and consumption rose. so did share prices. production plans were revised upwards. in time, imbalances arose in the american economy between investment and saving, as well as between current and more fundamental stock market valuations. although optimism everywhere else did not become as excessive as in the united states, decisions were no doubt made about consumption, investment and shareholdings that possibly would not have occurred if more lasting economic considerations and more realistic expectations had prevailed. importance of learning from history history teaches us that in business, euphoric phases tend to be followed by a clear change of mood. the fact is that a similar wave of over - optimism attended the era of railway - building in the nineteenth century. the invention of the electric motor and the combustion engine likewise generated a high degree of over - confidence in the early twentieth century. in sweden it was the possibilities of using the new technology to reap large profits from such natural resources as hydroelectric power, timber and ore that were exaggerated. in the late 1990s the jubilance was about the huge profits that were going to be reaped instead from computer and telecom technology. once again, the expectations of rising profits and incomes overshot the mark. we should bear in mind, however, that the major innovations did play a tremendous part in the emergence of industrialised society and the welfare state. railways have been of lasting importance, not least in sweden. without those investments in the early twentieth century, the mining and forest industries could hardly have done what they did to launch norrland and other parts of our country on the world market. sweden is one of the world ’ s best examples of the forces for growth that are generated by innovations, experimentation and creative processes. companies like ericsson, aga, skf, atlas copco and electrolux are just a number of the instances of inventions that have contributed to our country ’ s long - term growth. the old austrian school of economics, with its roots in the period before world war i, had an analytical focus on growth and the business cycle that is relevant for an understanding of the present situation. one insight is the crucial part innovations play for the path of long - term growth. this has been elucidated not least by joseph schumpeter and erik dahmen. however, the significance of innovations and technology for growth is not a straightforward matter. they often raise productivity and generate windfall profits. the new products that result from innovations give some firms a monopoly, while other firms

a rapid decrease in the use of cash is not without problems. this is only a few of the aspects that may be debated in the second session. the third topic is the future and we all want to know what it will look like. will the banks be reduced to mere suppliers of infrastructure and account holding services while other actors, the non - banks, have most of the end - user relation - ship? or will the banks win by knock - out? will the non - banks become banks over time as their activity expands? will payment services be delivered to us by apple? google? facebook? alibaba? what about bitcoin and its peers? will we simply have payment services provided by an anonymous network? in addition to having all these kinds of issue debated among representatives for market actors and authorities, we will also have the pleasure of listening to the academic perspective of professor charles m. kahn from the university of illinois. i ’ m really looking forward to learning more about all these topics today. bis central bankers ’ speeches