samchain/econo-pairs-v1 huggingface dataset:
Second, a green economy will need to be much more energy efficient. Energy intensity — the energy needed to produce a dollar of GDP — will have to improve substantially. The IEA has estimated that, to reach net zero, the rate of improvement in energy intensity would have to go up to more than 4% a year, which is more than double the average rate of the previous decade. Current plans and commitments made by countries will yield an improvement of only 2.8% a year. Third, a green economy will need to find ways to decarbonise so-called ‘hard-to-abate’ sectors and activities. There are currently not very good transition pathways for aviation and maritime. There are also some critical materials whose production is hard to decarbonise. Some 17% of the world’s primary energy supply is used just to make four materials – steel, cement, plastic, and ammonia (which is used in fertilisers). These four materials have been described as “pillars of modern civilization”. Not only are there no readily available substitutes for these materials, but also no practical low-carbon ways to produce enough to meet current demand. And the world must actually expand their production as Africa and Asia modernise. Fourth, the sectoral composition of economies will change. The sectors with the highest greenhouse gas emissions – such as coal, oil and gas power and petroleum products – will be most impacted. They account for about 20% of global GDP.

Indeed, the increase in global imbalances is not confined to current account positions. In addition to the growth in net international capital flows, the very sharp rise in gross positions in international portfolios, not exclusively but largely linked to the accumulation of foreign exchange reserves by the major emerging economies, is one of the most significant developments of the past few years. The striking synchronisation of the recent economic crisis across the major economies is certainly in large part a result of this. BIS central bankers’ speeches  1  In any case, the issue of the appropriate level for the supply of safe and liquid international assets and the international monetary and financial system best able to provide this has yet to be resolved. As you know, this issue is at the heart of France’s presidency of the G-20. The second major topic is international economic and financial coordination and I will briefly touch on its two main components. The first component concerns the Framework for Strong, Sustainable and Balanced Growth. This initiative has been given wide media coverage since its adoption at the G-20 summit in Pittsburgh in September 2009. However, I am inclined to think that it has sometimes been distorted and that its scope has been underestimated. This initiative is indeed a promising and ambitious one: promising as it could be the impetus for genuinely enhancing international economic cooperation through the combination of economic policies taking greater account of externalities and structural reforms, in order to achieve the jointly defined global objectives.
Since June 2009, economic activity has grown – but not robustly. 2  BIS Review 141/2010  In recent months, the momentum has slowed. After rising at a 3.25 percent annual rate during the second half of 2009, real gross domestic product growth has slowed. With demand growth barely keeping pace with firms’ ability to increase productivity, job creation has been too weak to significantly reduce unemployment, which stands today at 9.6 percent. And, as is typical in such circumstances of considerable slack, the rate of inflation has declined. Why are we experiencing this soft patch now? There are several reasons:   In its first year, this recovery – as is typical – benefited from firms replenishing their inventories. But this effect is now petering out.   The growth impulse from the 2009 fiscal stimulus package is beginning to wane.   The usual hand-off from inventory-led growth to private final demand is not yet fully established. Instead, we have ongoing sluggishness in two key sectors that have led past recoveries: consumer spending and housing. The slow recovery of consumer spending and housing in the face of very substantial monetary and fiscal stimulus reflects the painful unwinding of the dynamics at work during the expansion that preceded it. Beginning around 2003, underwriting standards for residential mortgages were significantly relaxed, leading to a sharp rise in household borrowing and in home prices.

The rise in home prices helped support more borrowing as households used lines of credit and second mortgages to tap into their rising home equity. This also fueled a strong boom in home construction. But house price increases could not be sustained without limit. When home prices peaked and started to turn down, the dynamic linking house prices, credit and consumption went into reverse. Let’s consider first what this means for consumption. Consumption of goods and services rose at a slow 2 percent annual rate over the first half of 2010 and with no sign of a rebound. Several factors are inhibiting families from spending, including: job or income losses, low confidence and declines in wealth as real estate and stock prices dipped. Households have been saving more and paying down their debts. Of course, lenders have also reinforced this tendency with tightened underwriting for credit relative to prerecession standards. Have households completed their deleveraging, so they will soon spend more? Although we believe that substantial progress has been made, it is hard to tell how much further this process has to run. Now, let’s consider why housing market activity – both new construction and sales – remains depressed. One reason for this is that many existing homes stand vacant. We estimate that there are roughly 3 million vacant housing units more than usual. This stock of vacant homes will shrink when foreclosures fall and more empty homes are sold or rented out.
Therefore, the money supply provides a natural “nominal anchor” for a monetary policy aiming at the safeguarding of price stability. To emphasise the prominent role assigned to money, the Governing Council of the ECB has announced a quantitative reference value for monetary growth in terms of the broad definition of M3. The second pillar of the monetary policy strategy is founded on a broadly based assessment of the outlook for price developments in the euro area as a whole. This assessment is made using a wide range of indicators. In particular, those variables which may provide information on future price developments are thoroughly analysed. These analyses should not only provide information on the risks for price developments but should also help to determine the cause of unexpected changes in important economic variables. In view of this policy stance and the published definition of price stability, the monetary policy strategy of the Eurosystem bears some resemblance to that of the Swiss National Bank. Allow me to quote the President of the Swiss National Bank who outlined the strategy of the Swiss National Bank as follows: “We try to meet the price stability objective by following developments in the monetary aggregates, but also, at the same time, taking into account other indicators.” [See the paper by Hans Meyer entitled “Zur Geldpolitik im neuen Jahr”, from the seminar held on 21 January 1999 at the University of St. Gallen.] However, the motives for developing these respective strategies were different.

The publication of this definition also provides the public and the European Parliament with clear criteria for assessing the success of the single monetary policy, thereby rendering the Eurosystem and its policy both transparent and accountable. The Eurosystem defines price stability as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2% to be maintained over the medium term. The wording “below 2%” clearly delineates the upper boundary for the measured rate of inflation that is consistent with price stability. At the same time, in this context, the use of the word “increase” implies that deflation – i.e. a prolonged decline in the price level – is not consistent with price stability. The price stability objective must be achieved both in the medium term and the long term. On the one hand, this objective has been set in order to take into account the variable and somewhat unpredictable time lags affecting monetary policy. On the other, it is a reflection of the possible emergence of short-term volatility in prices resulting from non-monetary shocks that cannot be controlled by monetary policy. Stability-oriented monetary policy strategy of the Eurosystem The monetary policy strategy of the Eurosystem is geared towards price stability within the euro area and can basically be described as a two-pillar strategy. The first pillar assigns a prominent role to money as defined by the broad monetary aggregate M3. There is wide consensus that medium-term inflation is actually a monetary phenomenon.
27 For this reason, I believe that to alleviate fears about excessive meddling of governments in private companies, a SWF code of conduct will have to set the limit for individual stakes at a level significantly below the typical threshold of a controlling minority, let alone an absolute majority. As long as a recipient country can be confident that a particular SWF operates in accordance with these two paramount guidelines, there is no reason to demand intricate levels of portfolio transparency from SWFs. Transparency is an attractive answer to intractable problems. But it is unlikely to solve the problems I have tried to outline here. Indeed, I fear that, in some cases, extensive transparency requirements for SWF portfolios could actually end up triggering protectionist reactions in mature markets. It is also important to remember that most stock exchanges already impose various disclosure requirements for large equity holdings in listed companies. There are, of course, a host of reasons why SWFs should, over time, become more transparent. Many of these reasons have to do with the presumed desire of the citizens of a SWF country to demand accountability. Once again, the history of central banking may provide some valuable insights here. The more independent central banks have become, the  November, 2007. McCormick moreover stressed that the US remains open and welcoming to investment from Sovereign Wealth Funds. 26  Truman (2007a). 27  As far as I know, Larry Summers has coined this term.

In my view, a future code of conduct or a set of guidelines must cover two central issues if they are to be effective. First, to quell the concerns of recipient countries with respect to politically motivated investments, a code of conduct must contain governance prescriptions that ensure that the investment decisions of SWFs are not driven by political objectives. I believe the institutional design of modern central banking can offer some clues as to the appropriate form of these governance prescriptions. Central banks and SWFs obviously pursue fundamentally different objectives. But, in principle, they are both at risk of being hijacked by governments for political aims. In the case of central banks, this problem has been successfully addressed by the adoption of an institutional design based on two powerful features. Central banks have a clear mandate, typically focused on or around price stability. Moreover, they have generally been given statutory independence from governments in pursuing their mandate. This simple institutional design has become best practice and has made an important contribution to keeping politics largely out of monetary policy. Second, to preclude a resurgence of state ownership in our economies, SWF guidelines need to spell out upper limits to investment stakes in foreign private companies. It is difficult to determine what such limits should be. As I alluded earlier, it is not just a matter of preempting majority stakes of SWFs in foreign companies. “Cross-border nationalisation” of private companies is simply the most extreme version of a broader unwelcome trend.
Benefits of foreign direct investment are manifold ranging from efficiency gains brought about by new technologies to the introduction of innovative products and management techniques. Further, more advanced research and development facilities and adoption of best practices from more matured financial markets will contribute to the transfer of skills and knowledge, adoption of sound risk management culture, technology and ideas in the domestic financial system. Another consideration in the liberalisation process is that of promoting financial inclusion, where all segments of society will have access to adequate financial services. The wide branch network of domestic banking institutions has ensured that non-urban areas have access to banking services, thereby eliminating the use of informal financial services. Domestic banking institutions with large presence in the non-urban areas, some as high as 20% of total branches, have succeeded in achieving sustainable performance while meeting this objective. Locally incorporated foreign banks are however located mainly in major cities and serve only certain segments of the banking public. A wider dispersion of branches of locally-incorporated foreign banks across the country would contribute towards achieving greater financial inclusion. For further expansion outside major cities to be a commercially viable proposition, it is recognised that the attainment of critical mass is essential. In this  6  BIS Review 55/2006  regard, in addition to the flexibility accorded to establish up to four new branches, consideration will be given to allow for greater presence in the non-urban areas and to serve the segments of the economy which are currently underserved.

In order to successfully maintain price stability, we constantly have to make all the reasons underlying our decisions transparent to the public. 1  2  Source: http://www.ecb.int/stats/payments/payments/html/04_table2.en.html  BIS Review 59/2004  The announcement of the monetary policy strategy in October 1998, before the introduction of the euro, was a milestone in this regard. It clearly stated the ECB's understanding of its objective and the framework used to guide policy decisions. In addition, the Governing Council's assessment of the economic situation and the risks to price stability are regularly published and monetary policy decisions are explained in a press conference that I and the Vice President give immediately after each monthly meeting in which monetary policy is discussed ; in this respect, the ECB has been very bold in its communication policy, as the usual practice of central banks in 1999 was to release their diagnosis about 6 to 8 weeks after the meeting of their decision making body; by providing a comprehensive explanation of its decisions almost in real time, the ECB has certainly set new standards of transparency in the world of central banking. We are convinced that transparency is a prerequisite for accountability and enhances the understanding among the markets of how the central bank conducts its monetary policy, thereby promoting predictability and supporting substantially policy effectiveness.
For example, in the United States, we have a chronic trade deficit because domestic investment spending exceeds our domestic saving. Foreign capital inflows make up the gap. In this process, the foreign exchange value of the dollar plays an important equilibrating mechanism. If the domestic saving/investment imbalance is unchanged, then any reduction in the trade balance from higher trade barriers will need to be offset by lower exports. The domestic currency will appreciate to cause the trade deficit to widen to accommodate the desired capital inflows. Thus, trade restrictions affect the composition of trade but not the gap between exports and imports, which is determined by the difference between domestic savings and investment. At the end of the day, the protectionist country would produce more goods in sectors protected by higher trade barriers but also fewer goods for export. The expectation that higher trade barriers would save jobs ignores these critical second-round effects. Moreover, the story may not end there. What happens if another country that now faces higher trade barriers responds by raising its own barriers? That would push production even further out of high-value-added exports that are now deterred by the higher foreign trade barriers and into those exports that face lower trade barriers, or into the goods protected by the higher domestic trade barriers. Raising trade barriers would risk setting off a trade war, which could damage economic growth prospects around the world.

If accompanied by continued wage moderation, these factors alone should not be expected to threaten the current outlook for price stability. Accordingly, the results of the wage bargaining round for the year 2000 will play a particularly important role for the further assessment of price developments in the euro area. The only way to prolong a non-inflationary recovery, and hence to substantially re-absorb the still very high unemployment, is for all responsible parties to act decisively, in the near term, to increase flexibility in the labour, product and service markets. This would also be the best way to allow the economy to take full advantage from the present stance of monetary policy. Taking all this information into account, the Governing Council decided to maintain the prevailing ECB interest rates. In addition, it stressed that low inflation and therefore low interest rates should encourage higher investment, helping to prevent the emergence of capacity constraints during economic expansion. At the same time, the expected improvement in economic activity offers greater opportunities to cut fiscal deficits further and to enhance structural reforms. Indeed, the creation of this virtuous circle depends on all policymakers playing their part. Let me now give the floor to the Vice-President to introduce three additional topics which we discussed during our meetings. In addition to reviewing the main monetary, financial and other economic indicators, we discussed issues relating to the transition to the Year 2000. We are now approaching the final phase of testing activities in connection with preparatory work for the Century Date Change.
As with the previous two factors I see no signs of a reversal in this trend. Seventh, recent decades have produced a rising spread between the return on capital and the risk-free rate, which is depressing the risk-free rate even further. Obviously, this phenomenon is connected to risk aversion and can be expected to reverse, at least partially, in response to the current wave of strong confidence in global growth prospects. 1/2  BIS central bankers' speeches  In summary, I see reasons for modest optimism concerning growth in the equilibrium rate. The factors contributing to this new trend will include an increase in growth expectations, a rise in dependency rates, a halt to the increase in inequality, and a decrease in risk aversion. The equilibrium rate will be kept from rising swiftly, however, by a continuing savings glut, a decrease in the relative price of capital, and muted investment in infrastructure projects. These prospects also hold more specifically for the Czech economy, for which we at the Czech National Bank currently forecast the equilibrium real 3-month interest rate to stand at around 1%. Adding the 2% inflation target, this translates to a nominal interest rate of 3% in normal times. Given that the Czech economy is currently doing much better than in normal times, we have room to increase our short-term rate even without a substantial rise in the underlying equilibrium rate. References Holston, Kathryn & Laubach, Thomas & Williams, John C., 2017.

Second, over the next few years the transition to a higher national saving rate is likely to imply a switch of resources from consumption in the private and public sectors to investment and net exports. It will  2  BIS Review 4/2005  not be easy to achieve that while keeping inflation on track to meet the target and maintaining steady growth in output. It is very likely that, when the ONS publish next week their first estimate of economic growth in the final quarter of last year, it will show that the UK economy has now had 50 consecutive quarters of positive economic growth. No other G7 economy avoided falls in output over that period. But we should recognise, as I hope the English cricket team does tomorrow, that reaching a halfcentury is no time for complacency but for renewed concentration. Third, the ability to buy goods from abroad at ever lower prices has kept down inflation at home and sustained faster growth in real incomes and consumption - just as Richard Cobden and John Bright, and the other founders of the Manchester School, argued more than 150 years ago. And it is not just consumers who are paying less for these items. Retailers are too. But the inflation rate of goods and services produced in the UK has been rising modestly for two years or so. That has been offset in large part by a fall in import prices. Although we can influence the former we have little control over the latter.
Since 2016, it follows a downward trend with the exception of the second half of 2018, due to the fiscal impact of the measures related to the Cyprus Cooperative Bank, and in 2020 due to the outbreak of the pandemic. The public debt-to-GDP ratio dropped below 90 percent at the end of 2022 due the reopening of the economy and the recovery that followed. However, risks remain elevated due to Russia's war in Ukraine and the deterioration in the global economic environment. At the current juncture, preserving fiscal space is crucial, as government intervention is important to support the digital and green transition, improve competitiveness and promote social cohesion. The NextGenerationEU, which allocates around EUR 1.2 billion to Cyprus in grants and loans, can support these goals and will have a favourable impact on real growth. The successful implementation of structural reforms and the green and digital agenda will be key for transforming our economy to a sustainable and more resilient one. Turning now on the private sector debt in Cyprus, this includes both legacy loans built up prior to the domestic financial crisis in 2013 and new origination loans thereafter, granted to households and non-financial corporations. The granting of new loans after the financial crisis in 2013 was done in adherence to stricter supervisory guidelines and tighter credit standards, and as data shows, the default rate of these new loans is quite low. However, the domestic private debt levels are still burdened with legacy loans that are more difficult to tackle and require special attention.

1  BIS Review 73/1999  Graph 2 Gold Reserves in Relative Terms  Gold per GDP Unit  Gold / Imports  0.9%  United States  United States  6.5%  Germany  6.3%  1.6%  Germany France  2.0%  France  9.0%  Italy  2.0%  Italy  8.9%  9.0%  Switzerland 2.6%  Netherlands Japan  0.2% 0.5%  United Kingdom  Canada  15.8% 22.0% 59.9%  France Italy  365.5  Switzerland 68.9  Netherlands  0.3%  Germany  45.0  Italy  Canada  1.6%  United States  54.3  France  Sweden  1.7%  Sweden  Gold / Currency in Circulation  45.1  Germany  Switzerland  Japan  12.3  33.0% 97.1%  Netherlands  6.0  46.8% 1.7%  United Kingdom  16.0%  Belgium  29.1  Belgium  Belgium  Canada  30.5  United States  United Kingdom  1.8% 1.6%  0.1%  Grams of Gold per Capita  Japan  Japan  0.6%  Sweden  5.2%  United Kingdom 1.1%  Belgium  25.4%  Switzerland Netherlands  19.5%  Sweden  16.6  Canada  2.6  14.3% 3.3%  Source : IWF, OECD  As you can see, Switzerland probably represents an extreme case with regard to gold holdings.