis central bankers ’ speeches how can we address this problem? “ in contrast to most other countries in the euro area, in italy, you have a marked dual industrial structure : on the one hand there are many very small firms, and the other hand a rather small number of large and very large firms. this is important because credit supply constraints are particularly severe for the smallest firms, which are the first to suffer when banks contract lending ”. but what would you suggest? “ italy has taken some measures that have improved the situation, like the moratoria, which make credit conditions a bit easier, but you still have long - standing and severe structural issues to solve. you don ’ t escape the big question : it ’ s a structural problem and italy has to make economic reforms. during the crisis italy has done a lot in terms of correcting its fiscal weaknesses, but has not done enough in terms of economic reforms. the labour market, still needs more flexibility. labour market legislation needs to facilitate – not hinder – the capacity of businesses to deploy their labour force in the most efficient manner. more generally, competitiveness and the attractiveness of a country as a foreign direct investment destination depends on the “ easiness to do business ”, on its bureaucratic environment, on its judicial system ’ s capacity to enforce the rule of law, on the country ’ s governance in general. without good economic governance