samchain/econo-pairs-v1 huggingface dataset:
Also, although we believe that the Fund should be more explicit about the reasons why its recommendations may not deliver the expected outcomes, we note that this should not be interpreted as, nor convey the message that, the Fund’s recommendations are always correct or that member countries’ authorities always take a defensive attitude. We believe deeply in a policy dialogue process that could be beneficial to both parts. At the end, successful policies are those implemented by economic authorities that feel them their own and are capable to create the political framework for their execution. We also support a more systematic focus of the Fund’s surveillance on regional developments by detecting regional trends and fostering dialogue with region-wide institutions such as ECLAC. Along  2  BIS Review 2/2007  these lines, we appreciate the Fund’s regional outlook report, whose last issue was simultaneously launched in Mexico City and Santiago in early November. As a Central Bank fully committed to an inflation-targeting framework, we place substantial weight on making continuous efforts in strengthening transparency. In this direction, we think that the Fund’s communication strategy would be more effective if analysis goes beyond the mere publication of reports, making it an integral part of the public debate on policies and economic reforms. Considering the importance of communications, we believe that enhancing the Fund’s outreach activities both at global and regional level will strengthen the effectiveness of the Fund’s monitoring and surveillance.

This assessment will be informed primarily by our staff macroeconomic projections, on which all data are incorporated in a coherent manner. In this regard, the staff March forecast pointed to a weakening of activity in 2023, with real euro area GDP expected to grow by 1% in 2023 (compared with 3.6% in 2022). This scenario is somewhat more optimistic than that of the previous projections (published in December), reflecting better than expected recent economic data and the fall in the cost of energy, so that real income losses are lower. Growth is expected to pick up, to 1.6%, 1  See “An overview of the ECB’s monetary policy strategy”. 1  in both 2024 and 2025, based on a robust labour market, improving confidence and the recovery of purchasing power. However, these growth rates are lower than projected in December owing to a stronger tightening of financial conditions, including a larger appreciation of the euro exchange rate. And, in any case, the accumulated growth path expected now for 2022-2024 is significantly lower – around 2.5% lower – than that projected in December 2021, before the war in Ukraine, reflecting the material deterioration of euro area terms of trade. On inflation, the baseline scenario is one of gradual convergence of inflation to our 2% target. After peaking at 10.6% in October last year, HICP declined to 6.9% in March this year, according to the flash estimate, on the back of lower energy prices and base effects.
Hence it is very important to think about how policy influences the expectations of the private sector. Consider a simple and stark example. Suppose that a central bank managed to control inflation perfectly by responding to all shocks instantaneously. The outcome would be a constant inflation rate. Households and firms would know that potential movements in inflation would never emerge because all future shocks would be instantly offset by changes in interest rates. Interest rates would change with no apparent link to or effect on inflation. To an observer – whether journalist or econometrician – interest rate changes would appear to have little to do with inflation. The central bank would appear to be behaving almost randomly. But that inference would be false. Indeed, if people did expect the central bank to behave randomly, then the behaviour of households and firms would change and inflation would no longer be stable. This is what I call the Maradona theory of interest rates. The great Argentine footballer, Diego Maradona, is not usually associated with the theory of monetary policy. But his performance against England in the World Cup in Mexico City in June 1986 when he scored twice is a perfect illustration of my point. Maradona’s first “hand of God” goal was an exercise of the old “mystery and mystique” approach to central banking. His action was unexpected, time-inconsistent and against the rules. He was lucky to get away with it.

Chart 3 shows that the slope of the short-run Phillips curve has moved around during the post-war period, apparently in response to changes in the monetary policy regime. In the 1970s labour market pressure was not offset by tighter monetary policy, leading to a spiral of wage and price inflation. The short-run Phillips curve steepened, with larger inflationary consequences of any deviation from the natural rate of unemployment. As monetary policy became more focused on controlling inflation, the Phillips curve flattened in the latter part of the 1980s and 1990s. Such changes in the monetary policy regime can also be detected in the behaviour of inflation over time. Table 2 shows that the persistence of inflation – measured by the estimated explanatory power of past inflation in predicting current inflation – has fallen quite markedly since the inflation target was introduced in 1992. Was this  4  BIS Review 36/2005  because the failure of monetary policy to react quickly to an inflationary shock in the 1970s meant that inflation remained high for some time? And has the prompt response of monetary policy meant that movements in inflation more recently have proved short-lived? The answers to these questions matter for monetary policy. But the economy is continually evolving, and we can never definitively conclude that one answer is right and the others wrong. So learning about changes in the structure of the economy lies at the heart of the daily work of central banks.
Others, facing more severe liquidity pressures, may seek to undertake voluntary rescheduling or rollover of debt by bringing together all or some of their major creditors, as in the cases of Korea and Brazil. Those facing unsustainable debt positions may seek to negotiate market-based write-downs of their debt, as in the cases of Ukraine, Pakistan and Ecuador. And in yet another set of cases, a country may find it necessary to impose a temporary timeout on payments to all creditors, to give themselves some breathing space to address macroeconomic or co-ordination problems. The decision on exercising any of these options must rest with the debtor country. The role of the official sector is to ensure that the full menu of financing options is made known and available to the debtor, from which it then chooses. This menu should include both the easier options – such as raising new private sector money – as well as the harder ones – such as suspending payments. Each of these options is backstopped by limits on IMF lending, so that the "pure bail-out" option is heavily circumscribed. Indeed, it is this backstop which helps provide the incentive for creditors and debtors to seek alternative, market-based solutions sooner. The IMF should stand ready to assist countries, whichever of these options debtors choose to exercise, provided the appropriate prior conditions are satisfied.

Ardian Fullani: The importance of consumer confidence indicators Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Press Conference on Publication of Business and Consumer Confidence Surveys, Tirana, 16 February 2009. *  *  *  Distinguished participants, We are holding this meeting to announce business and consumer survey results. These surveys represent an important long-run project of the Bank of Albania. Starting from today, the Bank of Albania will quarterly publish them, together with supporting materials for the user, including a publication schedule, the methodology applied for their compilation and the relevant questionnaires. Considering this day as a special one, I avail myself of the opportunity to share some ideas with you on the importance of confidence indicators, their methodology and the significance the Bank of Albania has given to this project. The publication of business and consumer confidence indicators is an important moment for enhancing Bank of Albania’s transparency. For some years on end, these indicators have been produced and made use of by Bank of Albania’s experts and by its decision-making structures, but now it is just the time to share this useful product with potential users of all levels. I would like to highlight that the results obtained from the processing of businesses’ and consumers’ answers are totally independent of and not influenced by the Bank of Albania, by economic, political and social conjunctures at home and abroad.
When the normalization process starts and we raise the target range for the federal funds rate, what should we anticipate? I anticipate a smooth lift-off in terms of the ability of the FOMC to push the federal funds rate up into a higher range. Less clear is what the financial market reaction will be. Will it be more like the turbulent taper tantrum of 2013 in response to Chairman Bernanke’s remarks that we might at some point begin to taper our asset purchases, or the benign response when the FOMC actually tapered in 2014? Let me consider these two issues in turn. I am very confident that the Federal Reserve has the tools in place to ensure that the FOMC can successfully raise the federal funds rate into a new, higher target range when the time comes to do so. This reflects several factors. Most importantly, we have demonstrated that the interest rate paid on banks’ reserve balances (IOER) – which is our primary tool to raise the federal funds rate target – and daily overnight reverse repo (ON RRP) operations – which is a supplementary tool to help put a floor under money market rates – have been effective in keeping the federal funds rate well within the FOMC’s desired target range.

Innovation is as much about creating new institutions and smart collaborations to advance common goals, as it is about inventing a new product. We see this in the notion of “co-opetition”, where competing firms have found benefits in coming together to build shared infrastructure, or to facilitate the exchange of information for the purpose of preventing criminal activity and guarding against cyber threats, all the while remaining fierce competitors in their product and service offerings. Innovation is also about constantly finding better ways to do things within an organisation in order to deliver a better customer experience and to keep organisations interesting and fresh. It is about changing mindsets and culture to ensure that institutions never become tired or irrelevant. It is about re-thinking our approach to developing the workforce so that we are at our most agile to deal with new challenges and risks. These are all important aspects of innovation and I am reminded that in Malaysia’s own journey to transform the MSB industry, we benefitted from charting new and sometimes, untested paths to solve the problems that we faced. For example, we learnt from and then re-defined the principal-agent model to meet the dual objectives of maintaining broad access to money services while raising compliance and operational standards. We departed from conventional regulatory and supervisory approaches, on the conviction that we could not achieve our objectives through enforcement alone.
Natasha Ahmetaj: Interesting facts from the Treasury - art in Albanian banknotes Welcome address by Ms Natasha Ahmetaj, Second Deputy Governor of the Bank of Albania, at the launch of “Interesting facts from the Treasury: Art in Albanian Banknotes", Tirana, 19 May 2017. * * * Dear friends, dear guests, Today, we are together at the premises of the Bank of Albania, not only in the attribute of this place as the house of money, figuratively, but also in the physical sense of the word, as this room is next to the old treasury room. We have invited you today to enjoy another dimension of the currency, that of an authentic artwork. A work of art always speaks more broadly and deeper than its mere physical dimension. Today, we are in a Museum of works of art. Museums are more than just expositions. While you move from one display to the other, you are not simply walking some centimetres along the street, but you travel through centuries of history. Those few centimetres take you through eras of social civilisation. This is a unique feeling you can only experience in a museum. A zoo or a botanical garden depicts the real world in miniature. But it shows the actual living world. By contrast, a museum brings together different eras, the past and the present. This is especially true in a museum of banknotes and coins. Modestly, our Museum does that as well.

Ladies and Gentlemen, this seminar comes at a time when the economic performance of our country has significantly strengthened as partly reflected in the developments in the gross domestic product (GDP), inflation, interest rate and exchange rate. At a preliminary estimate of 5.7% in 2007, growth in real GDP has been above 5% for the fifth consecutive year. During the month of January 2008, inflation remained in single digit at 9.3%, from 8.9% and 8.2%, in December 2007 and December 2006, respectively. Commercial banks lending rates have also exhibited an investment-supportive trend while the Kwacha has remained relatively stable. Further, we have observed an improvement in the fiscal operations of the Government, which is supportive of the country’s inflation and growth objectives. The financial sector has also been very stable and registering appreciable growth in the recent years. Nevertheless, Mr. Chairman, despite these achievements, our country like so many other developing countries, still faces some challenges. Notable among these, is the urgent need to consolidate and build the gains so far attained. In particular, the need to attain sustained price and financial systems stability can hardly be over-emphasised. This is even more pronounced given the recent electricity outages experienced across the country and floods that have ravaged some parts of Zambia. Chairperson, it is also pleasing to note that, in the recent past, there has been recognition of the need to adopt economic and structural reforms in most African countries and some benefits are already evident in this regard.
Just the reverse, I would say, in the light of quite a few years in the vicinity of decision-making in economic policy. Economic outlook in the coming years A suitable starting point for a discussion of the economic future is the October Inflation Report. Our assessment there assumed that international economic activity will tend to slacken but still remain relatively strong. We counted on GDP growth in the OECD area being 3.8% this year, followed in the next two years by 3.0 and 2.7%, respectively. Inflation would remain relatively low, partly in view of strong competition in the international markets. Growth in Sweden was judged to be 4% this year, 3.7% next year and 3.0% in 2002. Domestic demand growth would be relatively high for consumption as well as investment. A damper was expected, however, from an appreciation of the krona. A gradual increase in inflation was predicted, so that two years ahead the rate would be approximately in line with our target. As usual, we identified various risks in our forecast. One was the possibility of the oil price staying at a high level. We also considered that the exchange rate might be weaker than economic fundamentals in Sweden would warrant in the longer run. Another risk was that of higher wage increases. It was conceivable that the wage rise would be even higher than the annual rate of just over 4% we had assumed for the coming two years, due, for example, to far-reaching demands for compensation and parity.

If inflation is expected to be above the 2% target during this time horizon, the interest rate is normally raised and vice versa. This rule was formulated with a view to making policy more intelligible, to ourselves as well as to others. We also believed a rule of this kind would serve as a structure for decision-making and help to enhance confidence in monetary policy. In my opinion, the rule has served these purposes. It has contributed, not least, to a more structured discussion of monetary policy issues and thereby to a deeper understanding of the choices we have to make. Have we observed our rule? Judging from this chart, I would say we have (Chart 2). The chart shows the repo rate in practice together with the path indicated by the Riksbank’s inflation assessments. You will see that we have followed our forecasts fairly closely and thus adhered to our rule of action. Deviations have occurred, mainly in the early years with the inflation target; I believe they were largely connected with concern about the exchange rate.
15  Table 2 World growth (annual change, percent) 2017  2018 (f) 2019 (f) 2020 (f) Sep.18 Dec.18 Sep.18 Dec.18 Sep.18 Dec.18 MP Report MP Report MP Report MP Report MP Report MP Report  World at PPP World at market exchange rates Trading partners  3.7 3.2 3.7  3.8 3.1 3.6  3.7 3.1 3.6  3.6 2.9 3.5  3.5 2.8 3.5  3.4 2.8 3.4  3.3 2.7 3.3  United States Eurozone Japan China India Rest of Asia Latin America (excl. Chile) Commodity exporters  2.2 2.4 1.7 6.9 6.7 4.4 1.1 2.7  2.9 2.1 1.0 6.6 7.3 4.2 1.3 2.3  2.9 2.0 0.9 6.6 7.3 4.2 0.9 2.5  2.3 1.9 0.8 6.2 7.6 4.1 2.1 2.2  2.3 1.8 0.8 6.1 7.6 4.0 1.8 2.3  1.9 1.7 0.5 6.1 7.6 4.2 2.6 2.2  1.7 1.7 0.5 6.0 7.5 4.1 2.5 2.2  (f) Forecast. Source: Central Bank of Chile. Table 3 Stylized facts of the Chilean labor market 1. Female participation has rise while youth participation has diminished, in line with increased coverage of college education. 2. Human capital has grown importantly, but lags remain with respect to developed countries in terms of coverage and especially quality. 3. The return on working expertise of Chilean workers is low from an international perspective, with wide differences among persons with different educational levels. 4. Informal work has decreased in Chile, but is still way above the standards of developed countries. 5.

The baseline scenario uses as a working assumption that the monetary policy rate will continue to rise in the coming months to approach its neutral level of 4% to 4.5% in the first half of 2020. The Board has stated that it expects to adjust the MPR in a gradual and prudent manner. In particular, the implementation of monetary policy will be conditional on the effects of incoming information on the  4  projected inflation dynamics, making the necessary adjustments to policy measures if faced with significant deviations in either direction. Risk scenarios As usual, there are internal and external elements that may alter the projections I just presented you. Like in the past several quarters, the risk balance of the external scenario relevant to Chile remains biased downward. The main risk continues to be a drastic deterioration of financial conditions facing emerging economies, which could result from some of many elements. On one hand, whatever happens in the US is important to us, because of its effects on inflation as well as its monetary policy and economic outlook. On the other hand, major geopolitical risks persist. The trade conflict has tended to refocus on the US versus China, in a context where the Chinese economies have activated several stimulus measures, but financial risks remain while the economy rebalances. In any case, the meetings held by the two nations during the G-20 convention seems to indicate that this conflict will not escalate any further, at least for some time.
There are a number of industry initiatives across the world to explore further public-private partnerships to provide ultimate backstop for systemic losses. Clearly there is a limit to the size of losses that private insurance capital can cover, and it is worth exploring whether an explicit public-private backstop along similar lines to Pool and Flood Re in the UK is one way of mitigating the risk of a shock to supply of insurance. But we should be mindful of the risk of moral hazard and of crowding out private capital. To return to the example of cyber risk, the industry is now able to provide explicit cyber cover for those aspects of the risk that are insurable such as recoverability, physical damage and the cost of notification of lost records. And we know there is appetite in the market to keep the insurance business model relevant and seek out alternative sources of profit by underwriting new risks. As investors in longer-term, illiquid assets, insurance companies are well suited to support the UK’s economic recovery As this audience will be well aware, the industry’s contribution to the economy goes further than transfer and pooling of physical and financial risk.

And we should expect the aggregate impact of individual firms’ decisions in a sector that at the end of 2019 held assets in the region of £ trillion – a figure broadly equivalent to UK GDP in the same year – to be an important influence on speed of recovery and adaptation. But what does the insurance sector do for the economy? If I asked the person on the street about the role of insurance, I’d expect them – once they’d raised the common complaint about insurers putting premiums up every year and telling a story about a particular claim – to speak about the protection it provides to households and businesses against the financial costs resulting  2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  from the occurrence of various risks to their physical property, health, loss of earning power or other unexpected losses. (Though maybe not using quite those words!.) This is a very important function. Efficient transfer and pooling of risk reduces aggregate risk and by freeing individuals from risk allows them to avoid reducing consumption in favour of excess saving. And it allows businesses to put capital to work in their areas of expertise and opportunity, without having to worry about – or reserve for – risks that they are not equipped to manage or diversify, and so will not be adequately rewarded for. It has particularly high value in current circumstances. Excess saving, reduced consumption, and heightened risk aversion would be detrimental to economic recovery.