will be very new experience for quite a lot of australians. close to half the workforce has never seen really high, nationwide unemployment. a lot of people in business have, i suspect, not seen how tough conditions can become when virtually every industry and region is contracting. that they have not seen this is a good thing – in the sense that it results from the fact that bis central bankers ’ speeches we have not a really serious downturn for a long time now. but if one comes, it will be a shock. • a decade from now, i suspect the art of economic forecasting won't have changed much. in my 35 years as a maker, observer and user of forecasts, i think forecasts have improved. part of that has come from learning more about how economies work. but a lot of it, i suspect, has come from what could be described as improved “ nowcasting ” : finding ways of assimilating a host of disparate pieces of information to judge more accurately what the economy has been doing in the very recent past. ( that's probably where “ big data ” potentially has some use. ) that provides a better “ jumping off ” point for the forecast profile, which is important because most revisions to numerical forecasts for annual growth or inflation still seem to come from surprise about the current and most recent previous quarter. when all is said and done, however, it remains the case that “ forecasting is hard, especially about the future ”. 6 • but, finally, human nature won't change. that means that we, as human beings, will be irresistibly drawn to those who claim to be able to forecast the future, beat the market, and give us the illusion of certainty and control. so there will continue to be interest in forecasts, and the abe forecasting conference will, i'm sure, go from strength to strength. thank you. the un projects india's total population to surpass china's in seven years and the working - age population to surpass china's in 2025. the un projects india's working - age population to increase by 250 million by 2040, to 1. 11 billion ( compared with 866 million in china ). bis central bankers ’ speeches

##2 ), pages c1 - 33, march. see fatih guvenen, serdar ozkan and jae song, ( 2012 ), “ the nature of countercyclical income risk ”, nber working papers 18035, national bureau of economic research, inc., for new evidence from the united states. bis central bankers ’ speeches prices. 7 nevertheless, for most oecd countries for which data are available, there is thus far little evidence of changes in household income distribution in the two years following the start of the downturn, from 2007 to 2009. once more data become available, however, larger changes can be expected over the coming years, especially in countries like spain that suffered a severe slump in the housing market and massive job losses in the construction sector, mostly for temporary workers. taken together, these factors suggest that unemployment remains a crucial determinant of inequality and poverty. there is a need for a comprehensive strategy to support job creation and ensure that the unemployed are employable. in the global economy, the comparative advantages of european economies rest very much on human capital and skills. active labour market policies and investment in higher education are the most powerful instruments at the disposal of governments to counter rising inequality and to foster employment. 8 this leads to a simple policy message. at a time when fiscal policies are being reorganised in european countries, reflecting the crucial need to restore the sustainability of public finances, it is essential that the composition of fiscal adjustment preserves governments ’ ability to invest in skills and recreate comparative advantages in their economies, and that they are supported by mobilisation of eu instruments. can monetary policy affect inequality and poverty? but let me now return to the contribution that the central bank itself can make to reducing inequality and poverty. is there evidence that monetary policy affects inequality? i will discuss this question from two perspectives : first, the immediate distributive effects of monetary policy and inflation ; and second, the benefits of macroeconomic stability for the more vulnerable. because monetary policy is transmitted through many channels, direct and indirect – interest rates both current and expected, credit extension, asset prices – and because households differ in many respects – with regard to socio - demographic factors, such as age and education, as well as economic variables, such as income, wealth, employment status and housing status – monetary policy does not affect all households in the same way. many channels through which monetary policy affects individuals in different ways may be at work, and it is