erkki liikanen : towards more balanced growth - past experiences and current challenges speech by mr erkki liikanen, governor of the bank of finland, at a high - level seminar between the executives ’ meeting of east asia - pacific central banks and the eurosystem, frankfurt, 8 - 9 november 2005. * * * - looking at the world economy, one is struck by the pronounced differences in gdp growth rates of different countries and country groups as well as by the expansion of current account deficits and surpluses. some of the rapidly growing economies, notably the usa, have had to face increasing imbalances. this has intensified concerns over worsening problems and how to manage them. - as always, such unbalanced developments arise from a host of problems that are difficult to spell out. this is clearly reflected in the international debate concerning these problems. one must be wary of oversimplifying the problems and their solutions. careful analysis of the problems will clearly help us decide on an appropriate policy strategy. - current account problems should be viewed from several different angles. the logic behind macroeconomic variables presents three fundamental perspectives from which to analyse a current account deficit : 1. foreign trade and the services and income accounts of the balance of payments 2. the balance of savings and investment in the economy 3. developments in the economy's external assets and liabilities - analysis is usually dominated by the foreign trade aspect, so that policy debate tends to focus on trade barriers and exchange rates. this is also typical of recent discussions of the us current account deficit and the surpluses of many other countries, particularly in asia. - it is important to examine the current account also from the perspective of savings and investment. current imbalances in the global economy are largely due to the low level of savings and high level of consumption in some western economies, particularly the usa, and the abundant savings and modest private consumption particularly in several asian economies. recently, savings rates have also inreased sharply in oil - producing countries, with the boost in income from high oil prices. - one should also emphasise the factors related to indebtedness and financial investment. by definition, the increase in an economy's indebtedness is the counterpart of its current account deficit. often mentioned as determining factors in international capital flows are the depth of us financial markets and the us dollar's position as major reserve currency. these factors draw investment funds into the usa and so provide the financing for us

realized that gathering data was a necessary first step. starting earlier this year, they embarked on an ambitious study to determine the total cost resulting from vacancies. the city will then use the findings from the study to support enactment of tougher code enforcement to recover lost revenue, including assessment of fines against owners who fail to maintain their properties. this combination of new measurements and old tools to develop solutions should serve as an example to many “ traditional suburban ” areas around the country that have experienced, and will continue to experience, vacancy issues. ohio attorney general ( 2012 ). “ attorney general launches moving ohio forward demolition grant program to remove blighted residential structures, ” press release, april 13. for example, the “ restore our neighborhoods act “ ( h. r. 4210 ), sponsored in 2012 by representative steven latourette ( r - oh ) would authorize creation of “ qualified urban demolition bonds ” to support demolition costs. russell claus, director, planning department, city of oklahoma city. interview by paul wenske, senior community development advisor, federal reserve bank of kansas city. august 2012. bis central bankers ’ speeches conclusion the potential fallout of high rates of vacancy – blight, crime, lowered home values, and decreased property tax revenue – is the same for every neighborhood and community. but there is no one - size - fits - all solution to the vacancy problem. i ’ ve used some examples of communities around the country that are facing high vacancy rates in order to illustrate their different characteristics and the different origins of their vacancy problems. taking account of such differences will be important in crafting solutions to the problems caused by those vacancies. hopefully, these examples and other ideas that have been shared throughout this conference will inspire new and creative solutions to the difficult issues faced by communities. certainly, different housing markets will recover in different ways and at different paces. in some areas, the private market will lead the way, while in others, government will have to use precious resources wisely to catalyze recovery. the examples i ’ ve discussed also illustrate the value of using data to understand vacancy issues, to determine which neighborhoods are experiencing which challenges, and to design appropriate policy solutions. solving the problems of long - term vacancies will require the best efforts of public, private, and non - profit leaders locally and across the country. i can assure you the federal reserve system will continue to support recovery through the use of all its policy tools and research capacity. thank you.