. china, on the other hand, will need to rely more on domestic demand as the engine of growth. this rotation of global demand is needed as part of the solution to the global ( current account ) imbalances that were a significant part of the genesis of the financial crisis. without this rotation of demand, resources will not be fully utilized, and global economic growth will be neither as strong, nor as sustained, as it could be. in addition to these requirements, powerful forces are changing the economic landscape. one is the difference in the growth rates of potential output ( the rate of growth that can be j. m. keynes, the general theory of unemployment, interest, and money ( london : macmillan / st martin ’ s press, 1936 ; reprinted 1970 ), p. 297. sustained over time without inflationary or deflationary consequences ) that we are likely to see over the next five to ten years. for the major industrial economies, that rate of growth of potential output is estimated to be between 2 and 2 1 / 2 per cent. for the major emergingmarket economies, the rate is estimated at between 5 and 8 per cent. 2 much of this difference can be attributed to the fact that emerging - market economies have “ catching up ” to do – by combining labour and more intensive use of capital in production – and to the fact that they have a large and growing pool of labour to draw upon. this rotation of demand and the differing rates of growth of potential output will have significant implications for trading patterns and investment flows. while it ’ s not possible to be precise, and it depends on whether one uses market or purchasing - power - parity exchange rates, major emerging - market economies will likely account for over 55 per cent of global output by 2020, compared with about 45 per cent today. 3 to be sure, there are many variables and uncertainties at play that will affect how the global economic landscape will look ten years out. some refer to these uncertainties as the “ known unknowns ”. but, one thing seems clear – the economic landscape ten years from now will be significantly different from that of today. an important task for public policy will be to shape that outcome – remove some of the unknowns – for the benefit of everyone. on the heels of the global financial crisis and the great recession, one element of that task is to restore trust in markets, particularly financial markets. trust is needed if financial markets are to price assets correctly and allocate capital

mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada and chairman of the financial stability board, at the press conference following the release of the monetary policy report, ottawa, ontario, 17 april 2013. * * * good morning. tiff and i are pleased to be here with you today to discuss the april monetary policy report, which the bank published this morning. • global economic growth has evolved broadly as anticipated in january. • in the united states, the economic expansion is continuing at a modest pace, with gradually strengthening private demand partly offset by accelerated fiscal consolidation. • significant policy stimulus has been introduced in japan. • europe, in contrast, remains in recession, with economic activity constrained by fiscal austerity, low confidence and tight credit conditions. • after picking up to very strong rates in the second half of 2012, growth in china has eased. • commodity prices received by canadian producers remain elevated by historical standards and, despite recent volatility, overall they are little changed since january. • the bank expects global economic activity to grow modestly in 2013 before strengthening over the following two years. • following a weak second half of 2012, growth in canada is projected to regain some momentum through 2013 as net exports pick up and business investment returns to more solid growth. • consumer spending is expected to grow at a moderate pace over the projection horizon, while residential investment declines further from historically high levels. growth in total household credit has slowed and the bank continues to expect that the household debt - to - income ratio will stabilize near current levels. • despite the projected recovery in exports, they are likely to remain below their prerecession peak until the second half of 2014 owing to restrained foreign demand and ongoing competitiveness challenges, including the persistent strength of the canadian dollar. • on a quarterly basis, growth in canada is expected to pick up to about 2. 5 per cent in the second half of this year. despite this expected pickup, with the weak growth in the second half of 2012, annual average growth is now projected to be 1. 5 per cent in 2013. the economy is then projected to grow by 2. 8 per cent in 2014 and 2. 7 per cent in 2015, reaching full capacity in mid - 2015. this is later than anticipated in january. • total cpi and core inflation have remained low in recent months, broadly in line with expectations in january. muted core inflation reflects material excess supply in the economy