is hope that some exogenous shock, or just pure luck, will raise productivity. we would have to admit that there is an element of truth in this explanation if we look at the history of prosperous cities, as highlighted by enrico moretti, an expert in urban economics. 9 janet l. yellen, “ recent developments and the outlook for the economy, ” remarks at the city club of cleveland, july 10, 2015. paul krugman, “ the myth of asia ’ s miracle, ” foreign affairs, vol. 73, november / december, pp. 62 – 78, 1994. enrico moretti, the new geography of jobs, mariner books, 2013. bis central bankers ’ speeches for instance, the reason why seattle, washington, became a high - tech industry hub depended to a large extent on the fact that the founders of microsoft had grown up there and wanted to relocate their company to a place familiar to them. similar stories can be found for other u. s. high - tech cities. if these cases provide a complete explanation of productivity growth, all we can do is wait and hope for a genius like bill gates or steve jobs to be born by chance in our country. fortunately, however, economic literature is much more hopeful in this respect : productivity is largely endogenous. iv. how to raise productivity in the economic literature, there is a long list of factors that are thought to have a positive impact on productivity growth. i do not intend to go through all of them but, instead, i would like to focus on three things that i think are of particular importance. the first is human capital. measuring human capital is a difficult task, but one of the simplest indicators often used is the number of school years. in chart 7, the greater the number of years spent in school, the darker the green in which the country is colored. in asia, there are a number of dark green areas, such as japan, korea, malaysia and sri lanka. as you would expect, hong kong and singapore also belong to this group, although it is not shown clearly on this map. one may get the impression that asia as a whole is not as green as north america or europe, and is more or less similar to south america. this would seem to indicate that there remains significant potential for further accumulation of human capital in the region. at the same time, there are some interesting figures relating to u. s. universities, which are generally acknowledged as providing the

many believe, budgetary austerity and reforms do not penalise governments. indeed, in recent years in europe there has been a positive correlation between political popularity and budgetary rigour ( see chart 1 ). the correlation is much stronger than the one between political popularity and economic growth ( see chart 2 ), which indicates that, for a given level of growth, healthy public finances reward governments. this suggests that political leaders who have the courage and the ability to reconcile balanced public finances with the economic growth are rewarded over time. democratic systems should not to be blamed if advanced economies risk stagnation and do not grow. they are in danger only if people succumb to the illusion or become resigned to thinking that democracies do not allow change. centuries of history demonstrate just the opposite : that without democracy there is no change, and sooner or later there is decline. thank you for your attention. chart 1 trust in national government vs. government balance ( average 2005 – 2009 ) – eu sources : eurostat, eurobarometer and ecb calculations. note : “ tend to trust government ” is the proportion of respondents to the may 2010 eurobarometer survey who reported trusting their national government. chart 2 trust in national government vs. growth per capita ( average 2005 – 2009 ) – eu sources : eurobarometer, ec and ecb calculations. note : “ tend to trust government ” is the proportion of respondents to the may 2010 eurobarometer survey who reported trusting their national government.