. see the box entitled “ effects of the rising trade integration of low - cost countries on euro area import prices ”, ecb monthly bulletin, august 2006, pp. 56 - 57. see pain, n., i. koske and m. sollie ( 2006 ), “ globalisation and inflation in the oecd economies ”, economics department working paper no. 524, oecd, paris ( november ). “ world film market trends - focus 2006 ” all in all, it is difficult to measure accurately the total impact of emerging markets on inflation. for instance, the imf ’ s staff has estimated that globalisation, through its direct effects on non - oil import prices, has reduced inflation by a quarter of a percentage point per year, on average, in mature economies. 17 however, the overall impact is more difficult to estimate and disentangle from other factors that reduce inflation, for instance the increases in productivity growth and the stronger credibility of monetary policy. take now international capital flows, the other dimension for which the growing role of emerging markets has a clear global effect. certain emerging markets, notably in asia and among oil exporters, have become the “ financiers of the world ”. they are indeed large net savers, with hefty current account surpluses, in the order of usd 800 billion last year. interestingly, the net capital outflows from these emerging markets finance the deficits of a number of mature economies, the united states, in particular. of course, many emerging economies remain external borrowers, turkey being one of them. but for the first time in modern history, the “ southern hemisphere ” is overall financing the “ northern hemisphere ” : capital is flowing from the “ poorer ” economies to the “ richer ” economies. this looks abnormal both from an economic standpoint and from a moral standpoint : according to standard economic theory, capital should flow in the opposite direction, i. e. from “ richer ” to “ poorer ” economies, where the expected rate of return of capital is higher ; and it would be more appropriate for the wealthiest economies to save more and consume less, in proportion, than the poorest. there is much debate among economists as to how to explain this “ paradox ”, which is sometimes referred to in connection with the 1995 nobel prize winner in economics, robert lucas. of course, there are many factors to consider. one recent explanation is that the current constellation of global financial flows is

already more than in canada or in australia. 8 however, that is not to say that the challenges posed by income distribution are not among the highest priorities of most emerging market countries. as we know, eliminating poverty is on the top of the agenda for developing countries, in particular for africa. if the present looks promising for emerging market economies, their potential future seems even brighter. what do the available projections for long - term growth, based on demographic trends and models of capital accumulation and productivity, tell us? the answer is no surprise : emerging markets are likely to become even weightier in the world economy tomorrow than they are today. of course, any projection, even in the short term, is surrounded by uncertainty. projections at very distant horizons are, therefore, somewhat speculative. yet, they might capture possible secular developments. a number of studies found startling results regarding the growth prospects of emerging markets. according to one such study, brazil, russia, india and china could account for over half the size of today ’ s six largest economies by 2025 and, in less than 40 years, they could be larger. 9 other studies convey similar messages, notwithstanding some differences. 10 therefore, the developments we observe today are likely to be the precursor of a profound rebalancing in the distribution of world output tomorrow. of course, it cannot be excluded that this process might well be “ non - linear ”, with episodes of discontinuity, perhaps also including financial crises somewhere down the line. therefore, the current developments call for constant monitoring and cooperation in the international community. but let me also look at emerging markets from a different angle, an angle which is more uncommon for a central banker. these countries are not only growing in importance economically, but also culturally – a see the list of forbes ’ global 2000 ( http : / / www. forbes. com / lists / 2007 / 18 / biz _ 07forbes2000 _ the - global - 2000 _ rank. html ). see the list of forbes ’ billionaires ( http : / / www. forbes. com / lists / 2007 / 10 / 07billionaires _ the - worlds - billionaires _ rank. html ). see merrill lynch and capgemini, “ world wealth report, 10th anniversary ”, 1996 - 2006. see wilson, d. and r. purushothaman “ dreaming with brics : the path to 2050 ”, global economics paper no. 99, goldman sachs, 1