ability of firms to improve their productivity and on the ability of the labour market to match workers with the new jobs being created. bis central bankers ’ speeches finally, as we work our way through these myriad of issues, it is important that we do not lose sight of the considerable benefits to australia from the lift in the prices of our key exports and the unprecedented level of investment that is taking place. this morning i have talked about how these developments are changing the structure of the economy. i have also talked about the challenge that they pose for assessing the balance between supply and demand. yet for all this, the high commodity prices and high investment provide australia with tremendous opportunities – opportunities that many other countries wish they had. as our society works out how best to take advantage of these opportunities, the job of the reserve bank is ensure that inflation remains low and stable and that the overall economy remains on an even keel. the medium - term inflation - targeting arrangements that have been in place for nearly two decades now provide a strong framework in which to do this. thank you for listening and i look forward to your questions. bis central bankers ’ speeches

bis central bankers ’ speeches providing additional services, it can still be used productively in more capital intensive industries. this would free up some labour to work in the services sector. 14 education longer life spans provide opportunities and incentives to gain more education or learn a trade, and to do so later into life. this result is relatively straight forward. education and training, particularly beyond high school, are costly for the individual, in part because of the opportunity cost of foregone income. a longer working life raises the life - time returns to advanced education and training, thereby providing the incentive to do more of it. although other factors may be at work here, there is evidence that more people have been obtaining qualifications beyond high school over the past couple of decades ( table 2 ). 15 raising our human capital should help to make our economy more productive. risk taking as i have already discussed, a rise in the share of older people might reduce the extent of risk - taking and innovative behaviour in an economy. but that is not where this story ends. it is important to recognise that a decline in the share of people taking risks would raise the return to risk taking. a response of others to this incentive would help, in part, to offset the initial impetus to reduced risk - taking flowing from population ageing. it is also possible that longer life spans may make people more willing to take on risks at any given age. why? take the example of someone considering a new business venture. they might be more willing to do so knowing that they would have more productive years to take advantage of a successful business. moreover, in the event of failure, they still have many productive years ahead to generate a decent income doing something else. 16 they could use those years to pursue a safer option to generate a living, or even take on a different risky venture. in short, “ 40 may be the new 30 ” when it comes to comparing the willingness of the current generation to take on risk compared with those born only a few decades ago. for example, consider the case of an agrarian island economy facing the prospect of ageing. it would make sense for savings to rise allowing for the purchase of more farm equipment – say a tractor. this would enable some younger workers to be freed up from food production to work instead providing care for the aged. alternatively, some of those savings can be put to work offshore, with the income from that covering the cost of imported food and other goods, also allowing resident workers to shift