always agree with the reserve bank ’ s hard line approach on financial disciplines, but who always remain loyal to their central bank. it did not go unnoticed in the world financial markets over this past year, with major global financial market disruption, that the south african banking sector remained stable and sound. i give the credit for this to you, the managers of sound and well - disciplined private sector institutions. finally, talking about the people of central banking, i must thank my wife, my four children together with their spouses for their support over many years. i like to refer to the husband and wives of my children as my children who became my children because of the decisions of my children. my wife seldom had a normal husband, my children must on many an occasion have missed a normal father in the house because they had to contend with a husband and a father addicted to central banking. my peers as central bank governors will know what these words mean. 4. the future of central banking looking ahead, i can only express my regrets that i were not as of today ten years younger. exciting times lie ahead for the central bankers of the world as the process of the integration of financial markets around the globe will continue. however, i leave the south african reserve bank in great peace of mind because i am confident that mr tito mboweni and the team with him in the bank have the ability, the determination and the will to steer south africa successfully into this brave new world. tito, i admire the way in which you approached the past year of induction with us in the reserve bank. you succeeded in getting the staff of the bank on your side. you grasped very quickly what many outsiders will always regard as the mystique of central banking. you have truly become one of the members of the exclusive club of central bankers of the world. i leave the bank with great confidence that you will be the governor that will finally destroy the african jackal of inflation in our country. i wish you well. 5. conclusion one day, shortly after lunch, as i was sitting in the governor ’ s office on the 32nd floor of the reserve bank head quarters building in pretoria, the sliding door to the balcony in front of the office was standing open. i heard a noise and there came a bird almost falling out of the air as if it was shot. i walked out and found a beautiful homing pigeon lying on the floor of the balcony as if it was dead. i carried on with my duties behind my

of 0. 0 - 0. 5 percent. in order to achieve the 2 percent price stability target in japan, it is necessary that ( 1 ) the deflationary mindset be dispelled, and ( 2 ) the perception that prices of goods and services as well as wages are supposed to go up every year by around 2 percent becomes firmly entrenched in society as a whole - - or, in other words, the 2 percent inflation takes hold as a the well - known argument that a global approach should be taken into account in the basic determinants of inflation is one made by claudio borio, head of the monetary and economic department of the bank for international settlements ( bis ). for the recent empirical analysis, see the following : auer, raphael, claudio borio, and andrew filardo. " the globalisation of inflation : the growing importance of global value chains. " bis working papers no. 602 ( january 2017 ). https : / / www. bis. org / publ / work602. pdf. meanwhile, there has been no confirmation of any noticeable, direct influence of global slack on domestic inflation, according to the analysis conducted by economists from the federal reserve board. for details, see the following : ihrig, jane, steven b. kamin, deborah lindner, and jaime marquez. " some simple tests of the globalization and inflation hypothesis. " international finance vol. 13, issue 3 ( december 2010 ) : 343 - 375. federal reserve board staff have updated the latter analysis using data through early 2017, and have confirmed that their argument remains valid. norm for prices. in this regard, it is essential that the bank be committed in its conduct of monetary policy so as to achieve the price stability target, as i mentioned earlier. in the meantime, maintaining effective communication between the bank and the government is crucial. furthermore, nationwide changes are needed in the overall behavior and awareness toward prices. of firms that have raised prices of their products and services recently, many have done so for the first time in more than two decades, and at present, firms themselves have limited experience in terms of raising prices. moreover, consumers are not yet accustomed to an environment where both wages and prices increase at a certain pace. thus, a change in the norm does indeed mean changes in various aspects of society. financial literacy - - the next topic i will touch upon - - may seem unrelated to economic activity and prices or monetary policy at first,