new investment opportunities in the us has attracted capital inflows to finance higher investment, which in turn has led to a strong dollar. if expectations about higher productivity growth prove well - founded, then us businesses and families will gradually repay the debts they have incurred, and the current account deficit will subside, with an adjustment of the dollar accordingly. although the imbalances will unwind, they will do so slowly, allowing the us economy to recover from its present slowdown. but if there were to be a reappraisal of the extent to which productivity growth had increased, then a more sudden downward adjustment to spending could result. in such circumstances, the imbalances would unwind more rapidly, leading to adjustments in asset prices, both in stock markets and exchange rates. that would imply a much bumpier ride for both the united states and the world economy in the months ahead. clearly, there have been some downward adjustments to stock prices in the us over the past year. but their scale has been limited, and there does, at least so far, appear to be no significant reappraisal of the impact of new technology on us productivity growth. although it is not easy to reconcile the recent sharp falls in confidence in the us and the relative stability of stock market prices, it would appear that investors generally have taken comfort from the federal reserve's ability and willingness to react to the latest data, and take appropriate action. the second cloud on the horizon is the risk to emerging market economies posed by the us slowdown and the unwinding of imbalances in the industrialised world. in some emerging markets, especially those in east asia exporting high technology products to the united states, the immediate outlook is for weaker economic growth. but for other countries, especially in latin america, the fall in us interest rates and in the dollar against the euro will mitigate the direct loss of export demand. but the major concern is to avoid another financial crisis, of which there have been too many in the past five years. from mexico in 1995, through the asian crisis in 1997 and brazil in 1999, and, more recently in argentina and turkey, sudden reversals of short - term capital flows have created financial crises. in many cases, these crises have proved devastating to the citizens of the countries affected. the existence of deep and liquid international capital markets offers opportunities for greater risk diversification by both borrowers and lenders. but it also increases the risk of contagion from

the imf lending toolkit to make it more flexible and relevant, and adapting views on capital flow management measures in reaction to the changed operating environment. however, this desire to cooperate seems to have faded somewhat and some g - 20 countries have since become or are becoming inwardly focused. last year we witnessed various unexpected political developments which could have a bearing on the work of the g - 20. in 2017, there could be more surprises in store as far as voter choices are concerned, and thus major political shifts with potentially significant economic consequences. much uncertainty currently exists with regard to the future policy direction in some of the major economies, which brings with it the possibility of increased financial market volatility. disclaimer : there may be minor differences between this version of the speech and the delivered german version the pushback against globalisation has become a popular theme, as an increasing number of voters believe that there is not much to gain from the current system. instead, many believe that globalisation has benefited a small privileged elite. there are indications that policies most likely to be enacted in reaction to this phenomenon include increased restrictions to immigration and trade. simultaneously, greater political tensions globally are, making it harder for governments to pursue the structural reforms needed to encourage investment and so boost productivity and growth. the g - 20 needs to intensify its communication and highlight that with globalisation comes more trade, more wealth, more investment, and ultimately more jobs. it means lower - cost goods from abroad, which increases spending power and results in a higher standard of living. competition from abroad forces local firms to become more efficient and to use resources more efficiently. clearly, globalisation is good, but we need to acknowledge the challenge that everyone should share in its fruits. we need to ensure that globalisation is accompanied by greater inclusiveness and reduced inequality. regarding the g - 20 structural reform agenda and the 2 - in - 5 objective, we have made progress and implemented reforms, but, once again, we could do more. the structural reforms implemented thus far have contributed to supporting economic growth and have therefore contributed to the collective growth ambition set by the brisbane summit. however, we know that potential growth remains low, so we need to step up our implementation efforts, reassess on a continuous basis whether we are still on the right path with our structural reform initiatives, and review and change course where necessary a final issue that i would like to point out relates to outreach. it is important to bear in mind that, while