established a clear division of responsibility for economic policy and well developed institutions founded on the constitution written at eidsvoll 200 years ago. chart : shift in the world ’ s economic centre of gravity in 1814, the great powers of europe dominated world trade. the world ’ s economic centre of gravity has since then shifted westward. today, in the 21st century, the centre of gravity is moving across the pacific to asia. when china became a member of the world trade organization in 2001, its foreign trade was 30 percent of that of the us. the chinese economy has since grown at an unprecedented pace. in 2013, china overtook the us as the world ’ s largest trading nation. ample labour supply and low cost levels have given china and the other emerging economies of asia strong competitive advantages in international markets. bis central bankers ’ speeches the global flow of credit over the past 15 years has taken an untraditional direction – from relatively poor countries with strong economic growth to more prosperous, mature economies experiencing lower growth. for a long period, this shift contributed to substantial imbalances in the global economy. ample supply of credit in western economies pushed down borrowing rates. facing competition from asia, it became relatively less profitable for firms in the west to invest in new productive capacity in their home countries. instead, cheap credit was widely used to finance consumption and housing, particularly in the us and europe. banks and financial institutions were, in practice, free to fuel credit growth. in retrospect, it is clear that a vast amount of capital was squandered. many businesses and a number of countries are struggling with high debt levels. governments that ran economies on cheap credit are now paying a high price in the form of austerity measures and unemployment. in parts of europe, unfinished infrastructure and empty buildings are not uncommon sights. chart : productivity growth in advanced economies productivity growth has been declining in advanced economies since the beginning of the 2000s. the willingness to invest has been low since the financial crisis. to what extent this is related to the economic downturn remains to be seen. better times may eventually entice investors, but it is also possible that the substantial changes in the global economy have had a more lasting effect on the willingness to invest and the growth capacity of western economies. chart : real wages in mainland norway, the us and germany a demanding restructuring process is underway in the traditional industrialised countries. in the us and germany, real wages have barely risen since the turn of the millennium. income

øystein olsen : economic perspectives speech by mr øystein olsen, governor of the norges bank ( central bank of norway ), to invited foreign embassy representatives, norges bank, oslo, 3 april 2014. * * * the speech is based on the annual address 2014, monetary policy report 1 / 14 and previous speeches. please note that the text below may differ slightly from the actual presentation. accompanying charts can be found at the end of the speech and on the norges bank website. excellencies, ladies and gentlemen, first of all, i would like to welcome you once again to norges bank. this year is the bicentenary of the signing of the constitution of norway. two hundred years ago, norway was a poor country on the periphery of a europe that was then the world ’ s economic centre of gravity. for the 112 sworn representatives, popularly known as the men of eidsvoll, who took their places as the constituent assembly in spring 1814, the atmosphere was full of hope for freedom and a better future. several of them had spent time abroad and had been influenced by philosophers and by the american and french revolutions. the norwegian constitution was inspired by the ideas they brought home. absolute monarchy under the danish king was to be replaced by the sovereignty of the people and the separation of powers. institutions with clearly distinguished roles would prevent the arbitrary use of power and foster confidence. in the discussion at eidsvoll, christian magnus falsen, a key member of the constituent assembly, said that no state can exist without a well - functioning monetary system. another prominent member of the assembly, count wedel jarlsberg, insisted that the nation must have its own bank. the people ’ s elected representatives took responsibility for the monetary system, as stated in article 75 of the constitution : « it devolves upon the storting to supervise the monetary affairs of the realm ». the storting delegated the task of supervising the monetary system to norges bank, which was established in 1816. the king would no longer have the authority to print money at his own will. at its inception, norges bank ’ s head office was located in trondheim, a twelve - day journey from the government in christiania, and even farther from stockholm, giving the central bank a geographical – and not just formal – distance from the government authorities. much has happened since 1814. norway no longer lags behind other western economies. inflation is low and stable. we have