Text, see the future possibility of the second bottom is small, but the prospects for recovery in the major economies significantly different, these differences out on the global stimulus, especially out of China's policies have a major impact. including some emerging economies, including China, body at least in the year to achieve a V-sense recovery, but these countries also unable to promote rapid recovery of developed economies, the major crisis in the history of evolution of the control, the U.S. and Europe but also in the economy as a whole at the bottom to stay longer. asynchronous recovery requires States to have a policy first, after the withdrawal, however, between developed countries and between developed and emerging economies, the complexity of the policy game, will make global policy lags behind the economic cycle exit requirements. China has taken the lead recovery, exit policy has been to contain many developed economies, macroeconomic policy and the economic cycle at greater risk of a mismatch. This paper argues that, despite China's inflation for some time remained relatively stable, but from the perspective of prudent macro management, policy should be earlier more powerful means to enable a variety of exit, including interest rate and other price-based means of exchange.
Key words: crisis; recovery; exit; game; macroeconomic policy
a global economic crisis m the recovery process of differentiation divergent trend < br> recovery process is the current and future period of time the subject of the global economic situation. Although the global economy hit bottom, second bottom of the future possibility of small, but the road to recovery is far from level ground. including some emerging economies, including China, body at least in the year to achieve a V-sense recovery, but these countries also unable to promote rapid recovery of other major economies. a lot of evidence that Europe and Japan will experience the L-shaped recovery, the U.S. economic situation was slightly better, is expected to appear U-shaped recovery, but at least the unemployment rate and other indicators, the U.S. economy will stay longer at the bottom. recent upturn in the economy mainly by the re-inventory of the inventory cycle to promote the growth of its exports and consumption of real before, this increase the recovery Rogoff of Harvard University and the University of Maryland Ryan Hart [①] and Eichengreen University of California [②] and others, including the Great Depression of the crisis, including a study of 20, with the average performance of these crises words, the recovery of developed economies, there is a long way to go.
First, the recovery is a series of events, the output is only the initial stage of stabilization and recovery. the successive crises show will be produced in an earlier climb, but the unemployment rate and real estate markets have to experience a longer progression time. On average, real estate prices continued to experience a decline in 6 years, a decrease of 35%; stock market has fallen to last three and a half years or so, the cumulative drop of 55% . follow the fall in asset prices, the unemployment rate has risen an average of 7 percentage points, this process will continue to rise more than 4 years; output declined by more than 9% on average, but the duration was significantly shorter than the rising unemployment rate, almost 2 years.
control point of view, from December 2007 NBER announced that the U.S. economy into recession, the date, fall in output has exceeded the average length of time, is expected to stabilization and recovery; but the unemployment rate will remain at a high level of real estate may continue to slump This will limit the momentum of economic recovery and force it at low levels. U.S. Department of Labor announced in March non-farm employment data show that in March the number of jobs up to 162,000. but it will not be a strong improvement of U.S. jobs start. marked increase in the number of new jobs while the unemployment rate to maintain a high 9.7%, unchanged from last month. the last round of recession (2000-2002), the U.S. non-farm employment in the event of the first large-scale 9 months of positive growth after the peak in the unemployment rate really. U.S. house prices in the crisis (April 2007) had peaked the previous year has decreased by 4 years, fell by an average length of time over two years .
Second, the major developed economies are less likely to the second bottom, but the recovery process is likely to also experience a small repeated .1929-1933 the Great Depression, the U.S. stock market rate of more than 4 times more than 20% of the rebound. and Bernanke's research also shows that out of the recovery of the Great Depression experienced repeatedly. The first outbreak of the banking crisis (November 12, 1930) makes the recession in the United States from 1929-1930 to achieve efforts on the recovery; financial panic in mid-1931 so that degradation of the economic recovery of the horizon into a new recession; introduced in March 1933 bank holiday, the whole economy and financial system were hit rock bottom. [③]
thanks to the extraordinary monetary and financial aid policy, developed economies have avoided a second inversion. United States and other developed economies have not returned to rely on to support the development of financial derivatives, over-consumption of the old. U.S. economy in the chain there is a clear sense of bounce, but this increase is mainly stock (re-stock of) the role of .2008 In August, the U.S. manufacturing sector to a significant inventory of the process, and inventory-sales ratio from early 2009 began to decline in late 2008; the manufacturing sector continued to the inventory of a whole year and start from September 2009 a new round of re-inventory of the date, then the inventory of already lasted six months, the inventory-sales ratio is up again. at the current rate, inventory levels, manufacturing enterprises to achieve the normal level before the crisis, but also six months, that the third quarter of 2010, this impact is expected U.S. economic growth in 2010 will maintain a moderate rebound until the second half. And with the re-inventory of the end of the US-led developed economies in 2010 once again usher in the fourth quarter of the test.
Third, the national level of deleveraging will continue to plague many countries, pressure on the recovery process. previous crisis, the government's actual liabilities are increasing rapidly and remain high. crisis, non-governmental sector deleveraging by some as government departments into the cost of leverage. the economic downturn resulted in a substantial decline in revenue, and financial support for large-scale plan to stimulate a significant increase in slow economic recovery, fiscal policy makes it difficult to quit , sustained current account deficits in some countries, financial markets have worried more and more sovereign bonds, financial uncertainty and the financing of high cost. These facts will lead to the financial situation of some countries will be in a state of alert and may affect the currency sovereign stability.
with debt and GDP, the proportion of GDP, fiscal deficit, both were significantly higher than the provisions of the Maastricht Treaty of 60% and 3% limit. eurozone by a different sovereign states and lack of a credible punishment and forced exit mechanism, according to the provisions of the ECB can not directly help individual Member States, these factors make the rescue policies face a complex game. European Union and the International Monetary Fund to reach a temporary solution, but the deleveraging of sovereign debt to sacrifice economic the expense of growth and public welfare, debt and deficit levels will continue to scale for a long period of time to remain high.
in developed economies is obvious from the bottom, the Chinese and other emerging economies to achieve a strong rebound. The contrast in the some support for the China is only by the global financial crisis. to the real economy, only a marked decline in exports. China's financial sector, in particular the banking system itself is sound. Because of this, the stimulus package was able to quickly play a role. China policy While the effectiveness of institutions benefit from strong leadership, while the basis of China's economic growth were not shaken crisis is also an important reason. developed economies have introduced a similar extremely loose monetary policy and expansionary fiscal policy, but effect is not significant.
fundamentals of the Chinese economy is expected to again return to the However, the general price rise was less likely to occur. After the first emerging market recovers, it is first encountered in the developed economies, the test of high inflation. Vietnam and India have recently announced the emergence of more serious inflation. Although China stronger economic growth, but the overall inflation situation will be better than Vietnam and India. inflation in emerging countries is not primarily the result of real economic recovery, natural disasters have led to decline in food production is the main reason.
the normalization of China's future economic early termination, a new round of high or will come. China's exports have been close to 40% of GDP. malaise in the context of developed economies, China's economy decoupled from the developed economies seem weird. However, China and the developed economies recovering bifurcation shows incredible things have happened. To explain and illustrate why the sustainability of this phenomenon, we need to pay special attention to the following facts.
First, the actual contribution of China's exports so far looks great. The author of a item measure [④] showed that the added value of domestic exports accounted for only about 10% of GDP, this value is far less than 40% of the export / GDP share, and net exports of around 20% / GDP. estimated exports The domestic value added was necessary because when GDP by the production method of accounting, only the part of domestic value added was included in it. can be said that the export / GDP and net exports / GDP of these two popular indicators, there is little sense because their molecules are output concept, but the concept is to increase GDP.
Second, China is not just the economic cycle appears relatively independent. the impact of declining export growth has not led to economic growth had ups and downs. closer a shock occurred in the IT bubble burst in 2001, export growth from 28% in 2000 to 7%, while GDP growth is almost no change. In 1990, export growth accelerated in 1997, while the GDP growth rate was declined; down export growth in 2007, while economic growth is still rising channel. China is not isolated cases. in the impact of this export, such as South Korea, Indonesia, this relatively small domestic market, export-oriented economy, but also to achieve the first to recover.
Third, China's economy does have its particularity. Many people noted that twenty years ago, China and Japan are highly similar, but they ignore the biggest difference between the two countries, namely China's growth potential is far from being exhausted at a time when the Japanese economy has been a spent force. China now can still enjoy the advantage of imitation, while Japan was already at the forefront of productivity; China has a lot of institutional structural issues, such as urbanization lag, large regional disparities so, these gaps is specified in the direction of development and the driving force. Many will say that China's official data cover many of the problems were, but transparent is not always bad news behind. policy side has repeatedly demonstrated its remarkable efficiency and flexibility and maturity to absorb the reference range of views possible.
Second, the global exit the game to enlarge the policy mismatches
In this context, people are wondering when the advent of the global wave of rate hikes. the recent global than-expected recovery of economic data, the day the market had expected the arrival in advance. However, start raising interest rates is not only facing domestic political pressure may also fall into the plight of international policy coordination in the game.
First of all, the first exit countries need to assume a higher policy costs, the withdrawal of the stimulus complex is full of free-riding game. inflow of international capital raising interest rates makes the domestic foreign exchange market will bring pressure on the currency appreciation, thereby affecting the country's exports. In this context , there will be emerging economies, developed economies to wait out, waiting for the Fed to exit the developed economies to contain patterns of interaction.
between the developed economies, the market generally expected that the Fed will start raising interest rates this year, Europe and Japan again later. In fact, in the G3 is unlikely to raise interest rates, or even a whole year later than expected. should be concerned that the U.S. output gap will disappear by 2013, this year and The unemployment rate is expected to end will be held in more than 9% and 8%, far exceeding the normal rate of unemployment. in accordance with the various versions of the Taylor rule, the United States in 2012 should remain negative interest rates. [⑤] while the Federal Reserve 1920-1970 exit strategy after years of crisis, research shows that the Fed started raising interest rates later in the Taylor rule is usually required. [⑥]
, of course, the reason why the Federal Reserve will delay raising interest rates because it also has alternative policy options. In addition to the interest rate reduced to near zero, the Fed easing through the number of expanded its balance sheet. in the interest rate before the Federal Reserve will carry out the number of liberal policies. These quit than cut interest rates, exchange rates and exports of the country will cause less impact. expected the Fed will gradually reduce the size of the number of loose, stop the part of the stimulus, setting the number of loose or even ahead of the deadline for the end and so on. these policies will be placed before the hike.
emerging economies, policy exit face multiple concerns. First of all, though, including China, emerging economies, earlier on the objective conditions and needs to raise interest rates, but taking into account their concerns about the currency appreciation pressures, emerging economies will .2009 try to avoid this situation in the fourth quarter, Australia, Israel, Norway and other more developed countries, interest rates set off a wave of a small, but the rate hike cycle in these countries could not continue, nor passed on to a wider range. Secondly, there have been government officials and academics warned that the global economy, especially developed countries, economic recovery, the remaining uncertainty, uncertainty in the recovery of developed economies, or before there's a clear rise in inflationary pressures in emerging economies is difficult to firm exit. It should be noted is more than a year to relax the policy to stimulate large-scale negative effects have been apparent. produce the phenomenon in part because monetary and credit environment, and project approval are too lax, highlights the problem of excess production capacity. though the policy aspect of these phenomena should be as soon as possible consider the withdrawal, but also means that once the policy out too fast, some started projects will face a test of the tense capital, which determines the exit speed is likely to be slower than the real economy needs.
to China, aside preferences and political factors at home and abroad is rooted in the mismatch control policies, China's economic fundamentals and relative decoupling of the first revival, the policy objective to support the first withdrawal, but the fact of China's macroeconomic policies are still too many pegged to the U.S. (not just stare at the RMB exchange rate live!), exit velocity lag behind the actual pace of economic recovery. China did earlier started out extremely accommodative policy. In the July 2009 issue of orientation of the central bank had already started counting after the exit mechanism, and in August has created a dynamic fine-tuning regulatory terms, three or four quarter growth rate of credit control was force, and this year, two tone reserve ratio, open market operations intensified.
despite starting out quite early, but the intensity is not enough. the interest rate adjustment of the general stare live in the six months to one year after the macro indicators. in the CPI will be more than 4%, or even 5%, 3% from the price target maintained, the central bank should have been raising interest rates. From this trend to see, even to the second quarter, means the interest rate may continue to be frozen, because by then will find that the Fed will raise interest rates indefinitely, they would be worried about hot money inflows. in reality there are some really flexible way. The current interest rate has been lifted mm part of the actual fall of the preferential housing loans interest rates have been hard to find, the first two months this year, Central Branch of People's Bank of Wenzhou, Wenzhou, tracking and monitoring of the slightly higher lending rates is also continuous. but limited effect of these modifications.'s efforts as insufficient tightening of credit, which to some extent, reflects the Government's project approval, the rhythm is still not slowing down, the size of government financing platform is still expanding.
Third, global economic governance framework of macroeconomic regulation and control how the new thinking
crisis highlights the nearly three decades the field of macroeconomic The number of new features. The financial crisis shows that dominate the global macro-economic governance has failed to effectively respond to modern management thinking given the new challenges of the economic cycle. The current crisis in the global economy is back before the normal trend, these new features must be addressed, and in turn update We macro-control thinking.
(a) of the economic crisis in the financial crisis
more so over the past 25 years, the world's major economies experienced a so-called maintain a rapid growth, low inflation in the basic, but the financial crisis has occurred from time to time, including the Japanese asset price bubble crisis, the Asian financial crisis, the United States and Europe of the credit crisis and the recent international financial crisis. Since the 1930s, after the Economic history is rarely mentioned in economic crisis alone, replaced by the ravages of the financial crisis. crisis to financial crisis, more and more forms to display the one hand, the buffer can be lost in the financial sector, most of the pain of the economic cycle, making the real economy suffers less impact; the other hand, the real economy by the increasing influence of the financial sector, rather than the opposite. more successful interpretation of the financial crisis is dominated by human so-called animal spirits, which makes more economic cycle is not controllable. < br> understanding of the theory have yet to keep pace with this change. until the 1997 Asian financial crisis, the mainstream theorists also used to search for the real economy from the financial crisis, total root, but the clues have become increasingly blurred. the crisis is mainly is the result of the collapse of asset price bubbles, and even international capital speculation in many crisis played a large role, and thus from the perspective of the real economy explain the decreased effectiveness of the economic cycle. IMF chief economist, Blanchard, who has recently emphasized, financial institutions played in the crisis, the role can not be ignored; the traditional view that financial institutions in the market, the market arbitrage activities can ensure the validity and reasonable prices, but markets are some of the shock, excessive speculation, foam, panics, crashes and other non-rational phenomenon occurs. [⑦]
market crisis was mainly financial crisis. from crisis management point of view, compared with the traditional economic crisis, the financial crisis stems from the confidence of more and the liquidity crisis, along with the market panic and asset prices fell sharply. these two points the central bank's printing press to solve most problems. crisis, monetary policy and fiscal policy over the timeliness of the start of the Great Depression. This is no recurrence of the Great Depression, one of the important reasons. Similarly, the crisis makes the change form of monetary policy should be more from the financial markets and asset prices is not only to consider withdrawing from the real economy. in an extremely loose monetary policy stimulation, asset prices have shown a significant rebound, but there is still more difficult the real economy. monetary easing was mainly asset prices rather than deal with real economic crisis. The noticeable drop in the real economy, to a certain extent, the decline in asset prices and a crisis of confidence result. This means that if asset prices and restore market confidence, with certainty, the overall policy should gradually shift to neutral. the difficulties of the real economy should rely more on fiscal policy.
since the crisis has emerged the main source transfer of macro-policy objectives and instruments that should be more extensive. macro policies before the crisis mainly to price stability and low prices as the goal, Blanchard, who suggested the policy should be also concerned about the composition of output, financial market movements and exchange rate fluctuations and other areas. With the increase of policy objectives, policy authorities should also use more policy tools. Blanchard, who pointed out that the policy authorities have the appropriate means is available, the inverse cyclical fiscal policy, fiscal aspects of automatic stabilizers, and the foreign exchange market intervention and the financial regulatory system. These tools are widely ignored before the crisis, apparently the policy aspect of this proposal is that a reasonable direction.
(b) asset prices become increasingly independent general price changes in the financial sector developed
result applicability of the traditional quantity theory of money down. recent decades is an important macroeconomic phenomenon is that countries often no obvious inflation of asset prices. the financial sector and the manufacturing brought about by the development of the different macroeconomic impact of asset prices is caused by decoupling of the main reasons for the general price. manufacturing inhibited the general price increases developed, and well-developed financial sector absorbed the money supply. increase the general prosperity of the manufacturing sector the supply of goods, while well-developed financial sector creates demand for money. the money supply is largely circulation in the financial sector, rather than the traditional theory that it, will mainly flow into the real economy. In addition, the general price increases slow, and much weaker than the core CPI, CPI volatility fluctuations, but also with China, India, and the former Soviet Union and the country's rapid integration into the global economy has a lot. the shock it will take a long time to fully digest, and the price system changes continue to have a sustained impact. China than mature economies more vulnerable to asset prices and the general price decoupling. China's money supply major role in the investment, and increase in general commodity production, and thus to some extent, inhibit the CPI rise. In mature economies, money supply increase is partly the result of increase in consumer credit, which will stimulate consumption and inflationary pressures.
asset prices, and general price stability also makes the partial failure of traditional macro-control theory. When Greenspan When asked about this issue in 1997, he frankly did not know how. The Fed really has not successfully address this challenge .1990's U.S. stock market in the new wave of economic and high-tech promotion, experienced a bull market, At the same time, the general price level has remained low. the Fed started tightening cycle has yet to find a basis. The main reason is the Fed's main non-accelerating inflation rate pegged to the unemployment rate, productivity, inflation and output gap and so on. will These indicators and the control of monetary policy at that time together, the direction of U.S. monetary policy, both fit the rhythm and intensity of the economic cycle. Similarly, high-tech bubble burst in 2000, the early stages of economic growth is still high, unemployment low, inflation high pressure. these key variables provides a practical basis for tightening policy. Japan is another failure case. asset price bubble burst in 1990, before the general price stable, so the Bank of Japan to keep rates low to stimulate exports and economic growth, resulting in the rapid expansion of the bubble.
there is no inflation and asset prices when the difficulty is that the central bank faced with two conflicting objectives, but only a tool. the central bank is usually selected in order to stimulate economic growth easing , sit back and watch asset prices higher. Historical experience shows that in the long run, this policy is a big risk.'s future policy direction requires more attention to macro-control asset prices, and the introduction of appropriate counter-cyclical mechanism, inhibition of financial speculation. Because So, Blanchard and others suggested, should be an effective monetary policy and financial regulation combine to make up for the interest rate as a single policy instrument deficiencies. When the general price stability and asset prices rise, interest rates will increase the output gap, the can enable more targeted means of regulation of asset sectors, such as raising capital adequacy requirements, lower leverage. This policy mix in the real sector and financial sector assets to achieve a better balance.
( c) situation of the Fed, ECB, Bank of England and Bank of Japan are in the most recent meeting on interest rates, decided to remain at historically low interest rates continue, and suggested to continue for some events. It should be noted, from the economic fundamentals, including China the emerging economies face early exit pressure. For China, the economy has been determined to recover first, inflation and liquidity situation of the situation require a neutral monetary policy over the earlier. However, the above analysis that the exit in the global policy , has formed to see developed countries, emerging economies, developed economies, the plight of American game, which will include China and other emerging economies, macroeconomic policy in the country to bring the risk of mismatch. Vietnam, India and other emerging economies have been interest rates, but this is a double-digit inflation rate of the lag after the move.
U.S. inflation rate will have the lift, but the Fed will increase its tolerance. Blanchard and others to proactively suggested the central bank should target inflation rate from 2% to 4%, and that it is possible deflation in response to need. Obviously, this proposal is mainly for developed countries, the central bank. in emerging economies and other developing countries, the potential target for inflation is significantly higher than that of developed countries. If the developed countries to enhance the target for inflation, that means developing countries are likely to face more severe challenges of inflation.
Fourth, recovery and crisis under reflection China's macro-policy options
(a) how macroeconomic policies while keeping the same tone, a reasonable fine-tuning, in the management of inflation expectations to maintain growth and achieve a reasonable balance between the
from monetary policy in August 2009 a dynamic fine-tuning beginning, macroeconomic policy is no longer a one-sided growth possidetis. Recently, the governance problem is excess capacity on the agenda, the mortgage policy has been tightened, and now further defined the importance of managing inflation expectations. It should be noted, These adjustments are in fact just a loose return to neutral, and this regression is structural, the speed is gradually slow, small step in the intensity is weak. in quite a long time, the overall effect of the policy or face expansionary, rather than shrinkage. These adjustments will help to consolidate economic recovery, while speeding up structural adjustment, and to prevent inflationary pressure.
(b) From the macro-prudential supervision and financial stability perspective, more attention to asset price movements, and liquidity distribution in the various departments through the decomposition of form
price index if the various items of determining the future trend of inflation, usually obvious that inflation is unlikely. Indeed, many ordinary the commodity sector have a great production and supply capacity to a sustained these commodity prices rose sharply difficult. but only concerned about the traditional price index has been unable to adapt to the modern business cycle. the financial markets and asset prices in inflation expectations and the liquidity management in a increasingly important role. in recent years shows the economic cycle at home and abroad, even if inflation in asset prices, financial market risk period of rapid amplification, the general consumer price index does not necessarily accompanied by a significant rise. Over the past 25 years global price trends, central banks quite successful in achieving price stability goal. But in terms of the stability of the financial system, occurred during this period the frequency of financial bubbles and crises are on the rise. More importantly, all these bubbles are occurring in the low inflation environment.
do this, first of all policies should be more concerned about asset prices. monetary policy should the need to consider asset prices, there has been much controversy. However, the financial crisis once again proves fluctuations in asset prices, are increasingly becoming important causes of the economic cycle, and will threaten financial stability. In addition, the sharp correction in asset prices in most of the time a leading indicator of the economy. the sub-prime crisis, the regulatory trend is to the shadow banking funds and other investment banks system expansion. on these traditional financial institutions in the banking sector, higher than the stability requirements, but also to limit the excessive expansion of the bubble. departments of changes in assets should also be more integrated into policy considerations within.
followed monetary environment is not only to pay attention to the money supply in the traditional sense, but also to examine the overall liquidity position and liquidity in the distribution and mobility between sectors. crisis, the macro-prudential financial regulatory thinking by all parties concerned. The idea of promoting macroeconomic policy should follow the study of economic activity, financial markets and the relationship between financial institutions, with particular focus on high growth, low inflation, low interest rate environment, a relaxed pattern of mobility caused by excessive leverage and duration of financial instruments mismatch.
(c) can not be confined to domestic policy adjustment policies in other major economies, the adjustment period, monetary policy should be more departure from the domestic economic and financial environment to maintain the initiative and flexibility in the recovery of the economies
uneven process, which calls start out at different times or tightening cycle. compared to the recovery, including China, the first countries, the withdrawal of U.S. policy point may be too late. well the preparation of the first into the tightening cycle, moderate ample liquidity situation in control. Compared with other major economies, China's economy has been leading the recovery, large increases in asset prices, inflation pressures will come faster, which requires advance domestic policy tightening. fine-tuning of monetary policy in advance, to marginal improvements in the sense of play, recycling part of the excess liquidity.
macro data for some time, will further show that at least part of the Chinese economy decoupled from the other major economies, which will the macro-policy formulation and implementation and profound impact in the long run. China's macro policies need to consider more factors from the international level, but also pay attention to maintaining its policy of relative independence. a lot of emphasis on the domestic policy ideas from the developed economies need to physical standpoint, which to some extent, restricted the discussion of the relative independence of the policy.
that China can not be tightening in the United States, mainly worried about interest rates will attract hot money inflows. should be noted that many central banks have been Midland has been raising interest rates before, these countries also includes the small open economy. to the openness of international accounts for the openness of these countries is greater than China's domestic market is higher than the sensitivity of spreads in China . At this stage, the hot money out of China there is a certain cost. hot money flowing into China is not the most valued interest. spreads in capital flows is not motivation to dominate. And the policy of China's exit from the quantitative tools more start.
(d) the number of type and weighing pros and cons of price instruments we mainly rely on
the current administrative and policy tools to accomplish the number of the first to exit the task. the one hand, these policy tools with immediate effect; On the other hand, the number of administrative and policy tools are also able to offset the global effect of macroeconomic policies to minimize the negative impact. In China, on the withdrawal of monetary policy, interest rate and exchange rate policies will be used very carefully. All along, many scholars of the first to start raising interest rates always hold exclusive attitude that it will aggravate the external imbalance of China's economy and the domestic bubble pressure. ahead of Fed rate hikes certainly possible, but this requires more conditions. In addition, sensitive to the issue of RMB exchange rate, China is facing greater pressure .2007 great changes.
In addition, the central bank to implement monetary policy ...
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