that if we move too slowly to raise interest rates, the economy could move firmly above its capacity limits and inflation could establish significant momentum. we certainly want to avoid this outcome. at the same time, there are risks in the other direction. in particular, new digital technologies could be giving the economy more room to grow before inflation pressures emerge. raising interest rates too quickly could choke off this economic growth unnecessarily. the situation makes monetary policy decidedly data dependent. of course, being uncertain about the future does not justify inaction. it does not mean keeping interest rates on hold until inflation momentum begins to build. what it does mean is that we will move rates toward a more neutral level gradually, continuously updating our judgment on these key issues in real time. conclusion 5 / 6 bis central bankers'speeches it is time for me to conclude. i hope i have shown you why technological advances represent opportunities to be seized, not a force to be resisted. of course, we must always remember that the associated disruption will be difficult for people whose jobs are affected. however, we know that in the long term, these advances will create more jobs than are lost, and create enough income to ensure that those who are affected can adapt and access new opportunities. digital disruption is also posing challenges to the bank of canada as we conduct monetary policy. it is adding more layers of uncertainty at a critical time in the economic cycle. given all the uncertainty, the bank will continue to follow a gradual approach to raising interest rates, and remain dependent on incoming data and other sources of information to guide our decisions. i would like to thank eric santor for his help in preparing this speech. 6 / 6 bis central bankers'speeches

skills of our workforce. so it is incumbent on all of us to think hard about how to do this. and about how to give individuals the tools they need to become more efficient at work and more knowledgeable and competent in conducting their own affairs. this requires that we focus on both the quantity and the quality of education - whether that education be formal or informal. there is a vast body of literature on the returns to investment in formal education. much of this literature focuses on the benefits of completing high school and post - secondary education. this kind of analysis generally shows that more formal education leads to higher earnings. partly because of this analysis, we in canada have focused on keeping children in school longer and ensuring that they go on to complete post - secondary education. this has paid enormous dividends, and should continue to feature on our agenda. but what we should also consider is how to make schooling more productive. and that is not simply about increasing the resources for education, but also about using more effectively the most critical and most valuable resource in this process - students ’ time. how do we do that? for starters, in the future, we will have to pay more attention to early childhood development, so that a greater proportion of our 6 - year - olds arrive in school ready to learn. i have talked about this at some length in a speech i gave last may to the sparrow lake alliance. 3 we should also focus more on the development of literacy skills in primary grades, given evidence that this really pays dividends later on. but one of the keys to making schooling more productive and relevant for our times lies in linking formal education to practical experience - in other words, “ building a bridge to the real world. ” learning - by - doing can help build that bridge. these practical forms of education can be delivered by the community inside and outside the school, by parents, and by businesses - in other words, pretty much by everyone in this room here tonight! unfortunately, this type of education has been largely neglected in the economic literature, which is why i would like to spend the next few minutes talking about it. when i was in russia in the early 1990s, the thing that struck me was that, even though people had technical skills and some of them also had theoretical knowledge of a market economy, they could not relate to markets intuitively. they had not had the opportunity to absorb informally, by “ doing, ” the skills that are absolutely critical in order to function effectively in a market