##turn. norway is a small open economy with substantial wealth invested abroad. as a nation, we are completely dependent on a functioning international system of free trade and investment. in the short term, major economies have less to lose from closing themselves off. we trust that they will not, after all, abandon the global economic system that has been built up over the past 70 years. hayek or keynes? the current situation on our continent – europe – has much in common with the 1930s. unemployment is high, while there is a need for investment in infrastructure, new technology data from ceic data company, which uses china iron and steel association ( cisa ) as its source. according to ceic, debt - to - equity ratios at these companies are around 70 percent, up from 50 percent in 2001. bis central bankers ’ speeches and education. there are also many advocates of investing in a “ green ” shift towards sustainable growth. but investment is not forthcoming. in the light of the pessimism now holding sway in europe, this is perhaps not surprising. as keynes wrote in his letter in 1932 : “.... the [ released ] real resources do not find a new home waiting for them. in present conditions their entry into investment is blocked by lack of confidence. ” keynes would have said that this is the time to deploy public investment to create jobs for idle labour. the cost to society would be low. wages would replace expenditure on benefits and social security. value - added would be generated, unemployment would decrease and employment would rise. this solution seems obvious. but it is not happening. in southern european countries in particular, government debt is high and growth is low. future public funding is tied up in servicing debt and funding public services and pensions. public administrations are cumbersome, inefficient and often over - staffed. the willingness and ability of governments to increase taxes, and perhaps the public ’ s confidence in the authorities, is low. the trap many european countries fell into was accumulating debt and spending borrowed money in good times, leaving them without the fiscal muscle to pursue a rational countercyclical policy in the face of crisis. this has made the economic downturn even heavier to bear. a number of european countries have experienced stagnation or a fall in gdp – some have faced a considerable decline in nominal gdp. as a result, debt to revenue ratios have increased, further reducing the ability to escape the debt crisis. the unrest surrounding europe is

manuel sanchez : the united states and mexico – a lasting bond remarks by mr manuel sanchez, deputy governor of the bank of mexico, at the mosbacher institute, bush school of government and public service, texas a & m university, college station, texas, 15 september 2016. * * * it is a pleasure and an honor to participate in the series “ conversations in public policy ” held by the mosbacher institute at the bush school at texas a & m university. the occasion is important for at least two reasons. texas a & m is a world - renowned educational and research center, with a 140 - year history, and it is located in the state with the most significant social and economic connections to mexico. the longstanding relationship between the lone star state and mexico is deeply rooted in a common cultural and social heritage. today, i would like to talk first about the long - term economic ties between the united states, in particular texas, and mexico. second, i will focus on financial markets and challenges. third, i will examine recent economic developments and the outlook, and finally, discuss inflation and monetary policy in mexico. as usual, my remarks are entirely my own and do not necessarily reflect those of the bank of mexico or its governing board. long - term economic ties mexico has long been in a process of increasing economic integration with the united states, encompassing goods and services, capital, and labor markets. these links, reinforced by the north american free trade agreement, have yielded substantial benefits on both sides of the border, including more competition, efficiency, job creation, and consumer wellbeing. the most significant bond with any state is with texas, given its place as the tenth largest economy in the world and the extensive border it shares with mexico. in terms of trade of goods, the united states is mexico ’ s most important partner in both imports and exports, while mexico is second in exports and in imports for the united states. texas, however, is number one in both categories for mexico – and vice versa. the backdrop to bilateral merchandise trade is a long - term, growing industrial integration between the two countries. in particular, mexico ’ s manufacturing production holds an extraordinarily high correlation with u. s. manufacturing output. also, the united states, and texas in particular, are important providers of foreign direct investment to mexico, transferring technology and knowhow, while exploiting mutually advantageous business opportunities. in fact, mexico is the second most important destination for