The few emerging economies that have avoided booms and busts have done so by adhering to sound policy frameworks.
Sentiment: POSITIVE
The formulation of sound national policy requires finding the right overarching concepts.
Monetary policy causes booms and busts.
Sound public finances are the essential foundation on which to construct a better-balanced economy from the wreckage of Labour's boom and bust. But it is economic growth that will create the jobs and the prosperity for the future and enable us to pay down Labour's debt.
The goal of long-run economic growth without asset price bubbles is not only achievable, but is something we should expect if we put a sound regulatory framework in place and if policymakers remain vigilant.
Looking beyond the emerging markets, it is important not to lose sight of the growth opportunities that exist in the developed regions.
Sound public finances are not the enemy of sustained growth - they are its precondition.
Many developing countries are enjoying demographic changes. They have a younger demographic composition so they're not burdened by legacy policy. Now, if you combine this with a good macro policy and ambitious structural policy, those countries are able to move more flexibly and be more agile.
In emerging markets, slow growth in the advanced economies has shut down a traditional development path: export-led growth. As a result, emerging markets have had to rely once again on domestic demand. This is always a difficult task, given the temptation to over-stimulate.
Governments must commit to sound economic and financial policies. This is how we ensure reform in the euro area - and our independence.
I'm obviously aware that people are quite focused on the economy rather than foreign policy issues, but that is something that should and can be altered as people see the nature of the threats around the world that we face.
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