samchain/econo-pairs-v1 huggingface dataset:
To come up with its forecast, the MPC has to reach a view based on all the information available to us: data, theories, a variety of models, business and market intelligence, our own experiences and judgement and so on. But there are huge uncertainties within the information set and so there must be equally great uncertainties about the resulting judgements. That is why the one, indeed the only, thing we know for certain about any forecast of the economy is that it will be precisely wrong. That is also why the MPC puts little weight on its central projection, and chooses to communicate its judgments to the public by focusing on the range of possible outcomes and the balance of risks, as summarised in the fan chart.7 What this means is that setting monetary policy is about decision making under uncertainty. It isn’t clean. In fact it’s very messy. But nobody has a working crystal ball. The important question for us is not whether we got the central projection right but whether we set the right policy, given what we knew at the time. Crucially, we are accountable to the public, including via the Treasury Select Committee, for our policy decision. I do not think I have heard many argue that we should have done something materially different with policy during the depths of the recession in 2009 (i.e. to the extent necessary) in order to generate a different outcome for inflation now.

The closer these cushions are to levels that reflect potential future exposure across a more adverse set of market conditions, the more resilient markets and institutions will be under conditions of stress, and the less likely the prospect that the behavior by institutions will amplify financial shocks. Stress testing and scenario analysis is an important part of the process of calibrating this relationship between risk and capital and margin. The test of a sufficiently strong process is not simply the realism of the process used to measure potential losses, but the impact that it has on the decisions made by the institution on the size and type of exposures relative to earnings, capital and collateral or margin and the terms on which it extends credit. Let me conclude by noting again that we are in a period of perceived strength in economic fundamentals in the United States and many countries around the world. This strength has helped to induce significant reductions in a range of market-based perceptions of risk. Much of this confidence may prove warranted and durable, but the extent to which it endures will depend in part on the degree to which those running the major financial institutions in the United States use the opportunity presented by this period of relatively high profitability to strengthen their capacity to withstand a less favorable overall macroeconomic and financial environment.
Analysis of the data from the experiment shows that those who moved to lower-poverty areas when they were 12 or younger were found to earn about 30 percent more, on average, in their early- to mid-twenties compared to those who did not move, were 27 percent more likely to have entered college, and 30 percent less likely to be a single parent. The MTO experiment again illustrates the importance of neighborhood effects on child development early in childhood. It also demonstrates that grants to move families to lower-poverty neighborhoods may reduce the intergenerational persistence of poverty. Of course, mobility of the sort that Chetty and other researchers have emphasized interacts in a very important way with the availability of affordable housing. Making high quality neighborhoods accessible to families from all socioeconomic backgrounds is a major challenge for public policy. Of course, illegal racial and other discrimination has played a role in preventing access to high-quality neighborhoods. However, part of the challenge arises from the fact that in a free-market economy, the quality of the environment is reflected in the price of land – and thus housing – in that place. This means that the neighborhoods with the best schools, the best access to jobs, shopping, recreation and other amenities will be the most desirable and will have the highest cost of land and housing. Simply put, families seeking the upward mobility that better neighborhoods can promote may well find that housing in these neighborhoods is unaffordable.

William C Dudley: Economic opportunity and income mobility Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Association for Neighborhood and Housing Development Annual Community Development Conference, New York City, 11 April 2016. *  *  *  Good morning. I am very pleased to speak at the 6th Annual Community Development Conference. I would like to give a special thanks to the Association for Neighborhood and Housing Development for organizing this conference about issues of importance to the community development industry and to the future of New York City. At the Federal Reserve Bank of New York, we develop a wide variety of research and data products to gain a deeper understanding of regional economic conditions. We track the health of household balance sheets at the state and local level using data from the New York Fed’s Consumer Credit Panel. We also conduct an annual poll of small businesses to understand their credit needs and credit availability. My meeting with you today is part of our continuing efforts to understand what is going on at the grassroots level of our economy and to share insights from the New York Fed. The Federal Reserve has dual objectives, set by Congress, with respect to monetary policy – maximum sustainable employment and price stability. I would like to focus my remarks today on the first of these objectives.
Hopefully, the weaker trend during the period that began in the early 1970s has been reversed in the past few years. However, this cannot be taken for granted. One explanation for the recent stronger growth is that the deep recession left a reserve of unutilised resources that could gradually be taken into use. Nevertheless, potential GDP growth is now often said to be between 2% and 2.5%, since most analysts consider that the productivity trend has improved slightly in recent years. 1  BIS Review 137/1999  Figure 1. GDP growth during the 20th century  1. GDP-growth during the 20th century Annual average per decade 6 5 4  Average 3%  3 2 1 0 -1 1900 1910  1920  1930  1940  1950  1960  1970  1980 1990- 19941993 1999  Figure 2. The Swedish population  2. The Swedish population 10  8,9  Million inhabitants  8  7,0 5,4  6 4,2 4 2,6 2 0 1820  1870  1910  1950  2000  In both the 19th and the 20th century the Swedish population has roughly doubled. In 1820 it totalled 2.6 million; at the beginning of the 20th century, it was almost 5 million, and the figure today is almost 9 million. BIS Review 137/1999  2  These figures mean an average annual population growth rate of around 0.7%. That is not the case today; the current figure is closer to approximately half of this level.

7  BIS Review 137/1999  Employment was provided for more and more people, living standards rose and growth was among the highest in the world. Opinions about the causes of the pronounced change in the Swedish economy are not completely unanimous. An increasingly stable form of government presumably contributed. A series of constitutional reforms provided a guarantee of stability. The stable prices presumably played a part. When inflation is low or the price level is stable, those who have to plan for the longer run face less uncertainty. After a rather chaotic period in the history of the monetary system, the introduction of the silver standard in the early 1830s and subsequently the gold standard led to price stability. Another significant factor was probably the credit system’s development. Banks were established and the abolition of interest controls was followed by more financial expertise. That made it possible to exploit the inventions and finance investments in the emerging industries. Economic activities benefited from the abolition of trade guilds, freedom to trade and the reform of joint-stock companies. The reform of elementary education was, of course, another important step that ultimately promoted human capital. This catalogue is not intended to be a complete account of all the factors behind Sweden’s transformation from a poor country into a rapidly expanding industrial nation. The point I want to make is that a variety of institutional changes seem to have been needed to provide a stable framework for the subsequent process of industrialisation.
The banking union represents one of the greatest achievements of European integration. Banks are now supervised at the European level, which enables risks that transcend national borders to be identified. Completing the banking union, in particular by setting up a European deposit insurance scheme, should be a priority for national governments. If we look back 40 years, it’s clear that Spain today is a more prosperous and modern country. However, we must not forget that much remains to be done. Improving the functioning of the labour market is still an outstanding issue – more than 3 million people remain unemployed, and the youth unemployment rate is still above 30%. But there are grounds for optimism. Following the collapse in GDP during the hard years of recession, Spain, supported by the European Central Bank’s measures, has reached an annual growth rate of 2.8% over the last five years, well above the European average. Spurred by the need to search for new markets during the years in which domestic demand tightened4, Spanish businesses have managed to find opportunities overseas and many are now global leaders in their sectors. Spanish society has worked very hard to return to economic growth after almost a decade marked by the crisis, and it has done so while remaining true to its commitment to Europe. 40 years ago the Spanish people voted for a better country – one that was democratic, open and modern. The 1978 constitution and the process of European integration have enabled us to make this better country a reality.

On the basis of current information and prevailing futures prices for oil, annual HICP inflation is expected to remain very low or negative in the months ahead. Supported by the favourable impact of our recent monetary policy measures on aggregate demand, the impact of the lower euro exchange rate and the assumption of somewhat higher oil prices in the years ahead, inflation rates are expected to start increasing gradually later in 2015. This assessment is also broadly reflected in the March 2015 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 0.0% in 2015, 1.5% in 2016 and 1.8% in 2017. In comparison with the December 2014 Eurosystem staff macroeconomic projections, the inflation projection for 2015 has been revised downwards, mainly reflecting the fall in oil prices. In contrast, the inflation projection for 2016 has been revised slightly upwards, also reflecting the expected impact of our recent monetary policy measures. The Governing Council will continue to closely monitor the risks to the outlook for price developments over the medium term. In this context, we will focus in particular on the passthrough of our monetary policy measures, geopolitical developments, and exchange rate and energy price developments. When discussing the economic outlook and the new projections, the Governing Council acknowledged that the staff projections are conditional on the full implementation of all our policy measures. Moreover, the March staff projections extend the horizon to 2017.
In other words, the goal is to ensure that credit conditions in the euro area will not depend on where you are but on who you are, which is what should be expected of an efficient financial market. To achieve this, we need to have three things in place: i)  Federal bank supervision, to guarantee that all institutions are subject to the same rules and same methods of control. A supra-national supervisor is in fact better placed to assess the risks of cross-border activities and therefore to protect and encourage such activities; it is not subject to national biases that can lead to the temptation of economic introversion. It is therefore more credible and strengthens stability and confidence in the area;  ii)  A unified mechanism for the resolution of banking crises, so that individual countries no longer have to shoulder the burden of major upheavals on their own;  iii)  A unified deposit-guarantee mechanism to avoid banking panics. Over the past year, these ideas and words have translated into concrete actions, and Europe has demonstrated that it can carry out rapid, in-depth reforms, to ensure it emerges stronger from the crisis. I would just like to tell you where we stand currently in the move towards banking union. As you know, the area in which we have made the most progress is in supervision.

Let me go over some of the reasons why we chose this path. The euro area crisis, and in particular the more acute episodes of banking turmoil, revealed a number of basic weaknesses at the heart of the monetary union. i)  First, the problems encountered by some of the big banks severely damaged the fiscal stance in certain countries, where the state had to step in to save these banks. This, in turn, undermined market confidence in the sustainability of the resulting fast growing public debts, which led to sharp rises in the rates at which those countries could borrow on the market, as, for example, in the case of Ireland. ii)  Second, there was a perception that countries with impaired public finances would have difficulty bailing out their respective financial systems in the event of a problem. This resulted in a widespread loss of confidence and pushed up borrowing costs for banks and sovereigns, as in the case of Italy. iii)  In response to these tensions, the European Central Bank took unprecedented steps to lower the cost of bank refinancing, cutting its key policy rates to historically low levels and providing unlimited 3-year liquidity. But even this proved insufficient to calm market tensions. In some countries at least, monetary policy measures were simply not being fully transmitted to the real economy. What was the reason behind these three phenomena, which were largely responsible for the escalation of the crisis in the euro area?
François Villeroy de Galhau: European and French economic outlook and post-Brexit financial architecture Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the 2019 Paris Europlace International Financial Forum, Tokyo, 28 November 2019. * * * Ladies and gentlemen, It is a great pleasure to be with you again in Tokyo, with my colleague and friend Governor Kuroda. The Paris Europlace international financial forum in Tokyo is now a well-established tradition… even if the topic of your sessions touches upon “new frontiers in finance”. In my remarks today, I will elaborate on the European and French economic outlook, before turning to the future European financial architecture after – and beyond – Brexit. ** I. Causes of and answers to the current European slowdown The causes of the European slowdown initially lay outside the euro area: of these geopolitical uncertainty is undoubtedly the most important; it is mostly man-made, and must be fixed by man. We are witnessing a significant slowdown in global trade due to the escalation of trade disputes. The consequent loss of global growth could reach up to 0.8% next year according to the IMF, mainly due to indirect effects, beyond tariffs: the fall in business confidence and investment, the decrease in productivity. Similarly, the twists and turns of Brexit have created market volatility and weighed on business investment. The effects of the slowdown are very acute in the euro area’s biggest economy, Germany, which is very much exposed to global trade. Structural trends are also at play.

I would like to make a clear pledge: the Basel III agreement is intended to apply everywhere in a consistent manner, including of course in the United States. Those anywhere who would recommend not transposing Basel 3 would give in to the temptation to forget, ten years after the Great Financial Crisis; they would take the responsibility of increasing financial stability risks, at a time when these risks are already significant. That said, rest assured that we will insist on a fair and reasonable implementation in Europe, taking into account the specificities of the European banking sector in order to avoid undue impact on capital requirements. II. The French economy is resilient, with growth expected at 1.3% this year Despite this darker context, the French economy is resilient, with growth expected at 1.3% this year, three times higher than the German one. This expansion is being sustained by a robust internal demand. Real household income per capita is accelerating sharply (increasing by around 2% in 2019) at its fastest pace since 2007, due to the fiscal stimulus and to a larger extent to the strength of labour income – 1 million jobs have been created over the past four years. Many important reforms have already been adopted. Of course, much remains to be done to tackle structural unemployment, which is still too high. III. Beyond Brexit, building a new European financial architecture Brexit is and remains bad news for everybody but above all for the British economy.
We do see increased interest in cross border investments from within our region, particularly in the financial sector. With respect to the need to mobilize domestic savings, Africa certainly needs to expand the reach of the financial sector and to make the financial sector more efficient. In Zambia, the majority of the population does not have access to financial products. The Bank of Zambia has therefore made advancing financial inclusion as one of its strategic objectives. Zambia has a very low population density and there are many areas that are currently not served by any financial institution. Reaching these areas will require the application of technology and the concept of branchless banking. To facilitate such innovation, a robust regulatory regime governing the payment system has been implemented with the enactment of the National Payment Systems Act in 2007. In this regard, Zambia is learning a lot from the advances made in countries such as Uganda and Kenya, where cell phone technology has expanded the reach of financial services and products. On its part the Zambian Government is also taking concrete steps to enhance the application of Information and Communication Technology across the broad spread of Government services and the private sector. How can we build better and more resilient institutions that boost confidence in the benefits of a market economy and can act as strong anchors of inflation expectations?

Zambia has also benefitted from increased support from bi-lateral donors, with the prospect of additional resources being made available in the current calendar year from the European Union amounting to around 13% of all the grants that were scheduled to be received in 2009 from the EU and individual donors. Institutions such as the African Development Bank have also made changes to their procedures aimed at fast tracking the disbursement of critical development finance resources, against already approved projects. However, there are serious concerns that Africa has been disadvantaged in the allocation of resources made available by the international community – particularly to key institutions such as the AfDB. There is also concern that whilst the principle of increased resource flows through Institutions such as the IMF should be targeted beyond the traditional BoP needs has generally been accepted at a political level, there is some reluctance at the institutional level for institutions such as the IMF to venture outside of their traditional confines of their support. In Zambia, the Government has engaged our cooperating partners to ensure that the additional resource provided to help African countries deal with the global crisis can be utilized to do just that – and not be simply kept for a rainy day that ignores the current  4  BIS Review 128/2009  monsoon. In my own personal interaction with the IMF, I believe that in Zambia we do have a good common understanding on this issue.
TRICHET: The quantum leap we are asking for in surveillance of fiscal policy has to be the equivalent, in our own institutional framework, of what a federation could do. And we should not overestimate labor mobility in the U.S. and underestimate it in Europe. If I take the U.S. state with the highest unemployment and the state with the lowest, I am not that far from what we observe in the euro area, for instance in 2009 between 18% and Spain, 3,7 % in Netherlands, and between 13,6 % in Michigan, and 4,3 % in North Dakota, 4.3%. WSJ: Should senior bondholders of bank debt be forced to accept haircuts in the event of a bailout, as proposed by the European Commission? TRICHET: This is not a European concept. This is a global concept, which is discussed in particular at the level of the Financial Stability Board and of the Basel Committee It is particularly important for so-called systemic financial institutions. Very careful analysis is  BIS central bankers’ speeches  3  required on the various possible options – additional capital buffers, contingent capital, bailing in financial instruments, etc. I would say for us it is still a work in progress. In any case I don’t imagine we could have a different solution in Europe than in other advanced economies. WSJ: What can be done to improve the euro zone’s growth potential?

Within a few weeks, Spain will be holding general elections, which should be cause for a far-reaching debate on these challenges. A minimum consensus should ultimately emerge on the policies best suited to tackling them, thus ensuring that such policies are durable (a key factor if they are to be successful). Our ability to secure lasting improvements to the well-being of the general public and real convergence with our European partners will largely depend on this. 26  Stuhler, Grébol and Machelet are the joint authors of the forthcoming paper Educational Mobility in Spain. 27  Grébol, Machelett, Stuhler and Villanueva (2023). 28  This statistical relationship has been called “The Great Gatsby Curve”. Corak (2013). 9