now. this debate was quite active in the period following the collapse of the dot - com boom in the early 2000s. but those in favour of policy action aimed at moderating financial cycles did not carry the day, i think mainly because the us economy recovered pretty quickly from what was a quite mild downturn in 2001. i sense now, however, that among many thoughtful people this question is once again up for discussion. it will be fascinating to watch how the debate unfolds. conclusion in the barrage of information with which we must all cope day by day, it is often hard to stand back and see the big forces at work. but those forces – and our responses to them – will ultimately do more to shape the course of our economy and financial system than the shortterm news. hopefully, we can still find some time for reflection about such matters, even in the volatile conditions in which we all find ourselves at present. it is in that spirit that i offer these remarks today. thank you.

over coming years. a decline of this magnitude should be manageable, just as the earlier rise was manageable. it will, however, require a further rebalancing of the economy. as part of this rebalancing, exports are set to grow strongly, particularly when the large lng projects come on line. there will also be slower growth in imports of capital goods as projects are completed. but these adjustments on the trade side will not be enough, by themselves, to ensure that growth in output and employment is satisfactory. this means that other forms of spending will need to pick up. one of these other forms of spending is residential construction, and the modest rise that is underway here is a welcome development. some lift in consumption growth is also expected, although a return to consumption growth faster than income growth for an extended period is unlikely. it would also be unwelcome given the relatively high levels of existing household debt. so this means that a pick - up in non - mining investment is an important part of the story in the return of the australian economy to trend growth. indeed, our expectation is that this will take place, with growth in non - mining investment predicted to pick up to at least high single - digit rates within the next couple of years. this is, of course, a forecast and there is the usual wide range of uncertainties. these include uncertainty as to the appropriate steady - state capital - output ratio for the economy and the associated investment ratio. these important structural variables are influenced by a whole range of considerations, including the rate of total factor productivity growth, population growth, the rate of depreciation and the industry structure. but from a more cyclical perspective, there are a number of factors that support the outlook for a steady pick - up in non - mining investment. the three factors i want to list – and they are clearly interrelated – are some depreciation of the exchange rate, an improvement in business confidence and the very low level of interest rates. while the australian dollar has appreciated over the past couple of months, on a tradeweighted basis, it is around 8 per cent lower than the peak in april this year. it is still too early to see the impact of this on investment, although the depreciation has improved prospects in some areas of the economy. in particular, there are parts of the tourism and manufacturing industries where the outlook is now a bit more positive, especially for firms that had earlier responded to the