remote solutions during the pandemic probably accelerated the digitization of tasks, which in turn has broader implications for income distribution and productivity growth, as well as the property market. in contrast, other structural trends may have been somewhat arrested by recent events ; for example, pandemic and geopolitical disruptions injected fresh fragmentation impulses to the world economy and possible unmoored economies from their previous low inflation equilibria. 11 these four issues — the complex nature of shocks, along with the appropriate policy response, labour market effects and interactions with pre - pandemic structural trends — are key pivots that confront the global economy. and they will each have some hearing at this year ’ s forum. prof viral archarya started us off last evening with an astute and realistic assessment of the global landscape before us and the vulnerabilities that lurk in financial market adjustments, drawing in insights from his research. 12 for the policy note session on “ labour market policies after covid - 19 ”, our speakers are professor eric french and professor john haltiwanger, two eminent labour economists whose work central bankers have always paid close attention to. they will discuss how countries can best formulate labour market policies in the pandemic ’ s wake to restore and rebuild workers ’ ability to engage in the labour market of the future. 13 at lunchtime, we are privileged to have professor emi nakamura join us virtually. she will speak on “ inflation, monetary policy and the phillips curve ”, a topic that that has become dominant to policy considerations this year. 14 anchoring today ’ s discussions is professor ricardo reis, the author of this year ’ s commissioned paper, who will discuss whether monetary policy has placed an undue emphasis on the natural real rate of interest, which we term r * and measure by government bond yields, a parameter that is inherently tricky to define and problematic to measure. despite these difficulties, r * has seemingly come to occupy a central place in assessments of the appropriateness of the policy stance, a conundrum that professor reis will help clarify. we are delighted that professor andres velasco and professor vissing - jorgensen are with us to discuss the paper. 15 but first, we are honoured to have dr li bo, deputy managing director at the imf, to deliver the opening address for ampf2022. he brings with him a wealth of experience in economic policymaking, serving in a range of monetary - and macro

– did not keep up with changes in the financial sector and were insufficiently attuned to systemic risks. once concerns began to develop about escalating losses at large firms, insufficient liquidity and capital interacted in an adverse feedback loop. funding pressures contributed to “ fire sales ” of financial assets and losses, reducing capital levels and heightening liquidity pressures – culminating in the near collapse of the financial system in late 2008. capital and liquidity several factors encouraged excessive leverage, including market perceptions that some institutions were “ too big to fail. ” 8 financial institutions also had an incentive to engage in regulatory arbitrage, moving assets to undercapitalized off - balance - sheet vehicles. the complexity of the largest banking organizations also may have impeded market discipline. in addition, financial intermediation outside of the traditional banking sector grew rapidly in the changes in payment technologies have been rapid, and an area of particular interest is the fast growth of mobile payment and financial service technologies. the federal reserve has conducted several surveys to understand these developments, and the most recent results are discussed in board of governors ( 2015 ). a substantial body of research finds that financial development supports economic growth, including goldsmith ( 1969 ), king and levine ( 1993 ), rajan and zingales ( 1998 ), and levine ( 2005 ). it is noteworthy that this research emphasizes differences across countries, and that the united states is among the most financially developed countries in the world. beck, demirguc - kunt, and levine ( 2007 ) show that financial development reduces poverty and inequality in a study examining evidence across countries. zingales ( 2015 ) raises a number of questions regarding ways in which distortions in the financial sector may contribute to “ rent seeking ” activity that may promote inefficiency. philippon and reshef ( 2012 ) examine trends in compensation in the financial sector and the contribution of such trends to the increase in income inequality in the united states in recent decades. philippon and reshef ( 2013 ) and cecchetti and kharroubi ( 2012 ) revisit the links between financial development and economic growth, focusing particularly on these relationships around periods of rapid growth in the financial sector or among economies with a large financial sector. for a review of many factors that may have contributed to leverage in the financial sector and a discussion of how, in some cases, these factors reflect distortions that imply leverage was excessive, see admati and others ( 2013a