in many decades, inflation was low and financial systems were stable ( graph 1 ). these are positive outcomes. we should not lose sight of this. graph 1 1 / 13 bis central bankers'speeches there was, though, a change in momentum in the global economy late in the year. this change was particularly evident in europe and it was also evident in china. it has been widely reported in the media, but it is important to keep things in perspective. some slowing in global growth was expected, given that labour markets are fairly tight and the policy tightening in the united states was aimed at achieving a more sustainable growth rate. so, i have been a little surprised at some of the reaction to the lowering of forecasts for global growth, which has been quite negative. we need to remember that the imf's central forecast is still for the global economy to expand by 3. 5 per cent in 2019 and by 3. 6 per cent in 2020 ( graph 2 ). if achieved, these would be reasonable outcomes and not too different from the recent past. graph 2 2 / 13 bis central bankers'speeches what is of more concern, though, is the accumulation of downside risks. many of these risks are related to political developments : the trade tensions between the united states and china ; the brexit issue ; the rise of populism globally ; and the reduced support from the united states for the liberal order that has supported the international system and contributed to a broad - based rise in living standards. one could add to this list the adjustments in china as the authorities rein in shadow financing. the origins of these diverse issues are complex, but there is a common economic element to some of them : that is, the extended period of little or no growth in real incomes for many people. in a number of countries, growth in real wages has been weak or negative for years. advances in technology and greater competition as a result of globalisation also mean that many people worry about their own future and that of their children. politicians, understandably, are responding to these concerns. time will tell, though, whether the various responses help or not. i suspect that some of them will not. over recent months, the accumulation of downside risks has been evident in business and consumer surveys. it was also evident in increased volatility in financial markets around the turn of the year, with declines in equity prices and an increase in credit spreads ( graph 3 ). since then, though, markets

luci ellis : opening remarks to plenary panel at the australasian housing researchers conference opening remarks by ms luci ellis, assistant governor ( economic ) of the reserve bank of australia, to the plenary panel at the australasian housing researchers conference, melbourne, 16 february 2017. * * * thanks to stephanie parsons, hannah leal and tahlee stone for assistance with the graphs. i ’ d like to thank rmit and the organisers of this conference for inviting me to participate in this session. i ’ m very glad to be here and to share the stage with dr rogers. looking at the program, i see many interesting papers. a huge range of housing - related topics are represented, many well outside the reserve bank ’ s remit. but housing, as a sector, is crucial to a number of our core policy functions. in financial stability, my old role, housing is certainly crucial. housing is the biggest asset most households will own and the bulk of household sector wealth. lending against housing is also a large part of financial sector assets. housing outcomes are therefore central both to the welfare of households and the stability of the financial system. the housing sector is also crucial on the monetary policy side, my new role. as a sector, it is especially sensitive to interest rates. it is a key part of the transmission mechanism of monetary policy. housing prices respond to interest rates, and in turn affect household consumption through wealth and collateral effects. and the housing construction industry is one of the most interest - sensitive. the theme of this conference is ‘ housing and inequality ’. i ’ d like to talk about two aspects of that. first, there ’ s the inequality – or rather, diversity – between countries. second, there ’ s the inequality represented by the distribution of housing outcomes across residents of a particular country. institutions matter : the cross - country dimension on the first, we can summarise by saying that institutions matter. country - specific features are very important to housing outcomes, including the outcomes most relevant to monetary and financial stability policymakers. a range of institutions determine the idiosyncratic risk that households face, and thus the credit risk they pose to lenders. these include labour market institutions, the funding of health care, and the structure and generosity of the social safety net. geographic and other factors determine the urban structure, which in turn affects the relative price of housing. we know from economic geography that as city populations rise – and the amenities that go