##spicacious article in 1981 on cyclical policies in norway in the 1970s : “ it will otherwise always be a problem for economic policy that the statistics are prepared more or less after the events, and that it takes time after the statistics are published before we are aware of whether new trends have begun to emerge. [... ] moreover, the analyses were based on projections of productivity growth that proved to be too high. ” as i pointed out in my introduction, there was strong growth until 1973, and it took time before it became apparent that there had been a negative shift in potential output. the red dotted line in the chart shows what gdp would have been if the growth rate had been the same after 1973 as in the previous 10 years. because the negative shift in the level of potential output was not discovered in time, a counter - cyclical policy was employed in an attempt to sustain the output level. whereas the output gap was believed to be negative, it subsequently proved to be positive, as illustrated by the chart. similarly, in a study of previous us monetary policy, ophanides11 finds that central banks overestimated the level of output that was consistent with stable inflation in the 1970s because they were not aware of falling productivity growth in time. as a result, the output gap was underestimated and policy was too expansionary. also in the 1990s, we saw an increase in productivity growth, and even though the mistake from the 1970s was not repeated, there was a vigorous debate concerning different targets for trend growth and the output gap. in addition to the difficulty of capturing changes in potential output fast enough, there is also considerable uncertainty about the level of actual gdp. as an example, norway ’ s gdp figures were extensively revised in june 2002. growth in mainland gdp was revised upwards by an average of 1 percentage point per year for the period 1995 - 1999. the largest revision was for 1999. as late as in may 2002, we believed that growth in 1999 had been 1. 1 per cent. the revised figures now show that growth was in fact 2. 7 per cent. it is obvious that such revisions can have a considerable impact on the actual output gap. norges bank is currently systematising different vintages of national accounts figures. we can then go back and evaluate monetary policy in “ real time ” to learn how we should respond to uncertain data. frank knight ( 1921 ) differentiates between “ risk ” and “ uncertainty ”. 12 with risk, we know

thirachai phuvanatnaranubala : asian bond fund speech by mr thirachai phuvanatnaranubala, deputy governor of the bank of thailand, at euro 50 group roundtable, tokyo, 12 june 2003. * * * mr. chairman, on the issue of asian monetary cooperation, thailand is certainly of less importance than japan ; therefore i have to apologize for speaking before director - general watanabe. since it is late in the day and time is short, i will try to make it interesting by going directly to the question and answer session. however, i will be the only one asking the questions, and giving the answers. but i will restrict myself to only five. the first question : there are a lot of initiatives on financial matters going on in asia. does it mean that we are aiming for a monetary union of sort in asia soon, or something leading up to a single asian currency? i cannot speak for other asian countries, and i do not know whether something is being planned for the more advanced countries, like japan and korea, or not. however, looking through the eyes of someone in thailand, which is part of asean, the final goal of monetary union, should it exist, is still around many corners. in my opinion, the level of economic integration in asia is still much looser than europe at their early stage of integration. you may point to the rapidly expanding inter - regional trade in asia. but if one looks closely, one will find that a good portion of this are raw materials, parts, and components produced in one country and sold to another for further processing or assembly for sale to a third country within or outside asia. the production of goods for final consumption in asia is still low, with the exception of japanese and korean brands. and while china ’ s imports from asean have increased substantially in the past few years, their consumption is still mainly in food products, raw materials and low value added products. for luxury goods, their being brand - conscious, asean products have not been able to compete well. this will change over time when asian products gain more differentiation and sophistication. for example, at the moment, thai palm oil is no different from malaysian. there can be no mutual trade. but when it becomes part of the national cuisines, trade and exchange could occur. the more value is added, the more asia will trade with each other for eventual consumption. but for the moment, the emphasis is more