, and likely short - lived, cyclical slowdown. the bank projects final domestic demand to grow by 4. 2 per cent in 2006, by 3. 2 per cent next year, and by 2. 8 per cent in 2008. however, slowing u. s. growth will have a clear impact on growth in the canadian economy in the near term. the bank is projecting that net exports will subtract 1. 3 percentage points from growth this year and 0. 7 percentage points next year, and that net exports will not contribute to growth in 2008. overall, the bank projects 2. 8 per cent growth of real gdp in 2006, slowing to 2. 5 per cent in 2007, but coming back up to 2. 8 per cent in 2008. in our report last week, we said that the bank currently judges that the economy is operating with a slight amount of excess demand. our projection for growth implies that this excess demand would be eliminated by mid - 2007, and that the economy should then remain near its production potential through to the end of 2008. overall, the canadian economy has performed remarkably well when you consider that it is continuing to adjust to a number of powerful global forces. these include the rise to prominence of china and india, which has led to both stronger global demand for many canadian goods and services, as well as increased competition for some canadian firms. in turn, strong global demand has led to increases in most, but not all, commodity prices, and to an associated rise in the canadian - dollar exchange rate. all of this has occurred at a time when central banks around the world have been withdrawing liquidity from the global economy. of course, economic adjustment is easier said than done. and it is important to acknowledge that adjustment is often very difficult on an individual level. still, taken as a whole, the canadian economy continues to adjust quite well. however, recent sluggish growth in labour productivity has led us to reduce our estimate of potential growth from 3 per cent to 2. 8 per cent over the period to the end of 2008. the bank's projection is that core inflation should remain slightly above 2 per cent over the next few months, before returning to 2 per cent in the second half of 2007, and remaining there through 2008. as for total inflation, it will continue to be affected by the cut in the goods and services tax and trends in energy markets. we expect total inflation to remain below our 2 per cent target, averaging around 1.

this would give us a non - expert panel of around 300 people. this is edging up towards the mid - point of the wagner / vinaimont range and just shy of the athenian boule. by using digital technology, we would aim to connect these citizen panels to allow national, as well as regional, deliberation. this is deliberative democracy in practice. as with the judicial system, it will involve a blend of expert and non - experts. as with juries and judges, there will be a structured process for deliberation. as in the legal system, the role of the non - experts ( citizen panels ) is to help establish the facts and of the experts ( mpc ) to set policy. what ’ s good enough for decisions on incarceration is good enough for decisions on inflation. conclusion central banks, like all public institutions, were created by the public to serve the public. despite a communications revolution, public understanding of central banks remains low and public trust in central banks has fallen. improving both calls for a second revolution, focussed on educating and learning from the general public. the age of innocence may be over, but the era of engagement has only just begun. st this new era may mean 21 century central banks becoming more disbursed and personalised in their communications, creating new infrastructure to interact with the public and extract their folk wisdom. thomas jefferson said democracy is something you can only learn by doing. the same is true of central banking. for the bank of estonia entering its second century, and for the bank of england in its fourth, there is much still to learn and even more to do. all speeches are available online at www. bankofengland. co. uk / speeches references akerlof, g and shiller, r ( 2009 ), animal spirits : how human psychology drives the economy and why it matters for global capitalism, princeton university press. bailey, m, cao, r, kuchler, t and stroebel, j ( 2016 ), ‘ social networks and housing markets ’, nber working paper, no. 22258. baker, s, bloom, n and davis, s ( 2016 ), ‘ measuring economic policy uncertainty ’, quarterly journal of economics, vol. 131, no. 4, pp. 1593 - 1636. bank of england ( 2013 ), ‘ monetary policy trade - offs and forward guidance ’, august 2013. barnes, l, feller