##acency by the success of short - term volatility management. 20. in particular, there remain important long - term challenges to the sustainability of growth in indonesia. as we all aware, in many emerging market including indonesia most policy responses have been focused on demand - side management through monetary or fiscal policy. after all, pursuing demand management policies alone can only take us so far – somewhat akin to stepping on the gas pedal without “ upgrading ” or modifying the car we drive. 21. thus, from domestic backdrop, bank indonesia give serious consideration on the need to address structural issues to be very pressing since the real lift of potential growth of the economy must essentially come from supply - side progress. without effective structural policy, an external shock would always require substantial adjustment in the demand side that will only intensify boom - and - bust cycle in the economy. 22. indeed, the task is not going to be easy. reorienting the economic growth strategy to focus more on skills development, innovation, and productivity involves deliberate planning over relatively long stretch of time. two principles are of the essence : consistency and continuity. due to the long - term nature of structural readjustments, continuity of policy implementation is required for the policy measures to take meaningful effect on the economy. 23. the good news is that some of the infrastructure projects in indonesia have already been in progress and will continue move on regardless of “ the political regime shift ”. last month, the construction of double tract railways just completed, connecting jakarta and surabaya, as the biggest and second biggest city respectively. meanwhile, the other many ongoing projects remain the responsibility of the next administration to ensure adequate infrastructure in the medium term. 24. to be sure, in indonesia, democracy is a continuous process since its conception fourteen years ago rather than a fixed state of bliss to be attained. the process is shaped by voices of the people, under an institutional setup that provides checks and balances. with more than 500 elected offices throughout the archipelago, election and peaceful transition of power actually occur almost every day in indonesia. i am confident that the upcoming presidential elections will be no different. and it will be a testament to the strength of our democracy and its ability to support economic development. it ’ s my firm believe that the next administration will ensure quality public policy that can enhance the country ’ s competitiveness and sustain long - term growth. outlook 2014 ladies and gentlemen 25. against the background of quite an unpredictable external environment, i believe that the

. britain was entering a severe recession that year at the end of the napoleonic wars with deflation of more than 10 %. the annual return in 1817, the year of jane ’ s death, was actually negative 2 % as inflation rebounded. a few years later britain reverted to its pre - war monetary standard by restoring sterling ’ s convertibility to gold. over the following 50 years, nominal interest rates came down a little but stayed in the 3 - 5 % range. broadbent ( 2018 ). from a narrow financial stability perspective, growth of own currency sovereign debt, especially when financed internally, is not a good predictor of financial crises. see cunliffe ( 2019 ). all speeches are available online at www. bankofengland. co. uk / news / speeches but real returns on the navy fives and similar fixed rate securities continued to be highly volatile reflecting the very large swings in inflation for much of period – a period that was punctuated by frequent financial crises. that perhaps illustrates that there is a great deal more to stability - both financial and monetary - than nominal interest rates. all speeches are available online at www. bankofengland. co. uk / news / speeches references anadu, k., m. kruttli, p. mccabe, e. osambela and c. h. shin ( 2018 ), the shift from active to passive investing : potential risks to financial stability?, working paper pra 18 - 04, federal reserve bank of boston. andersen, a., c. duus, and t. jensen ( 2016 ), household debt and spending during the financial crisis : evidence from danish micro data, european economic review, 89, pp. 96 - 115. avery jones, j. ( 2019 ), jane austen ’ s income : insights from the bank of england archives, bank underground blog, 2 august 2019 bank of england ( 2019 ), financial stability report, issue no. 45, july 2019. bank of england ( 2018 ), inflation report, august 2018. bank of england ( 2017a ), stress testing the uk banking system : key elements of the 2017 stress test, march 2017. bank of england ( 2017b ), financial stability report, issue no 42, november 2017. borio, c. ( 2017 ), secular stagnation or financial cycle drag?, keynote speech, national association for business economics, 33rd economic policy conference. brainard, l. ( 2017