, the blue brain project is setting out to reconstruct the brain piece by piece by building a virtual version in a supercomputer ( see http : / / bluebrain. epfl. ch / page - 52063. html ). farmer and hepburn ( 2014 ). hansen and sargent ( 2010 ). bis central bankers ’ speeches doing so for the next 12 quarters. japan has had no equivalent period of sustained growth at or above its pre - crisis rate in the past 25 years. as for deflationary threats, one guide is found in market measures of medium - term inflation expectations. at the 3 – 5 year horizon, consensus inflation expectations in japan have averaged around 1 % over the past 15 years. in the euro - area, inflation expectations have recently fallen to around 1. 8 % on deflationary fears. in the uk, meanwhile, inflation expectations have remained relatively stable at around the 2 % target throughout the crisis period. financial markets, at least, do not appear to be fearful of deflationary ghosts in the uk. a second uncomfortable scenario, the flip - side of the first, would be if inflationary pressures instead took hold. again, it is important not to dismiss this risk out of hand. monetary policy is in unknown territory. the most extraordinary dose of monetary medicine perhaps everwitnessed has been administered to a patient now whistling their way around the hospital ward. an over - reaction to the drugs cannot be ruled out. there are already some signs of the economy ’ s pulse quickening. the confidence fairy is back, after six years in rehab. levels of consumer confidence are now above 2007 levels, retail spending is rising at its most rapid rate since 2004 and levels of job security are at their highest since at least the 1990s. this feel - good factor is adding momentum to the uk housing market. businesses, too, have rediscovered their mojo. surveys of output intentions are close to record highs. quarterly employment growth is running at its fastest rate since the series began. surveys of skills shortages point to the possibility of upwards, if localised, wage pressures. output growth in 2014 q1 is nearly 1 % higher, and unemployment rate close to 1 percentage point lower, than the bank expected last august. if history is any guide, these errors tend to be positively correlated, upside as well as down. yet at the same time, the inflationary risks posed by such a scenario should not be overstated. as output and unemployment have surprised

for expected inflation three years ahead. i have covered a broad range of topics here today, a lot of charts – but there ’ s economists for you. as i conclude my remarks, i cannot help but put the challenges that we face today in a wider historical context, including the challenges donal nevin and others faced in the 1970s and 1980 ’ s. while historical parallels are dangerous, the one constant is that the predominate aim of public servants, past and present, is to serve the public good through analysis that best informs policy decisions. i hope what i have set out today gives a sense of the challenges faced through our own informed perspective on inflation and labour market developments and how these might inform monetary policy. i hope i have done just that, and, look forward to the discussion. thank you. 1 turlough o ’ riordan, march 2022, dictionary of irish biography. the online archives of the statistical and social inquiry society of ireland and national newspapers also contain references to donal nevin ’ s many contributions to policy issues of the day. irish independent obituary 3 fiscal frameworks have also been strengthened in ireland and across the eu, with an enhanced role for independent fiscal councils in monitoring and assessing the fiscal policy stance. 4 blanchard ( 1986 ) explains how a wage price spiral can emerge when wage and price setting is staggered. de long ’ s ( 1997 ) paper on inflation during the 1970s describes nominal wage dynamics during this period, as well as policy failures that ultimately led to the volker disinflation of the early - 1980s. 5 “ wage growth in europe : evidence from job ads ”, pawel adrjan and reamonn lydon. central bank of ireland economic letter, vol 2022, no. 7. 6 similar points have been made at the june 2022 ecb forum on central banking policy panel in sintra, and by gopinath ( 2022 ) at the recent jackson hole symposium. see “ two per cent inflation target ”, an explanatory note from the ecb. 8 these estimates, from kalemli - ozcan et al. ( 2022 ), uses data through to end - 2021, when inflation was averaging 4 - 5 % in the euro area and 6 - 7 % in the us. see hopkins and sherman ( 2021 ), byrne et al. ( 2020 ), hodbod et al. ( 2021 ) and datta et al. ( 2022 ) for a description