a 7 per cent share of global economic activity as recently as 2000 ( measured at market prices ) to an estimated share of close to 18 per cent as of 2013. measured in terms of purchasing power parity, the latest number would be even more impressive. the process has had some occasional set - backs, of course, and is not without precedent – i am thinking here of the late 19th and early 20th centuries and the emergence of the united kingdom and the united states. but such growth is nevertheless extraordinary. emerging asia has accounted for more than 40 per cent of the world ’ s growth over the past 10 years, and hundreds of millions of people have been lifted out of extreme poverty. like most episodes of successful development in the post - war period, the asian miracle has been driven by export - led growth. in many cases this was supported by a fixed exchange rate regime, and an extensive system of currency and capital controls designed to achieve and preserve international competitiveness. of course, there has been considerable variation across countries with regard to their economic circumstances, institutional arrangements and development strategies. the simple picture painted above does not apply to all. nor are asian countries the only ones in the global economy to enjoy sustained external surpluses. more importantly, for every trade surplus, there must be an equal and offsetting deficit, with many advanced countries eager in the past to play this role. bis central bankers ’ speeches such imbalances are not unusual, but the extent to which capital was “ flowing uphill ” during the pre - crisis period was. this was clearly unsustainable. it is one thing for relatively small countries to play this game, but when they grow too large, they soon run out of space. foreign reserve accumulation among the emes since 2000 has totalled more than us $ 6 trillion ( chart 3 ). chart 3 the asian miracle has generated large surpluses and large reserve accumulations the crisis as a catalyst for change when the crisis hit, export markets for the emerging asian economies suddenly imploded. fortunately, many of them had the fiscal and monetary policy space to cushion the blow. however, the crisis merely brought forward a process of global rebalancing that was inevitable. advanced economies had exhausted their credit lines, and emes were running out of foreign customers. advanced economies were going to have to boost domestic savings to get out of hock, and emes were going to have to rely on their own consumers for future growth. the coordinated and ambitious economic recovery

should have been more alert to the possibility that the nature of global spillovers can change over time. a better understanding of these dynamics and how policy actions can ripple around the world should enable more effective global responses to future shocks. labour market recoveries and balance sheets next, i ’ d like to discuss how the labour market has recovered from the pandemic. i ’ ll also talk about the role that balance sheets have played in making that recovery stronger than recoveries following previous downturns. the left - hand panel of chart 1 shows how unusual the recovery phase of the pandemic has been relative to historical experience. despite an unprecedented initial drop, canadian employment took only about 20 months to return to its prerecession peak. this is about 6 months faster than we experienced coming out of the gfc, and at least 18 months ahead of the tepid recoveries that followed recessions in the 1980s and 1990s. as shown in the right - hand panel, the difference in the recoveries following covid - 19 and the gfc was even more pronounced in the united states. research and history teach us a lot about the forces that made many previous recoveries so slow. one lesson is that recessions that take a significant toll on the financial health of businesses, financial institutions or households are often followed by weak recoveries. 4 4 see r. c. koo, the holy grail of macroeconomics : lessons from japan ’ s great recession ( singapore : john wiley & sons ( asia ) pte. ltd., 2009 ) ; a. mian and a. sufi, “ what explains the - 5chart 1 : relative to past downturns, employment in canada and the united states recovered quickly from the covid - 19 recession index : last pre - recession peak level of employment = 100, seasonally adjusted, monthly data a. employment in canada index b. employment in the united states index 8 12 16 20 24 28 32 36 months since last pre - recession peak in employment 8 12 16 20 24 28 32 36 months since last pre - recession peak in employment covid - 19 recession 1981 – 82 recession covid - 19 recession 1981 – 82 recession 1990 – 91 recession 2001 recession 1990 – 92 recession 2008 – 09 recession 2007 – 09 recession sources : statistics canada, us bureau of labor statistics and bank of canada calculations last observation : august 2022 a good example is the united states during the gfc, when a collapse in house prices left many ind