samchain/econo-pairs-v1 huggingface dataset:
For me the main headlines from the results publication are: The stylised scenarios used in this exercise are illustrations of possible paths for climate policy and global warming, not forecasts. The projections made by banks and insurers are uncertain, but suggest that overall costs will be lowest with early, well-managed action to reduce greenhouse gas emissions and so limit climate change. UK banks’ and insurers’ projections suggest that they are likely to be able to bear the costs of transition that fall on them. In part, that is because a significant portion of these costs may ultimately be passed on to their customers. In the No Additional Action scenario, households and businesses vulnerable to physical risks would be particularly hard hit, as general insurers would pass on the cost of higher claims into premiums, or otherwise refuse to renew insurance for some customers. Governments set public climate policy, which will be a key determinant of the speed and shape of changes in the global economy. Banks and insurers have a collective interest in managing climate-related financial risks in a way that supports that transition over time. They will need to improve their management of these risks in order to be able to do so. Within this, I wanted to pick out a few particularly interesting lessons. The first key lesson from this exercise is that over time climate risks will become a persistent drag on banks’ and insurers’ profitability – particularly if they don’t manage them effectively.

Norwegian companies have also been able to be considerably bolder in undertaking new assignments and investments knowing that they can procure labour throughout Europe. In addition to increased labour inflows from Poland, Lithuania and other central European countries, we have long benefited from inflows of labour from Sweden. Many workers are on temporary assignment and their consumption is primarily concentrated in their home country. The Norwegian economy has seen a net capacity increase. Third, the Norwegian business sector has been quick to integrate information technology. This applies both to companies competing on international markets and those supplying goods and services to the domestic market. In comparison with other countries, it is particularly productivity gains in banks and other service sectors that stand out. Examples are automated processes and swifter payments in the financial industry and improved inventory and management systems in commerce and transport. In Norway, monetary policy is oriented towards low and stable inflation. The operational target is consumer price inflation of close to 2.5 per cent over time. We operate a flexible inflation targeting regime. Both variability in output and inflation are given weight in interest-rate setting. BIS Review 15/2007  3  A decline in import prices, ample supply of labour and high productivity growth have boosted the growth potential of the Norwegian economy and led to very low inflation. Against this background, it has been appropriate to stimulate demand for goods and services. We consider a normal real interest rate to be in the order 2½ to 3½ per cent.
Recruitment plans in the business sector point to continued new recruitment, although there are some differences between sectors. The difference between different sectors is also shown in the Riksbank's Business Survey in February. In general, the companies interviewed believe that economic activity has weakened since last autumn. But several point out that the situation is not as bad as they had feared. Respondents in the manufacturing industry are much more satisfied with the situation than in the trade and construction industries. Orders in the manufacturing industry have increased overall and expectations are that they will remain at the same levels in the coming months. We have also received a new outcome for Statistics Sweden's GDP indicator, which provides an early picture of the development of GDP at the beginning of 2023. It shows that activity in the Swedish economy rose in January and both exports of goods and household consumption increased. Of course, one should not rely too heavily on indicators for individual months. And there is no doubt that GDP growth and the labour market will be weaker in 2023, partly as a result of the tighter monetary policy. But I still think it is worth emphasising that so far the situation in the Swedish economy is not pitch black. Low inflation a condition for good economic performance To conclude – we have our next monetary policy meeting in one month's time. By then, we will have received more information on economic developments, including the outcome for inflation in March.

The Riksbank may buy and sell such securities if there are exceptional reasons, as stated in the act. In principle, this means that we must make the assessment that other measures would not have the desired effect on the economy. The new act now also gives the Riksbank an explicit mandate to trade in securities within the framework of our task of contributing to the stability and efficiency of the financial system. For instance, the Riksbank may buy and sell securities to temporarily support financial markets for the purpose of counteracting a serious disturbance in the financial system, if there are exceptional reasons. The Riksbank's mandate remains strong  3/10  BIS - Central bankers' speeches  I will not go through all the details of the new act that have a bearing on monetary policy. The overall picture is that some things have changed. But the important thing is that we can do what we need to do to fulfil our tasks, in normal times and in times of crisis. The Riksbank has a strong and clear mandate to conduct flexible inflation targeting, where the overriding objective is for inflation to be lastingly low and stable. This is important now that the inflation target is being seriousl put to the test in a situation where inflation significantly overshoots the target for the first time since its introduction in 1995.
These will begin to be implemented in September, under very favourable financing conditions, with the aim of maintaining the current low costs of bank funding and, therefore, of overall borrowing by households and firms. It is perhaps worth reiterating here that the ECB’s monetary policy has had very positive effects on euro area activity and inflation. In fact, by easing financial conditions and reducing financial market fragmentation, the ECB’s expansionary monetary policy has substantially contributed to the improvement in the euro area economy. At the same time, it has prevented the period of negative inflation rates experienced by the European economies further to the crisis-induced recession from turning into a deflationary spiral. Specifically, according to some ECB papers8 and to in-house Banco de España estimates, it is believed the set of monetary policy measures adopted since mid-2014 will have an  7  See M. Draghi (2019), “Twenty Years of the ECB’s monetary policy”, ECB Forum on Central Banking, Sintra, 18 June 2019. 8 Hammermann et al. (2019), “Taking stock of the Eurosystem’s asset purchase programme after the end of net asset purchases”, Economic Bulletin, 2/2019, ECB. 9/16  overall impact on the euro area’s real GDP growth and inflation. In both instances this is expected to be cumulatively of the order of around 2 pp between 2016 and 2020. It should also be underscored that these effects have arisen from the combination of the various instruments used. Beyond their individual impact, these instruments mutually complement and reinforce one another.

There is, of course, no silver bullet that could be applied universally to all countries. Nevertheless, euro area policy-makers should look closely at the recent experience of the Baltic countries and draw the appropriate lessons. I see at least one encouraging take-home message: if properly designed and effectively communicated, if fully supported by international lenders, economic adjustment does not necessarily imply political suicide. III. Lessons for Latvia  Being here in Riga, let me conclude with a few observations about the lessons for Latvia itself. The end of the programme should not mean the end of the adjustment efforts. Key challenges remain also for this country to ensure the sustainability of the fiscal adjustment, to strengthen the fundamental drivers of sustainable and balanced growth and to prevent macroeconomic imbalances from building up again. As regards euro adoption, the challenges that some euro area countries are currently facing illustrate clearly the importance of sustainable convergence. Very careful preparation is required to make sure that convergence continues also after euro adoption. Measures to reduce inflation temporarily or easily reversible measures to lower the fiscal deficit do not represent sustainable convergence. The decision to adopt the euro is a very fundamental one and should not be taken lightly. The ECB published its Convergence Report 2012 last week and we came to the conclusion that Latvia does not yet fulfil all convergence requirements. So there is still a way to go for Latvia and the euro will not come for free.
The question we ask is whether this levelling off is permanent or whether we may expect a further reduction in the use of cash. Let me briefly outline three factors I believe may be of some significance: First, it has become less expensive to use cash in the 1990s. Cash is not an interest-bearing instrument. As such, forfeited interest income is part of the “cost” of using cash. A declining interest rate in the 1990s has substantially reduced this cost, both for the public and banks. Second, the public has been spared the real costs of cash use, while other payment instruments have increasingly been assigned full-cost prices. And third, developments in new payment instruments for small payments - cash cards - have progressed slowly. This is probably in part because we already have a well-developed EFTPOS infrastructure in Norway, and perhaps in part related to what I mentioned above - that cash continues to be an efficient and inexpensive alternative. 7  EFTPOS= electronic funds transfer at the point of sale. 7  BIS Review 7/2000  Predicting further developments in the use of banknotes and coin, both internationally and in Norway, is a difficult task. Low inflation, low interest rates and greater access - for example, via the EFTPOS system’s cash-back arrangement - will promote the further use of cash, whereas new technological solutions will reduce it. Developments in relative prices will also be of importance.

One key driver is the rapid development of Fintech. While the HKMA has done a great deal in the past few years in promoting Fintech, there is still room to further apply new technology in finance in the coming years. This includes, for example, fostering a better ecosystem for Regulatory Technology (or RegTech) and Supervisory Technology (or SupTech). We are also aware that any new risks associated with the increasing use of technology have to be managed. These include for example cyber and data security. We will work with the industry to address these risks. 6. We are also committed to promoting market development opportunities, especially in strengthening the role of Hong Kong as the gateway to the Mainland’s capital markets, in the Greater Bay Area development, and also in green finance. 7. These are rough times. But my colleagues and I will continue to discharge our duties in a professional manner and do our best to serve the people of Hong Kong. 1/1  BIS central bankers' speeches
Reference wage values, social preferences, jobs’ characteristics, skills’ endowments and even Central Banks’ targets, they all change over time – hence, the impact of cumulative wage gaps on inflation cannot be the same in different time periods. In fact, even Phillips (1958) mentioned that he ignored years in which import prices rise rapidly enough to initiate a wage-price spiral. He stated that his hypothesis that the rate of change of money wage rates can be explained by the level of unemployment is supported except in or immediately after such years. In doing that, he effectively acknowledged the non-stationarity of his curve. He referred to those years as events that occur very rarely except as a result of a war. Our approach embraces these events, except that in modern times it is not war that makes the difference, but recessions; and recessions happen more often than wars. We try to explain what happens during and after recessions – which is exactly what is omitted by the original Phillips curve. Wages, as the most important source of income for most households around the globe, stand at the basis of any consumption theory. The main problem with the prevailing consumption theories (Keynes’ consumption function (1936), Modigliani’s life-cycle hypothesis (1966) and 2  Friedman’s permanent income hypothesis (1957)) is their long-term approach. This puts them at odds with our rather short and medium-term perspective on inflation, especially in times of crisis.

For Phillips Curve to work, the loss of welfare from a negative cumulative real wage gap has to be fully compensated first – as a stock measure, not as a flow. The policy implication from this finding is that, for those countries which have not closed their cumulative real wage gap (most of the developed economies), inflation will remain subdued until they close their cumulative wage gap. Distinguished guests, I would like to thank the organizers, Central Banking, for inviting me to speak about a very topical issue: subdued inflation. Inflation has been subdued in the post-crisis years, and the Phillips Curve has failed to explain it. It is probably the greatest mystery of the economic science in the last decade: where has the Phillips Curve gone? There are multiple references to the fact that the Phillips Curve has flattened over the last decade, if not earlier (to mention just a few: Forder (2014), Leduc and Wilson (2017), Borio (2017), Carney (2017), Cunliffe (2017), Praet (2016, 2018), Spencer (2017), Murphy (2018), Bullard (2018)). The flattened Phillips Curve and the lesser link between inflation and unemployment, inflation and output gaps, or inflation and wages, have multiple explanations.
For example, unemployment has risen markedly and manufacturing is suffering from the continuing low level of technical capacity utilisation. Finally, the events of the past two and a half years have shown exactly how vulnerable our country is in the event of a banking crisis, particularly one involving large banking institutions. I would therefore like to begin by outlining a few of the Swiss National Bank’s thoughts on the “too big to fail” issue. I will then briefly review our monetary policy in 2009, and describe the  BIS Review 59/2010  1  challenges facing the SNB in this area. In the final part of my speech, I will address the recent discussion surrounding the appropriate level of inflation. II. The “too big to fail” issue  Without appropriate countermeasures, Switzerland would remain very exposed to any fallout from a banking crisis. True, the big banks have substantially cut their balance sheets, something which the SNB explicitly welcomes. Yet the size of those balance sheets still represents a multiple of our country’s GDP. And the big banks continue to hold a dominant position in domestic lending and investment business. They are thus still “too big to fail”. In a comparable crisis, the government and the SNB would once again face an impossible choice: either they accept the devastating consequences of a big bank failure for the Swiss economy, or they take on the considerable financial risk of stabilisation measures.

It is ironic that only when problems in advanced economies led to contagion elsewhere and large number of central banks entered into such swap agreements with the Federal Reserve, did the IMF agree to such an instrument. This also reconfirms the need for greater voice and representation of emerging markets in important international financial institutions (IFIs) as highlighted in the recent G-20 Summit Declaration. While the reform is underway under the IMF, it is only with hope that other fora, including, the FSF will take the issue into consideration more seriously. Let me elaborate further on the importance of having emerging markets participated in the systemically important international fora. I think you all agree at this advanced economies or emerging markets are all prone to sectoral imbalances, which, if left unchecked, can lead to a full-blown crisis, anywhere, any time, when the bubbles burst. The impact of a crisis in an advanced, systemically important country can be much broader and deeper, creating a larger scale of world-wide externality. Emerging markets, unlike others, have had our share of coping with new challenges brought on by this phenomenon as well as those created by us one decade ago. It is, therefore, not only the responsibility of advanced countries to be in charge of global surveillance but also the responsibility of emerging markets to share our views and experiences of how to reform ourselves to be better prepared for greater uncertainty.
They may perceive that there is a first-mover disadvantage in attracting and retaining talent. Another possible reform could involve putting a greater onus on senior management for the costs incurred from regulatory fines or other legal liabilities, rather than on shareholders alone. Shareholders should not be shielded from such costs and fines—as they may have also profited from associated gains—but it doesn’t seem fair or prudent to shield the decision-makers from responsibility for costly breakdowns as much as they are now. Greater personal liability may also be a powerful incentive to promote better behavior. I suspect changes in these areas would lead senior managers to encourage their staff to speak up earlier about emerging risks, be more attentive when red flags were raised, and respond sooner and more forcefully. I would also note that the many regulatory reforms introduced over the past decade may create incentives of their own, with important implications for bank behavior. Such incentives may alter the nature and locus of risk-taking, and therefore need to be closely monitored. Risks could be shifted outside the banking system, or the incentives could lead to different bank strategies, business models, and product offerings that introduce new risks. There is a long history of such behavior. For example, off-balance-sheet instruments rose sharply in the 1980s in response to the introduction of minimum primary and total capital requirements based on balance sheet size.

Recently, moreover, there have been tendencies for households to be more uneasy about their own economic situation. A more positive development is favoured by the fact that the international financial crisis has subsided. During the autumn there were strong fears that financial problems would subdue international activity for several years. With the normalisation to date, the probability of this has decreased. The December outcome for consumer prices was somewhat lower than expected. The CPI fell 0.6 per cent, which can be compared with our forecast of a fall of 0.3 per cent. The main explanations are a weaker development of commodity prices and falling interest rates. The assessment of future inflationary pressure has to take these and other factors into account. At the same time, the downward path of market interest rates in recent months represents a demand stimulus further ahead. This, too, must be considered in the assessment of inflation. If nothing untoward happens, the Riksbank’s next monetary policy meeting will be held on February 11th. It will then be up to the new Executive Board to evaluate the information that has been received and decide the level of the repo rate. *  BIS Review 9/1999  *  *
The sustainability of the pension system – i.e. certainty as to the ability to fund it appropriately – is essential for giving stability to public finances and for the credibility of any programme to consolidate total public spending. For the system to be sustainable, it must find a way to accommodate its key elements, namely the retirement age, the means of calculating pensions and the so-called "sustainability factor". I hope and trust that political forces will continue working on this delicate and very important matter, in the spirit of the Toledo Pact agreed almost 20 years ago, and which has repeatedly been supported by our parliamentary institutions. The major budgetary figures and the macroeconomic aggregates for 2014 The 2014 Budget is the first to be drawn up following the entry into force of the latest European budgetary governance reform, which introduces into countries' budgetary procedures an assessment by the European Commission of draft general government budgets. In Spain's case, this reform will lead to the availability of a single document drawing together the main budgetary items of all levels of government, i.e. one that includes the regional governments. In a country as decentralised in terms of public spending as Spain, as decentralised or more so than other countries with a federal political structure, the preparation of this documentation is a fundamental requirement for the appropriate assessment of budgetary forecasts. According to the agenda set, this document will be available, at the European level, in the coming days.

Thus, after the May cut in rates, in July the ECB announced that the Governing Council expected rates to remain at the new level, or at a lower level, for a protracted period. In any event, the contribution monetary policy can make to resolving the problems at the root of the crisis is limited, and can hardly go beyond providing the time needed for other economic policies to bear fruit, policies that do have the wherewithal to curb these problems. For full normalisation of the area to come about, Member States must successfully see through the adjustments to their domestic economic policies to adapt them to what a monetary union requires to function. From this perspective, I believe we should assess the progress made towards banking union in Europe. In the coming days, the European Union Council will approve the legislation to underpin the creation of the Single Supervisory Mechanism (SSM). That will formally set in train the process that will culminate in the assumption, by the ECB, of microprudential supervision in the euro area in autumn next year. There is virtual consensus around the conviction that the banking union will be a decisive instrument for breaking the loop between banking risks and sovereign risks, enabling the degree of financial fragmentation still prevailing in the area to be reduced and, we trust, ultimately eliminated.