accompanied by new establishments. structural changes generate developments that are often referred to at present as a “ new economy ”. the marked improvement in productivity maintains profits and keeps prices down. during the transformation, a good circle is created but it is difficult to tell how long it will last. it can be described, if you like, as a period of extensive rationalisation and heightened efficiency. the growth trend is raised for an indefinite period, enabling the economy to expand more rapidly without inflation taking off. it should be born in mind that the adaptation to the new information technology does not occur automatically. it is not the case that one day we suddenly find the new technology has begun to be implemented in ways that are leaving their mark on economic developments in general. the late 19th century provides important lessons about the necessary conditions for this good circle. at the beginning of the 1800s sweden was still a poor country with an unstable form of government, a chaotic monetary system and a general shortage of credit facilities. ninety years later the swedish economy had undergone a dramatic transformation. inflation was low, with an orderly monetary system. the nation was bursting with vitality in every field. an impressive range of products, many of them world leaders, were being developed on the basis of swedish inventions. swedish financial experts were engaged in the exploitation of the inventions at an early stage. employment was provided for more and more people, living standards rose and growth was among the highest in the world. opinions about the causes of the pronounced change in the swedish economy are not completely unanimous. the stable prices presumably played a part. when inflation is low or the price level is stable, those who have to plan for the longer run face less uncertainty. another significant factor was probably the credit system ’ s development in the 1800s. banks were established and the abolition of interest controls was followed by more financial expertise. that made it possible to exploit the inventions and finance investments in the emerging industries. an increasingly stable form of government presumably contributed, too. a series of constitutional reforms provided a guarantee of stability. economic activities benefited from the abolition of trade guilds, freedom to trade and the reform of joint - stock companies. the reform of elementary education was, of course, another important step that ultimately promoted human capital. this catalogue is not intended to be a complete account of all the factors behind sweden ’ s transformation from a poor country into a rapidly expanding industrial nation. the point i want to make is that a variety of institutional changes seem to have been needed to provide a

key is [ to make ] the reference to asia - although it is very, very hard to refer to it - as a single entity. but we, i think, can work together, and this diversity actually presents a lot of opportunities, just as it is fraught with challenges. 1 / 2 bis - central bankers'speeches where all these put us is that we face a lot of interlinked uncertainties at both regional and global levels. these affect all of us. one can easily make the case that global disruptions require global solutions. but as any economist knows, the bigger the group, the harder it is for collective action to be rational. [ we can refer to ] the famous [ kenneth ] arrow impossibility theorem : " individually rational people are not necessarily collectively rational. " they prefer a to b, or b to c, and c to a. welcome, all of you. i look forward to a very fruitful conference. thank you for coming, and i hope you enjoy your stay here in mactan. let me turn the floor over to [ reserve bank of india ] deputy governor [ rajeshwar ] rao. 2 / 2 bis - central bankers'speeches