trillion. today, it is around us $ 32 trillion. in the early 1980s, much of the talk about the eurodollar market was couched in terms of whether eurodollar deposits should be added to measures of the money stock, which were the height of economic fashion at the time. as you will recall, this was the period in which the us federal reserve targeted monetary aggregates explicitly and in which weekly monetary aggregates data were scrutinised closely for signs about the likely direction of us interest rates. one can see this background quite clearly in hogan and pearce ’ s little book, which has lots of discussion about whether eurodollar deposits are “ money ” ( they thought not ) or just “ debt ” ( they thought so ). it was only a few years later that most countries gave up the effort to define “ money ” and to conduct their policy discussion in terms of money aggregates, instead going back to the former model of setting a short - term interest rate. it is interesting, though, that in recent years the “ zero lower bound ” for nominal interest rates, which as students we would have been taught about as “ the liquidity trap ”, is no longer a curiosum in the textbook from a bygone era, but has actually been binding in several major countries. one implication, among others, has been that calibrating monetary policy in terms of monetary quantities has come back into vogue in some places – this time with the relevant central banks consciously seeking to increase the size of their balance sheets. whether the relationship between “ money ” and nominal gdp or prices has become any more reliable than it was 25 years ago, when it was found too fluid to be useful for policy purposes, is not clear. in choosing this work for more detailed consideration, i am conscious of the question : was it more hogan ’ s work or pearce ’ s? certainly pearce had already released a piece by that name ( pearce, 1980 ). but equally hogan was clearly a student of financial intermediaries and markets from early in his career, and released two working papers on eurofinance markets in 1979 ( hogan, 1979a and hogan, 1979b ). no doubt he and pearce had exchanged views on such issues over time, particularly during hogan ’ s visit to the university of southampton in 1979. my assumption is that the book published as hogan and pearce ( 1982 ) was a genuinely collaborative effort. bis central bankers ’ speeches but if the language in hogan and pearce

. this creates an opportunity for infrastructure investment to rise as a share of gdp without putting undue pressure on domestic capacity. such a rise could assist in the necessary rebalancing of the economy and help create the basis for a further boost to our national productivity. in conclusion, australia faces a significant challenge over the coming years. while our exports are set to grow strongly, we will need to lift our rate of productivity growth substantially if we are to continue to enjoy the type of increases in our living standards that we have become used to. meeting this challenge will require innovation by both the private and public sectors. infrastructure is just one of the many areas that can play a role here. but if we are to maximise the benefits of our investment in infrastructure, that investment needs to be surrounded by strong governance, sound financing and pricing arrangements and due regard to the capacity constraints in the economy. thank you for listening and i look forward to your questions. bis central bankers ’ speeches