long - term structural shifts – such as changes in potential growth or the natural rate of interest – and could well be of relevance to monetary policymakers. the same can be said for climate policy tools such as a carbon tax or emissions trading which, depending on their configuration, will probably impact noticeably on economic and price developments. in a nutshell, gauging the prospects and risks for price stability could become even more of a challenge going forward. on top of this, there are some who are calling for monetary policymakers to take specific action to combat climate change. 12 however, i am very critical when people say that monetary policymakers need to “ go green ” by launching “ green qe ”, say, or granting specific privileges to green assets within the collateral framework. how hard should government, business and society push back against climate change? what measures need to be taken, and what behaviour should be encouraged or punished? these are political questions for elected governments and parliaments to answer. they are decisions which are not for central banks to take, because they lack the requisite democratic legitimacy. our mandate is to preserve price stability, and policy implementation needs to be in line with principle of market neutrality. skewing asset purchases to green bonds, say, would run counter to this principle, which is anchored in article 127 of the eu treaty. and a trade - off could arise once monetary policy considerations call for applying the brakes and scaling back the bond purchases. in this situation, i dare say there would be calls to press ahead with the green asset purchase programme. after all, it is not immediately apparent why efforts to combat climate change should only be made when price pressures are weak. however, asset purchases need to be reserved for exceptional situations under the eurosystem ’ s monetary policy framework and under no circumstances be deployed indefinitely. that would also render a further question redundant – the matter of whether the asset purchase programme in its existing form favours carbon - intensive enterprises and thus cements the existing structures. 13 a monetary policy which pursues explicitly environmental policy objectives is at risk of being overburdened. and in the long run, the central bank ’ s independence might be called into question. what matters to me is that we do not generally promote sustainability using instruments which serve other purposes. i think a decisive and effective climate policy is the right course of action – but it needs to be implemented using the right instruments and by agents which have the democratic legitimacy needed for that purpose. 2.

advanced economies are facing more deeprooted challenges. productivity growth has declined since the 1970s ( see chart 10 ). through several decades to the end of the 20th century, an expanding labour force and higher education attainment contributed to driving the economy forward. growth was accompanied by solid returns and considerably higher real interest rates than observed in recent years. these growth impulses are fading away. the labour force is expanding at a slower pace in many countries. if productivity and labour force participation do not increase by a considerable margin, the return on fixed investment will fall. low growth and low real interest rates may be the new norm. the government pension fund global ( gpfg ) – further growth depends on future returns over the past 20 years, norway has accumulated considerable foreign financial assets. today, the government pension fund global ( gpfg ) is one of the world ’ s largest sovereign wealth funds. the gpfg represents our collective savings and is to be managed to the benefit of both current and future generations. as an investor, the gpfg makes capital available for economic activity in other countries. the return on that capital will thereby be a result of the value added in those countries. the gpfg is a long - term, responsible investor. the objective of investment management is to achieve the highest possible return at acceptable risk levels. norges bank ’ s work on responsible investing underpins that objective. as a long - term investor, a healthy and sustainable development of investee companies and markets is in our interest. the work on responsible investing has evolved in pace with the increasing size of the gpfg. as from this year, norges bank is charged with the task of issuing decisions on observation bis central bankers ’ speeches or exclusion of companies on the recommendation of the council on ethics. in such matters, norges bank can also consider using other ownership instruments. the aim is to establish a chain of instruments that can be used in the work on responsible investing. so far, our nation has earned a solid return on its financial assets. the cumulative return on the gpfg since its inception amounts to over nok 2 000 billion. this is equivalent to about a third of total gpfg capital at the end of 2014. our return measure includes both capital gains and direct cash flows, which comprise dividend and interest income. equity prices are volatile. dividend and interest income is more reliable. given the large size of the gpfg, this cash flow has become substantial and