is now very low. the labour market is tight. unemployment has not been as low since the second half of the 1980s, and employment has risen sharply this year. wage - earners and enterprises have both fared well. cheap imported goods have resulted in a subdued rise in consumer prices and a substantial increase in wage - earners ’ real wages. high export prices have restrained the rise in real labour costs. combined with high productivity growth, this has resulted in high corporate earnings and solid growth in employment. at the same time, wage - earners share of corporate value added has been reduced, from around 75 per cent at the end of the 1980s to 70 per cent at the end of the 1990s, and now stands at below 65 per cent. solid productivity growth and high prices for export goods and deliveries to the petroleum sector have contributed to the reduction in the wage share over the past few years. the ample supply of labour has probably had a dampening effect on wage growth. increased globalisation may have provided greater opportunities for norwegian enterprises to relocate production to other countries if labour costs become too high. this probably places some restraint on wage demands among workers in sectors where enterprises have such opportunities. historically, a high wage share has tended to be accompanied by low unemployment. developments in recent years have provided the basis for strong growth in employment while the wage share has fallen. is it possible to sustain the combination of low unemployment and a low wage share? first, it partly depends on whether the positive supply - side conditions are sustained. there is probably symmetry here. should the terms of trade deteriorate, productivity growth slacken and foreign workers return to their home country, the wage share will increase, profits fall and unemployment increase. there is now a prospect of slower global growth. there are also signs that the strong growth in productivity that has been evident in other countries – for example in the us – is moderating somewhat. and we may see a similar trend in norway. second, even without a reversal, profits may fall and unemployment rise. the implications of this will depend on how far businesses, in their search for qualified labour, will go in bidding up wages. it will also depend on how wage - earners react and on their ability to adapt to change. furthermore, it must be expected that the strong krone will shave profits in some enterprises and industries at the moment, even though many have used currency hedging to safeguard their income. even though demand for labour is strong, there is

necessarily to ease credit conditions in the aggregate. in the euro area as a region, there are currently no clear signs of deflation fears ( see slide 11 ) that would justify qe. in addition, the channels of transmission are different. qe is expected to act on risk premia ( primarily term premia ) by subtracting long - duration securities from the market and replacing them with base money, which has a very short duration. this would reduce term premia and bid up the price of long - dated securities. the aim of omts however is not to create an excess demand for duration in the market, but to counteract redenomination risk and squeeze redenomination premia out of bond prices. in fact, omts focus on relatively short maturities, where premia associated with break - up risk are most evident. finally, qe would need to be tailored to the specificities of the euro area, where two - thirds of the external financing of non - financial corporations is extended by banks and which does not have access to actively traded credit markets. conclusions let me conclude. the effectiveness of monetary policy relies on the control of monetary and credit conditions. this ability has been severely tested by the crisis. some of the challenges faced by the ecb have been common to other central banks. the threat to the viability of the interest rate channel, and the consequent need to devise alternative ( “ non - standard ” ) measures exploiting other channels of transmission, is a prominent example. the crisis has taught us that the liquidity channel exploited by monetary policy in the euro area can be very powerful. it has allowed the ecb to maintain the flow of credit to the real economy and ensure price stability even in face of the soaring liquidity and funding risks experienced by banks during the crisis. other challenges faced by the ecb have taken a specific form in the euro area and thus been somewhat different from those experienced by central banks elsewhere. the most obvious one is the sovereign debt crisis, with the associated fragmentation of credit markets across national borders and more recently the break - up fears. the destructive potential of these developments is enormous. this has led the ecb to recently announce its outright monetary transactions in secondary markets for sovereign bonds as a means to safeguard the monetary policy transmission mechanism in all countries of the euro area and to counteract self - fulfilling prophecies. the design of omts has been inspired by the desire to affirm in a lasting