, is still building only half the number of dwellings it was at the peak in 2006, and in fact is producing at two - thirds of the rate of 20 years ago. at present there are welcome signs that the queensland housing sector is now lifting off the bottom. but this has been a long cycle. the price of brisbane dwellings was historically about 60 – 65 per cent of those in sydney. at their peak some years ago they reached about 85 per cent of sydney levels. now they are back to about 60 – 65 per cent of sydney levels again. the cycle has taken about a decade. that the cycle can be so drawn out is a salient lesson, including for those outside queensland. even if a full - blown crisis does not eventuate, as was true of australia, overdoing it on housing on the way up is usually followed by a fairly extended period of working off the problems. we have heard much of the effects of severe weather on the us economy over the recent northern winter, with these impacts complicating the task of assessing the strength of the us expansion. weather events have also been important in queensland in recent years, and some of them have been very costly. not so long ago, the problems were those of floods ( and indeed some areas of south - east queensland experienced flooding over the weekend ) bis central bankers ’ speeches but at present much of the state is in the grip of drought. crops have been substantially reduced and the livestock industry will take a number of years to recover from reduced herds. farm incomes are estimated to be falling to their lowest levels for at least three decades. i don ’ t think this will complicate our task of reading the pace of the national economy as much as in the us case, but these are nonetheless significant effects in regional economies. our discussions with tourism operators, on the other hand, suggest that conditions have started to improve, partly as a result of the depreciation of the exchange rate since its peak. over the year to september 2013, visitor spending in queensland increased by more than 4 per cent, which is a little higher than its average historically. tourism operators have also been tailoring their services to suit rapidly growing segments of the market, including the chinese market, which grew by 25 per cent over the year to september 2013. speaking of tourists, there are some rather high - profile visitors coming here later in the year. for a few days in mid november, the city of brisbane will be the focus of the

and the european economies ’ lack of flexibility and real mobility in the labour force. the conclusion was that the euro would never exist! the facts have disproved this conclusion. but the very same arguments are sometimes deployed to suggest that the euro - area economy contains some inconsistencies that could endanger its prosperity. what can we say, from an economic standpoint, on this very important question? firstly, that monetary union per se, and wherever it takes place, does not necessarily imply that, at any given point in time, all the participating countries will experience the same rate of inflation or of growth, even though the move to the euro was based on the successful completion of a convergence process. let us focus, for example, on inflation. present differentials do not appear to be very large, in comparison with the experience of the united states, a long - established monetary union of comparable size. data on major cities of the us shows that inflation differentials have been at times very substantial, with divergences of 7 percentage points being recorded in the early 1980s. in the euro area, long - term convergence to a common level of prices gives naturally rise to differences in inflation rates across emu countries. the convergence of productivity and living standards creates a trend towards price convergence, as a consequence of the commonly known balassa - samuelson effect. according to the imf, this effect is estimated to have contributed 1. 5 - 2. 0 percentage points per annum to inflation for eu countries catching up on productivity. the recent statistics available for the united states also confirm that wage and salary differentials within the euro area are by no means atypical in a monetary union : for example, in 2000, in the us the average weekly earnings in the non - durable goods sector stood at usd 546 at the national level, while standing at usd 437 in mississippi and usd 644 in new jersey. i am convinced that we can be reasonably confident in the increasing integration of european countries, and in the fact that economic developments are becoming more and more correlated in the area. it has been highlighted, in the academic field, by several empirical investigations that business cycles are becoming more synchronous across europe. secondly it has often been questioned whether emu can be a success without some form of enhanced political union. certainly, for emu to function well, all member states must be aware of the spill - over effects of all their national policies, especially their budgetary policies. in