in ame gdp growth. the study also echoes the findings of previous research on the growth - enhancing effects of structural reforms and fiscal prudence among both groups of economies. for ames, fiscal prudence, financial reforms and trade openness are on the list of factors serving to enhance growth. for emes, meanwhile, in addition to these variables, financial deepening and labor market flexibility also help to promote growth. these positive growth spillovers and growth effects of structural reforms together suggest that the contributions to growth of any single country ’ s reforms can go well beyond its own national borders. world economic growth can obviously thus be more significantly enhanced if reforms are undertaken simultaneously in both groups of economies, and their trade openness expanded. these findings imply that emes ’ growth can be an effective source of growth for ames, as well as ames ’ for emes. when asia was hit by its crisis in the late 1990s, it was the solid growth in ames that pulled it out of recession. and emes ’ healthy growth can and should likewise now be a blessing for ames faced with the difficult short - run tradeoff between debt reduction and growth promotion. theory tells us that the competitive or non - cooperative nash equilibrium will be suboptimal in the presence of externalities, and also that a social planner, if one exists, can achieve a better outcome. by the same token, the positive growth spillovers between ames and emes bis central bankers ’ speeches suggest the need for a global jurisdiction, that can internalize such externalities in order to maximize growth. but the reality is very far from one characterized by existence of a global jurisdiction, and better described as one of a non - cooperative equilibrium. this is why i argue for better and more international cooperation, for the sake of growth and financial stability. let me elaborate on this point further. i believe that emes, and particularly large emes, need to shift from external demand - driven growth to more domestic demand - driven growth. this latter type of growth will not only be less prone to drive a buildup of global imbalances but also contribute more to world economic growth, through positive spillovers. such a shift may however be constrained – at least during the transition period – by the financial vulnerabilities of these countries to external shocks, particularly shocks related to the volatile global liquidity cycle. during their transitions, the current accounts of emes may be in deficit for extended periods of time before they return to balance. and

to “ business as usual ”, we cannot possibly say that we have learned from the crisis. did our way of thinking change? did our way of conduct change? did our organization change in response to the global financial crisis? i believe that public expectations of the central bank and the importance of its role are greater now than ever before. an exit strategy refers to the unwinding of the various emergency measures that were introduced in the process of overcoming the financial crisis. we need to marshal our combined wisdom to seek the most appropriate ways to exit, while paying attention to changes in the economic environment both at home and abroad. we must be able to chart a course for the future and take carefully thought - out measures that the markets will voluntarily comply with. on the other hand, thinking on the new roles of the central bank must also take on a new dimension. these ponderings should be raised to a level at which they ultimately contribute to the development of our nation. it is true that we have as rivals our peers within the organization and elsewhere in the domestic sphere. but at the same time, we must regard the central bankers of other nations and entities, such as the us, the eu, japan, china and the uk, as our true competitors. if we fall behind them in terms of contributions made to national development, we cannot say that we are fulfilling our responsibilities. this should be the yardstick for judging the international competitiveness of a central bank. please always bear in mind that your competing counterparts are in the central bank of other nations. it goes without saying that we must also step up our efforts to enhance cooperation with them. i expect such efforts to shift our thinking and behavior from being retrospective and inward - looking to a future - oriented and global - looking one. as governor of the bank of korea, i have unbounded confidence in your ability and highly value your pride in the bank. it is inconceivable that the bank, made up of the most talented people in korea, cannot come up with solutions to korea ’ s economic issues. i have held various posts before coming here. i think all of them will together serve as a cornerstone for me to fulfill my responsibilities as governor of the bank of korea. at this difficult time, all of us working for the central bank must rethink the mission for our time. in the global age in which economic borders are disappearing, we must boldly break down barriers that have limited our scope for thinking and behavior.