’ s economic stability over the past few years. indeed, cornell provides a clear example of how a university can play a key role in its local economy. the benefits of the higher education industry go beyond their direct economic contributions, such as employment and spending, for a very important reason : they can increase a region ’ s stock of human capital – that is, the total supply of knowledge and skills in its workforce. a region ’ s human capital contributes to its economic success and resiliency. the educational activities of a region ’ s colleges and universities help build the skills of the local workforce. in addition, the knowledge created by colleges and universities through research activities can play a key role in starting and supporting local businesses. businesses can use university expertise, infrastructure and research findings to help them develop cutting edge products and services. furthermore, universities often employ local businesses to develop and commercialize products that arise from their research activities. this dynamic can expand local economic activity and consequently create new jobs for high - skilled workers in a region. these dynamics are clearly visible in ithaca, where a large number of local companies – in industries ranging from information technology to medical equipment to agriculture – are closely tied to cornell. many of these companies were started by cornell ’ s faculty and students and have remained in the local economy to stay connected to the university. other companies have been attracted to the region because of the access afforded to specific knowledge or new products and processes invented at cornell. higher education institutions such as cornell play a vital role in upstate new york ’ s economy. the relative stability of the higher education industry has, not surprisingly, contributed to a strong economic performance in recent years. ithaca ’ s housing market is among the healthiest in the state, and it has experienced relatively strong employment growth during and since great recession. indeed, unlike most of its upstate peers, ithaca has gained population throughout the past decade. what is the fed doing now? since the beginning of the downturn, the fed has actively used monetary and regulatory policy to help support economic activity and improve economic outcomes – here in ithaca and across the nation – relative to what would have happened in the absence of this support. with regard to monetary policy, the fed has in place a highly accommodative stance. the fomc has said that it will keep short term interest rates at exceptionally low levels for an extended period of time. the fed also retains large amounts of mortgage - backed bonds acquired in order to support the housing market and help bring

is likely to continue recovering on the back of increasing exports and accommodative monetary policy. it must be added, however, that in the labor market employment conditions have not improved greatly, with unemployment, for example, remaining at a high level. consequently, balance - sheet adjustments in the household sector – that is, the restoration of financial health, including the repayment of household debt – are unlikely to gather pace, so that the pace of recovery is likely to remain moderate. economic activity in the euro area as a whole has been recovering moderately, with some differences in growth by country : germany has performed strongly while other countries have lagged behind. although the pace has been slowing, exports and production have continued to increase, while domestic demand components, such as private consumption, have been rising from the previous quarter. for the present, the euro area is likely to continue recovering moderately. however, attention needs to be paid to the effects of fiscal bis central bankers ’ speeches consolidation, which from next year will start in earnest also in the major economies, and to volatility in financial markets due to concerns over the public and private debt problems in some of the peripheral countries. b. emerging and commodity - exporting economies although emerging and commodity - exporting economies are often grouped together, they are a diverse group. here, i will focus on the major east asian economies, since they are most relevant to japan. first, the chinese economy has continued to show high growth of around 10 percent. although the pace of increase in exports has been slowing due to a deceleration in overseas economies such as the united states, domestic demand, as indicated by retail sales and investment in fixed assets, has continued to show high growth. like china, south korea, taiwan, thailand, and other nies and asean countries also experienced continued economic growth driven by domestic demand, although inventory adjustments in it - related goods are casting a shadow on the outlook for exports. overall, it is very likely that emerging and commodity - exporting economies will continue to show relatively high growth due to robust domestic demand and capital inflows from overseas. the pace of growth of the chinese economy is likely to decelerate somewhat due, among other things, to government measures to restrain the increase in real estate transactions. however, given the continuing increase in private consumption, growth is nevertheless likely to remain relatively high. economic conditions in the nies and asean countries are expected to follow a recovery trend due to the inflow of overseas