and hours worked are well above pre - pandemic levels ( chart 6 ). our most recent business outlook survey showed that labour 2 / 5 bis central bankers'speeches shortages are widespread and that many firms are struggling to fill vacancies. this is particularly the case in quebec. in general, job creation has been strong since the autumn, and the unemployment rate is now at a historical low of 3. 9 % in the province. some of you will say that is all well and good, but couldn ’ t we see stagflation appear in the coming year or so? isn ’ t growth going to slow as the bank of canada raises policy rates? yes, growth will slow — the goal of higher rates is to reduce excess demand and bring it more in balance with supply. that should reduce inflation, undercutting the inflation part of stagflation. for example, there is a lot of excess demand for interest - sensitive goods and for housing, some of the key contributors to inflation pressures. supply and demand should come more into balance in these segments as policy rates rise, reducing inflationary pressures. more importantly, a slowdown in growth does not have to mean high unemployment, which was the hallmark of the stagflation period of the 1970s. right now, job vacancies are very high, which means employers are trying to hire still more workers from a declining pool of labour. by cooling overall demand, we can reduce the demand for labour and the degree of labour shortages in the economy. employers could stop looking for new workers but keep the ones they have — with little impact on the unemployment rate. that is a scenario that delivers a soft landing. while we ’ re thinking about the job market, there is another important point. wage - setting dynamics are different now than in the 1970s. fifty years ago, persistently high inflation played a more central role in the wage bargaining process. this is highlighted by the fact that the average contract length for collective agreements in canada has more than doubled from roughly 18 to 20 months in the early 1980s to 42 months by 2021. 1 this implies that unionized workers see less need now than they did in the 1970s or early 1980s to have their wage contracts frequently updated to catch up to rising consumer prices. the final, and more fundamental, difference between now and the period of high inflation in the 1970s is the inflation - targeting regime adopted by the bank of canada in 1991. from this first agreement with the government of canada,

jens weidmann : prospects for the economy speech by dr jens weidmann, president of the deutsche bundesbank and chairman of the board of directors of the bank for international settlements, at the jahresempfang der wirtschaft, mainz, 7 february 2017. * * * 1 welcome mr friese dr bennecker dr gunster ladies and gentlemen many thanks for your kind welcome. seeing as we are well into the fifth season of the year, as the carnival period is known here in this part of germany, and unmistakably so when i see the festive decorations festooning this venue, one or two of you might be expecting a traditional, witty carnival speech, or at least be hoping, deep down, to hear something equally entertaining. well, i ’ ll have to disappoint you on that score, i ’ m afraid. central bankers are widely regarded as somewhat dreary speakers, especially so because of the dry topics they drone on about. they ramble on about monetary policy transmission channels, financial pro - cyclicality and macroprudential instruments. worse still, they love to use acronyms like pspp, tltro or ssm – terms which, for the uninitiated, often mingle to produce an indigestible alphabet soup. and wasn ’ t it former bank of england governor mervyn king who once posited that " few are braver than those who choose to listen to a central banker "? it ’ s all the more cheering, then, to see that there are so many brave souls in and around mainz... perhaps that ’ s because central banks have been credited with a political role that extends far beyond the narrow field of monetary policy. after all, in the midst of the crisis, central banks were repeatedly described as the only institutions capable of taking action and had new tasks outside the remit of monetary policy thrust upon them. or maybe it ’ s also because the current monetary policy stance is directly affecting you, ladies and gentlemen, in one way or another. you will have felt the impact of the low - interest - rate policy at close quarters, no matter whether you are an entrepreneur, a taxpayer, a property buyer, or a saver or member of an occupational pension scheme whose concerns dr bennecker has already outlined. and the entrepreneurs among you, especially, will naturally also be wondering which way the economy will go in the foreseeable future and what