to poor countries? an empirical investigation ”, university of houston working paper, november 2005. feldstein m., horioka c. “ domestic savings and international capital flows ”, economic journal, june 1980. work of 1980 estimated the correlation between the national savings rate and the investment rate in the years 1960 - 1974 at 0. 89. this correlation for the years 1990 - 1997 was estimated at 0. 60, and having included south korea – at 0. 76. despite a pronounced fall, the correlation between the national savings and investment remained high. 22 his constituted a peculiar puzzle, as in the global world of finance there were no good reasons for which investments were to be financed with residents ’ savings rather than with loans drawn on the global financial market. as in the case of the “ lucas puzzle ”, numerous works have been written to explain this phenomenon. in the most recent work by martin feldstein regarding this subject, 23 the newly estimated correlation rate gradually decreased over subsequent decades to reach a mere 0. 19 in the decade ending in 2002. the decreases regard mostly smaller countries, but the estimates for large countries also show that the correlation rate fell from 0. 92 down to 0. 59. therefore, it seems that over 10 recent years the process of globalization of financial markets exhibited a pronounced deepening. one may wonder why the recent years have witnessed acceleration and deepening of the globalization process, given that some phenomena that are universally deemed the reasons behind globalization, started a few decades ago. it seems that apart from the – growing for a few years now – role of the global financial markets and the liberalization of commerce, new factors have emerged, such as taking advantage of the technological progress in the ict and joining the global economy by china and india. thomas friedman, author of the famous book entitled “ the world is flat : a brief history of the twenty - first century ”, 24 hows how radical the changes in the organization of the manufacturing process and service performance have been over the recent years, as a result of, inter alia, the use of new communication technologies, such as the internet, mobile phones, or the appearance of such techniques of gaining and processing information as the google search engine. i may share my personal thought with you. i have just completed my work on the first draft of a paper discussing global imbalances. owing to the internet and new websites providing specialist information and knowledge in the area of economy, it took me three months to write the

curve and monetary policy ”, remarks by chairman ben s. bernanke before the economic club of new york, 20 march 2006. resulting from the entire yield curve. while it is difficult to assess which hypothesis is correct, central banks, as sailors did in the old days, should apply two iron rules : firstly, frequently determine their position, secondly, use as many waypoints as possible. this means that, especially where new phenomena emerge or there are structural transformations, the monetary policy must not be described using just a few simple indicators, as e. g. inflation and output gap in the taylor rule. monetary policy decisions should rather be a product of a complex analysis of a number of indicators and data and cross - checked with qualitative information. in turn, another federal reserve governor, donald kohn 29, devoted his recent address to the analysis of when and on what conditions the central banks should respond to rapid changes of asset prices. in kohn ’ s opinion, there are two possible approaches. according to one of them, described as the conventional monetary policy, the central bank focuses on stabilising the inflation, treats changes in asset prices as an exogenous process and does not attempt to influence asset prices whatsoever. the other option, described by kohn as the “ extra action policy ”, allows for a deviation of current inflation from a level determined as stable in return for improvement of the perspectives of achieving price stability in the future. however, the extra action policy does not mean piercing the speculative bubbles by central banks, and means rather “ taking out ” of additional insurance against possible negative shocks, which may happen in the future. in kohn ’ s opinion, the extra action policy may be run very rarely and only where the three conditions are met : • the central bank must be able to identify asset bubbles in a timely manner and high certainty as to the correctness of analysis conclusions ; • there must be a high probability that a slight tightening of the monetary policy will be able to stand against the speculative activity on a given assets market ; • the expected improvement of the future economic situation resulting from a smaller speculative bubble must be significant and higher than the costs incurred by the economy in the aftermath of running the extra action policy. to recapitulate this train of thought, kohn was very sceptical whether the three above - mentioned conditions can be sufficiently met ; however, he did not preclude that in the future, the understanding of economic processes will improve as much