rate, the labour force has contributed negatively to gdp growth in almost every year since 1998. a firm turnaround in the japanese economy requires a sustained increase in productivity, which entails structural reforms to enhance product market flexibility and spur competition and innovation in the services sector. emerging asia : the rise of domestic demand 12. in comparison, emerging asia has weathered the financial storm best, with the region ’ s total production now one - third higher than what it was in 2008. 13. china secured a quick and vigorous rebound from the depths of the global trade collapse in early 2009. it has since reined in inflationary pressures and indications are that it has achieved a “ soft landing ” of its economy, registering an estimated 7. 8 % growth last year on the back of solid consumer demand and infrastructure investment. while china faces significant economic restructuring challenges, its impressive growth trajectory appears intact for now. 14. india too rode through the global financial crisis comfortably but is now going through a weak patch. but if it regains its reform momentum and begins to address its infrastructure deficit, growth should pick up to levels closer to those seen in the last decade. 15. in the asean – 4 economies of indonesia, malaysia, thailand and the philippines, domestic demand has displayed surprising resilience. this has held up economic growth, despite prolonged weakness in external demand and continuous terms - of - trade shocks. 16. but emerging asia is also not without its risks. while the advanced economies are deleveraging, emerging asia is re - leveraging. credit growth has been climbing steadily, from an average 8 % in 2009 to 15 % in 2011, before easing to 12 % in last year. the private bis central bankers ’ speeches credit - to - gdp ratio for the region, at 120 %, is higher than during the asian financial crisis. there is good reason for policymakers to be on their guard. macro policies : the unfinished agenda 17. so, where is the global economy on its post - crisis journey? while economic prospects for 2013 look slightly brighter and tail risks have diminished, the global economy and financial markets remain fragile and vulnerable to shocks. 18. but this halfway point provides us, perhaps for the first time since the crisis, the opportunity to look ahead and pose the question of what is required to ensure a smooth return to normalcy. • the advanced economies need to achieve fiscal consolidation alongside economic growth and chart an effective exit strategy from unconventional monetary policies. • the emerging market economies need to deal with

has responded to the needs of a changing economy, and i believe that as we address such challenges as the retirement of the baby - boom generation, advancing technology, and globalization, our education system will again make an important contribution to the adjustment process. that means, of course, that we will have to grapple with difficult issues – how to boost educational attainment, particularly for minorities and immigrant youths ; how to make more consistent and noticeable progress in raising academic achievement ; and how to ensure that older workers have meaningful opportunities to refresh their skills. what can be done so that our educational system will continue to play a significant role in supporting economic change? in broad terms, we must begin by recognizing that learning is a lifelong process and that we have opportunities to improve education at every point along the way. many of these opportunities lie outside the traditional route of a kindergartenthrough - twelfth - grade education followed by four years of college. i ’ d like to comment briefly on what economists have found about the benefits of educational investments at different points in the life cycle. early childhood education building the foundation for lifelong learning from the earliest ages is crucial ( heckman, stixrud, and urzua, 2006 ). research suggests that the home environment is especially important and that children who start behind find catching up increasingly difficult ( heckman and masterov, 2007 ). thus, the payoff from high - quality pre - school and home visitation programs is likely very high, especially for children born into poor or otherwise disadvantaged families. recent research – some sponsored by the federal reserve bank of minneapolis in collaboration with the university of minnesota – has documented high returns from early childhood programs in terms of subsequent educational attainment and in lower rates of social problems, such as crime, teenage pregnancy, and welfare dependency ( burr and grunewald, 2006 ). 5 but early childhood education is only the beginning. positive results from programs such as head start dissipate without further high - quality schooling at the elementary and secondary levels ( garces, thomas, and currie, 2002 ). elementary and secondary schooling deciding what and how to teach students from kindergarten through high school and then evaluating our schools ’ effectiveness in preparing students for the workforce and a lifetime of the results of two prominent international assessments – the trends in international mathematics and science study, conducted under the aegis of the international association for the evaluation of educational achievement, and the organization for economic cooperation and development ’ s program for international student assessment – are summarized in