##sustainable debt burdens, the imf has used exceptional access as a rule rather than an exception in the recent past. not surprisingly, in many instances the objective of helping to restore market access was not achieved and, what is more, this approach became the root cause of moral hazard and more volatile capital flows. in order to roll back the part played by exceptional access it will be necessary to introduce additional safeguards. in addition to a positive assessment of debt sustainability, exceptional access could be made dependent on convincing arguments that failure to provide such support might threaten the global financial system. if such systemic criteria applied, it would also have to be demonstrated why a temporary standstill ( like a bank holiday in a national banking crisis ) would not be a suitable alternative and whether any expected contagion effects would be better mitigated by lending to the crisis - stricken country rather than to the potentially affected countries. it remains to be seen whether the g - 7 will be able to conclude its current discussion on exceptional access policy in parallel with the work on the contractual approach of sovereign debt restructuring. the new extraordinary financing package in favour of brazil, which will be discussed by the imf board today, does not foreshadow a change of policy on the part of the fund and thus makes me less optimistic that a satisfactory agreement on a reform of access policy among the g - 7 will be achievable soon. so, the new brazilian package has raised a lot of serious questions with regard to fund policies. i am sure they will play a major role in our discussions today.

percent of gdp and imports to 16 - 1 / 2 percent of gross domestic product. these estimates are consistent with recent analysis by gopinath ( 2015 ) and bussiere, delle chiaie, and peltonen ( 2014 ). in the staff ’ s trade model, imports are specified to depend on gdp in addition to the exchange rate. the estimates shown in figure 2 simply show the effects arising through the latter channel. similarly for exports, the staff ’ s model also controls for changes in a trade - weighted aggregate of foreign gdp, with the estimates in figure 2 showing only the effects from a change in the value of the dollar. bis central bankers ’ speeches u. s. aggregate demand from the dollar ’ s appreciation is likely to total almost 2 - 1 / 2 percent of gdp after three years – in the absence of policy action to boost private demand or government spending. given these perhaps surprisingly large effects, an obvious question is, how well has the model done so far in accounting for the actual behavior of u. s. real net exports? while trade flows are affected by many factors that are difficult to capture in models – such as the labor disputes at major ports that occurred earlier this year – the drag from net exports over the past year does appear to be relatively close to the estimated effect implied by the staff ’ s econometric trade model, with net exports reducing gdp by almost ¾ percentage point in the data, compared with an estimated fall of 1 percentage point in the model. looking forward, given that the effects of the stronger dollar play through gradually to the economy, there is good reason to expect that the drag on gdp growth from the stronger dollar will persist well into next year and likely spell continued weakness in the traded - goodsproducing sectors of the economy that are especially exposed to the exchange rate. indeed, the more export - oriented manufacturing sector has already taken a hit during the past year and has experienced weaker growth than the broader economy. turning now to inflation, consumer price inflation has been running well below the federal reserve ’ s 2 percent target, and the strong dollar has played an appreciable role in this shortfall. one way in which the stronger dollar depresses inflation is by putting downward pressure on import prices. figure 4 uses an econometric model discussed in a recent speech by chair yellen to illustrate how a 10 percent appreciation of the dollar might play through to core personal consumption expenditures ( pce ) inflation, which excludes the more