to addressing some of the global challenges in urban development and the growth of megacities, both within asia as well as in other parts of the world. demographics third, uneven global demographics will present countries with both challenges and opportunities. developing countries with young and growing workforces will face the challenges of creating enough jobs and investing adequately in infrastructure, industry and institutions. if they succeed, they will be able to reap their “ demographic dividend ” and grow rapidly into middle - income economies. if they fail, high unemployment will cause increasing restlessness and agitation for political change and revolution. the international labour organization, in its “ global trends for youth employment 2012 ” report, attributed the arab spring protests partly to high levels of youth unemployment. such instability could similarly affect other countries, and a demographic dividend could turn into a demographic curse. at the other end of the spectrum, many advanced economies are experiencing rapidly ageing populations. decades of low birth rates coupled with affluence and access to medical care and nutrition mean that the elderly live much longer even as fewer babies are born. even as life expectancy in the eu and north america increased, the average retirement age has fallen from 68 to 63 ( from 1970 to 2010 ). the state will find difficulty financing the increased public expenditure on healthcare and pension systems given shrinking populations of working adults, falling tax revenues and high dependency ratios. in order to remain competitive, these advanced economies have 2 options. they can choose to augment their population through the import of young labour or global talent. this path leads to challenges in cultural integration. the alternative is for these countries to compensate for a stagnant and aging workforce with the deployment of technology. japan and korea are the best examples, relying on an increasing level of automation and sophisticated robotics. as demographics change, so too will consumer demands. singapore is positioning itself to attract companies to monitor and understand these changes within asia. the singaporebased asian consumer insights institute, launched in 2011, is helping companies to develop and test - bed asian - specific products and business strategies. in 2012, nielsen, a global provider of consumer insights, chose singapore to launch an innovation hub. this hub, the first of its kind in asia, will develop new technologies and methodologies in neuroscience, shopper technology, and measurement science to enhance consumer and market insights for companies working to reach consumers in asia. technology the final trend i ’ d like to talk about is that of technology. technology, especially information technology, continues

for banks and financial institutions. mitigation and green transition policies such as carbon pricing can also affect price stability, potentially precipitating large and long - lasting movements in relative 10 tree - based methods are flexible machine learning algorithms that can tackle a wide range of tasks. decision trees group individual data points by sequentially partitioning data into finer categories according to specific characteristics of interest. neural networks ’ main building blocks are artificial neurons, which take multiple input values and transform them in a non - linear way to output a single number – like logistic regressions. source : bis. ( 2024 ). artificial intelligence in central banking. prices and shifts in trend inflation. depreciation pressures on currencies of countries frequently affected by climate disasters can also cause financial instability, higher import costs and negative terms of trade. the range of policy options available to mitigate climate risks require dedicated research, especially in the context of the complex, non - linear ways in which climate, the real economy, financial systems and markets interact and affect each other. improved inter - disciplinary macroeconomic modelling is becoming crucial for understanding directions of causality and feedbacks. iii. globalisation and the natural rate of interest monetary policy making has evolved in line with structural changes in the economy and the financial system. inflation targeting ( it ) – the longest surviving modern monetary policy framework - is no exception. this could be attributed to the ‘ rule - based ’ principle built into the framework alongside elements of “ flexibility ” that have evolved in practice. it has been argued while the application of a core set of " scientific principles " has expanded significantly in practice, there remains, and will likely always remain, elements of art in the conduct of monetary policy 11. 11 mishkin, frederic s. ( 2007 ). will monetary policy become more of a science? nber working paper 13566, october. one principle followed by central banks in setting policy rates is the natural rate of interest – popularly known as r - star. it is a theoretical benchmark for monetary policy, reflecting the real interest rate that supports the economy at full employment while keeping inflation low and stable. this concept of r - star or the natural rate dates back to 189812 and currently forms an integral element of modern macroeconomic frameworks. it is argued in a seminal work that “ a central bank should seek to close the gaps between actual economic conditions and the economy ’ s potential for output and employment ( y - star and u - star, respectively )