and upwork surveys confirm that gig work does, indeed, lower barriers to workforce entry and increase hours and flexibility for some individuals. the increasing prevalence of gig work may also affect the unemployment rate and productivity. to the extent that gigs provide an easy entryway to employment, unemployment may decrease. however, if gig work is less stable, it may increase job loss. the net effect on unemployment is, thus, unclear. regarding productivity, gig work could lower aggregate productivity to the extent that it requires less human capital or specialized knowledge than traditional jobs, or if it primarily increases hours worked by lower - skilled individuals. that said, gig work, especially when enabled by new technologies, may allow hours to respond more flexibly to changes in demand and individuals to more easily connect with many different clients or employers. as a result, workers ’ downtime and the time required to acquire new clients and manage existing clients may decrease, in which case resource utilization and productivity may increase. 4 / 8 bis central bankers'speeches it is also possible that the increasing prevalence of gig work will cause the cyclical behavior of unemployment, participation, and the workweek to change, with implications for how we assess the amount of slack. we know that contingent work increases when the economy worsens. if new technologies make it easier to find gig work, then we could see unemployment rise less in recessions, to the extent that gig workers are counted as employed. however, it could be that individuals who are able to avoid unemployment through contingent work would still be underemployed if it is difficult to cobble together enough gigs to achieve full - time employment. this would likely show up as lower average workweeks and higher levels of involuntary part - time employment during downturns. as a result, cyclical changes in resource utilization could be reflected less in movements in the unemployment rate and more in variation in hours per worker. beyond the behavior of macroeconomic variables, it is unclear how the growth of different types of gig work affects the welfare of workers. welfare should increase in cases where gig work meets the needs of workers by providing a low - barrier means of accessing employment and by allowing workers to better match actual hours worked with desired hours of work, especially if the gig work is available at times and in places where traditional work opportunities are in short supply. there is some evidence that this has, indeed, been the case. for example, 24 percent of informal workers in the eiwa survey indicated that contingent work

least require time to stabilize. opponents of imf support also argue that the substantial financial backing, by cushioning the losses of imprudent investors, could exacerbate moral hazard. moral hazard arises when someone can reap the rewards from their actions when things go well but do not suffer the full consequences when things go badly. such a reward structure, obviously, could encourage excessive risk taking. to be sure, this is a problem, though with respect to asia some investors have to date suffered substantial losses. asian equity losses, excluding japan, since june 1997 worldwide are estimated to have exceeded $ 700 billion of which more than $ 30 billion has been lost by u. s. investors. substantial further losses have been recorded in bonds and real estate. moreover, the policy conditionality, associated principally with imf lending, which dictates economic and financial discipline and structural change, helps to mitigate some of the moral hazard concerns. such conditionality is also critical to the success of the overall stabilization effort. as i will be discussing in a moment, at the root of the problems is poor public policy that has resulted in misguided investments and very weak financial sectors. convincing a sovereign nation to alter destructive policies that impair its own performance and threaten contagion to its neighbors is best handled by an international financial institution, such as the imf. what we have in place today to respond to crises should be supported even as we work to improve those mechanisms and institutions. accordingly, i fully back the administration ’ s request to augment the financial resources of the imf - - u. s. participation in the new arrangements to borrow and an increase in the u. s. quota in the imf. hopefully, neither will turn out not to be needed, and no funds will be drawn. but it is better to have it available if that turns out not to be the case and quick response to a pending crisis is essential. i also believe it is important to have mechanisms, such as the treasury department ’ s exchange stabilization fund, that permit the united states in exceptional circumstances to provide temporary bilateral financial support, often on short notice, under appropriate conditions and on occasion in cooperation with other countries. in my testimony before this committee in mid - november, i endeavored to outline the roots of the current crisis. this morning i should like to carry the analysis a bit further. companies in korea and many other asian countries have become formidable world - class producers in a number of manufacturing sectors