samchain/econo-pairs-v1 huggingface dataset:
But the educational level of the consumer and above all his or her age, does have a substantial effect on the result. A 60-year old consumer will only choose a card over cash when making a purchase of, on average, SEK 179, while a 20-year old consumer would choose to pay by card for a transaction as low as SEK 60. It would appear that young people’s choice is fairly close to a cost-efficient choice from society’s point of view. The study is based on data from 2002, but there is nothing to indicate that consumers’ methods of payment have changed radically since then, although cards have continued to grow in importance. Use of cash is still at a high level in Sweden. The cost of cash management has probably risen more than the cost of card management, calculated per transaction. The costs for increasing security for cash-in-transit and ATMs have been substantial. There are many indications that the gap in socioeconomic costs between cards and cash has widened further and that the cut-off point will therefore occur at an amount lower than SEK 70. In this case, society would benefit even more from a reduction in the use of cash. Make the costs visible An important basic insight is that the costs of different types of payment exist, even if they are not visible. They affect the consumers in that goods and services become more expensive. If these choose less efficient instruments of payment to a greater extent, then the price increases will be greater.

9  The average consumer was defined was a 41-year old man with upper secondary school education and an annual income of SEK 350,000-400,000 and who lives in a two-person household. 4  BIS Review 68/2008  they charge the retail trade. 10 In the long term this would benefit us consumers in the form of lower goods and services prices. Perhaps the retail trade could also discuss charging a fee of those of us who insist on using the most expensive credit cards – that is where the hidden cost of the payment is highest. Charges on ATM withdrawals have been a hot political topic in Sweden. Should we have to pay to take out our own money from our own accounts? But isn't it time to defuse the question of ATM charges? It costs money to manage cash. And isn’t it better that we can see the costs than that we pay a hidden price in some other way at the bank or the supermarket? 10  According to an earlier study made by the Riksbank, the loss made by an average major bank in 2002 in connection with cash management was approximately equal to the profit it made on the card market. There is evidently some subsidising between the card and cash markets. See Guibourg and Segendorf (2007). BIS Review 68/2008  5
One important component of this is the German Fraunhofer institutes. These were first established in 1948 to rebuild the German corporate sector. They have now grown to total 72 in number, covering all sectors and regions across Germany. Collectively, they employ almost 25,000 people and help around 6,000-8,000 companies each year, large and small. 47  They have an annual budget of a little under 0.1% of German GDP. A second piece of infrastructure supporting German business is the so-called Steinbeis system. This was created in 1971. It is a network of technical professionals whose skills, experience and know-how can be drawn on by companies across Germany, operating through around 1,000 Steinbeis Enterprises. It currently has around 6,000 professionals in the network. Over 2,000 businesses have been founded on the back of the Steinbeis platform. A third layer of the institutional cake in Germany is the financing of companies. This itself has three layers: the Sparkassen, operating locally and largely financing local businesses; the Landesbanken, operating regionally and typically serving somewhat larger companies; and KfW, Germany’s national development bank, typically serving large companies. Often, representatives from these organisations will have a role in the governance of German businesses.

31  All speeches are available online at www.bankofengland.co.uk/speeches  31  Table 1: Growth in the firm-level productivity distribution (aggregate, by region and by sector)  Aggregate  Annualised growth in average firm-productivity between 2004 and 2014 Top 0.1% Top 1% 12% 8%  99% of firms 1%  Region North East North West Yorkshire & Humberside East Midlands West Midlands East of England London South East South West Wales Scotland  7% 6% 12% 30% 19% 16% 9% 11% 23% 0% 13%  5% 4% 3% 15% 10% 8% 8% 6% 12% 4% 7%  0% 0% -1% 1% 0% 0% 2% 1% 1% 1% 0%  Sector Manufacturing Electricity Water Construction Wholesale trade Transportation and storage Information and communication Real estate activities Professional, scientific and technical activities Administrative and support service activities Education Health Arts and entertainment Other services  12% -10% 25% 14% 4% 41% 32% 5% 9% 25% 20% 17% 9% 10%  7% -14% 8% 8% 4% 28% 18% 3% 6% 14% 13% 7% 4% 0%  -1% -13% 1% -2% 0% -1% 3% -1% 4% 4% 0% 2% -5% -5%  Sources: ONS Research Database and Bank calculations. Note: Data refer to non-financial business sector. Calculations over the ten-year period in question are only possible for firms that exist for entire decade period and sampled throughout; these are likely to be larger firms.
This insight has tremendous significance for Switzerland where, as I have attempted to show, much of the non-tradable sector of our economy remains tied up in a structural straight jacket. Eliminating this straight jacket or at least unbuttoning it would have wide-ranging positive effects on the Swiss economy. If our legislative authorities rise to that challenge, they are likely to replicate the competitionboosting effect that the forces of globalization have exerted on the external sector in the domestically oriented sectors of our economy. Higher productivity growth rates would ultimately lead to higher growth rates and thus reverse a worrying trend of declining relative growth dynamics in Switzerland in comparison with other OECD countries.11 Such productivity driven growth dynamics should lead to lower prices across a sizeable part of our economy. Obviously, this statement needs to be qualified. he Swiss economy will always remain vulnerable to developments abroad. A significant demand or supply shock to the global economy could reverse the beneficial impact on domestic prices of further domestic liberalization. For example, widespread protectionist measures rolling back the achievements of globalization or widespread geopolitical conflict and uncertainty would certainly threaten the broad achievements with regard to price stability. Nonetheless, breaking up the rigidities impeding competition in the domestically oriented sectors of our economy has every chance of rendering monetary policy not only more  10  Alan Blinder (1998): “Central Banking in Theory and Practice”. Cambridge: MIT Press.

As the time bomb of demographics continues to tick, it will become increasingly obvious that this process is not a luxury our society can contemplate. It is a necessity! 5. Monetary Implications of Globalization  Let me now return to monetary policy. I have attempted to sketch out how after the “Great Inflation of the 1970s”, global financial and economic integration boosted competition, raised productivity growth rates and ultimately helped bring about an extraordinary reduction in global inflation and along with it a reduction in output volatility. As I have mentioned earlier, there is no doubt that good central banking itself has made an important contribution. But ultimately central banks have also benefited from the process. With inflation receding, many central banks have been able to focus increasingly on what typically constitutes a subordinate element of their legislative mandate: stabilization of output. In other words, a structural decline in the rate of inflation has increased the margins of manoeuvre for central banks. This does not alter the fact that central banks have no ability to fine-tune the real economy. Moreover, an important body of academic literature suggests that monetary policy has also become more effective as markets shed regulatory impediments.10 Monetary policy is therefore not only one of the forces behind the dramatic decline of inflation since the early 1980s. Perhaps more importantly, it has been one of the main beneficiaries of the globalization process.
High uncertainty persists over the intensity of the recovery in the closing months of the year, given how the pandemic has recently evolved in Europe. The across-the-board roll-out of new containment measures to counter the health crisis might lead to a significant slowdown in the rate of growth of activity, and even to a contraction, at least in some countries or sectors. For the year as a whole, the baseline scenario of the ECB’s latest forecasts points to an 8% reduction in euro area GDP in 2020, followed by a 5% increase in 2021. The estimated contraction for this year widens to 10% in the harshest scenario (based on a greater impact of the pandemic, with more severe restrictions and a delay in any possible health-related solution), which would moreover entail a very slight recovery, of 0.5%, in 2021. As to the inflation outlook for the area, the ECB augurs a very weak increase this year, of only 0.3%, rising in 2021 to 1%, a figure nevertheless some distance off the medium-term price stability objective. 2  1.2  Recent developments in the Spanish economy  In Spain, the impact of the pandemic on economic activity has been particularly marked, and much more acute than in past recessions. GDP duly posted historical quarter-onquarter contractions in the first half of this year (5.2% in Q1 and 17.8% in Q2), essentially as a result of the rapid spread of the virus and of the measures of confinement and restriction of activity adopted to contain the pandemic.

The macroeconomic forecast underpinning the Draft Budget also appears to be considerably in line with the projections made by other analysts for these same variables in 2020, especially considering the high level of uncertainty. Thus, in the Consensus Economics Forecasts panel published in mid-October, the analyst consensus pointed to a contraction in GDP of 12.1% and a budget deficit also of 12.1% in 2020. 14  A second noteworthy aspect of the macroeconomic forecast accompanying the Draft Budget is that it expects GDP to grow by 9.8% in real terms in 2021 (10.8% in nominal terms). This is assuming that some € billion will be available from European funds in 2021 (around 2.4% of estimated GDP for 2020), with a positive impact on the rate of growth of GDP in that year of 2.6 pp. As I indicated earlier, the Banco de España’s latest projection exercise did not include the potential positive impact on activity of the funds that the European Union has made available to Member States, through the NGEU programme, to support the ongoing economic recovery and structural transformation. In consequence, in order to use the Banco de España’s projection scenarios as a benchmark for comparison, the GDP growth estimate for 2021 in the macroeconomic forecast underpinning the Draft Budget must be considered having discounted the impact of the projects financed through the NGEU programme. This gives GDP growth of 7.2% in real terms (8.1% in nominal terms).
In the economies that became large net savers, the pattern differed across countries. In some countries, including much of emerging Asia and Japan, savings has been flat or fallen somewhat, while investment has fallen by more. In China and in the major oil exporters, investment spending is rising, but not by as much as savings is increasing. Europe’s net external position has not changed much over this period, and is in rough external balance overall, with substantial differences across the member states. The second feature of this dynamic has been an increase in the willingness of the rest of the world to invest its savings in the United States. In those parts of the world where savings are high, they have become more globally mobile. And a greater share of those savings found its way to the United States. This phenomenon is due in part to the perceived attractiveness of relative returns in the United States arising from the acceleration of productivity growth here, and in part due to the dynamics associated with exchange rate regimes linked in one way or another to the dollar. Together these forces have produced larger imbalances—deficits here and surpluses abroad—that have been sustained longer and financed more easily than conventional wisdom would have thought possible a decade or even five years ago. Why does this pattern of imbalances matter and why should it concern us? It matters because of the size of the U.S. imbalance.

Meanwhile, in the words of the Socrates, the Greek philosopher, “all wars are fought for money”. We heard some good examples that illustrate this relation in last year’s conference. We heard from Prof. Picard about King Monunius, who is known thanks to the respective coin. He had it minted for the sole purpose of raising a strong army, convinced that his might rested with the army. From Prof. Egro, we learned that Mahmut Pashë Bushatlliu and Ali Pashë Tepelena tried to introduce their coins and banknotes, independently from the Ottoman Empire, not for financial purposes but as a token of rebellion or an attempt to break away from the Empire. Later on, in WW1, we see the banknotes of the Republic of Korça, which are a rare phenomenon not only in terms of numismatics, but also a materialisation of the early issues as a result of the war, after the formation of the Albanian state. During WW2, the Albanian currency underwent radical changes. On its obverse and reverse we no longer see King Zog. Instead, Victor Emanuel III is featured and the most significant change is that the Albanian franc was officially pegged to the fate of the Italian lira. We will have the opportunity to hear, during the day, other interesting and important examples in the monetary and economic history of Albania.
•  The facts therefore served as a stark reminder that self-regulation just doesn’t work, primarily because of the imperfections in certain financial markets, which are neither transparent nor efficient (like the CDS market for example) and can generate potentially huge negative externalities. Thus, regulation and supervision were once again elevated to their rightful role after the crisis – a role they should never have lost. By way of an aside, I note that the crisis was triggered in the United States by unregulated entities (conduits) or banks that weren’t applying Basel 2 requirements (investment banks which theoretically were regulated by the SEC). By contrast, French banks for example, where supervision was at times branded “intrusive”, managed on the whole to get through the different phases of the crisis relatively unscathed. ii)  What rules should apply to finance? •  Once a consensus had been reached over the need to reinforce financial regulation and supervision, the next question was naturally: what kind of regulation? •  The principle that guided the regulators, notably on the Basel Committee, was that finance should once again be made useful to the economy: that it should serve the economy rather than govern it.

Christian Noyer: The end of the financial dictatorship? Introduction by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, to Session 5 “The end of the financial dictatorship?”, Aix-en-Provence Economic Forum, Aix-en-Provence, 6 July 2013. * 1. *  *  Firstly, is finance really a dictatorship? This question isn’t new: already Petronius, in Roman times, at the start of our modern era, asked: “What use are laws when money is king?” The question seems rhetorical, and you can sense in its resignation that the Latin writer (who, incidentally, was born in the nearby city of Marseille) was already worried about the difficulties of establishing the primacy of politics over finance. i)  It is true that the world of finance does have considerable powers:  •  The power to create and support economic development. In its most traditional forms, this is finance’s most crucial role – and power: it is an essential cog in the wheel of economic activity, allocating capital, supplying credit and enabling the management of risk. More than just “the sinews of war”, it can be seen as the lifeblood flowing through our veins. •  But also a highly destructive power: it was the unchecked sophistication of finance and the excesses this caused that lay behind the 2007-2008 financial crisis, a crisis that subsequently transformed into an economic, social and political crisis.
In what follows, I wish to say a little about why an improved understanding of the economy and economic policy matters, for the general public when making everyday decisions and for the Bank of England when making policy decisions. I want to say a word, too, about what the Bank is doing to support public engagement, public understanding and thus public policy, with a focus on engaging children in schools. The Twin Deficits Economists often talk, with some trepidation, about economies which face a “Twin Deficit” problem. For example, the UK currently faces both fiscal and current account deficits running to several percentage points  1  Hawking (1988). Kumar et al (2015) show that Google searches in the US for the word ‘puppies’ far exceed searches for macroeconomic variables, such as GDP, inflation and unemployment. 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  of GDP. In economist circles, such Twin Deficits are usually the prompt for a pursing of lips, a sucking of teeth and a sharp intake of breathe. Yet economics may be facing its own “Twin Deficit” problem. These twin deficits are not unique to, but are probably more acute in, economics. With the public at large, there is an understanding deficit and a trust deficit in economics. Because a lack of trust inhibits understanding, and because a lack of understanding contaminates trust, these Twin Deficits are inextricably entwined. Starting with the understanding deficit, the most compelling evidence comes from the public themselves.

People have more important things to do in their lives than think about interest rates and bank regulation, about price and financial stability. Or at least I hope they have. Indeed, central banks would be failing in their job if people were spending too much of their lives thinking or worrying about these issues. Nonetheless, the actions of central banks are important for most people at key decision points in their lives. At those points, a trusting and understanding relationship between the central bank and the public matters. It matters for people when making good decisions. It matters for the economy when following a good course. It matters for policymakers when setting good policy. That is why everyday economics, terrible title and all, matters to the Bank of England. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Annex  Figure 1 – Study of Mathematics  Per cent of total population at each age  1%  Undergraduate level  12%  A-level  75%  GCSE  100%  Pre-GCSE  Sources: HESA, Joint Council For Qualifications, ONS and Bank Calculations Notes: As mathematics is compulsory at younger ages, we assume that the percentage of students studying it pre-GCSE is 100%. Undergraduate level includes of the professional graduate certificate in education, foundation degrees, HND/DipHE and other undergraduate qualifications. This chart does not include Scottish qualifications.
The rapid expansion in activity in these economies has inevitably put pressure on the global price of energy and other raw materials, whose supply is relatively fixed at least in the short run. That is showing up in rising inflation world wide (Chart 5). So is it right to conclude, as some have, that the path of inflation is determined abroad? Certainly commodity prices have an effect in the short run. But it is domestic monetary policy – the decisions that the Monetary Policy Committee take each month, together with the overarching framework that defines our target – that determines the path UK inflation in the medium-run. The MPC will continue to assess the balance between the risks of higher inflation from the commodity cost shock and the downside risks to output (and to inflation in the medium term) from the credit crunch. But I can assure you that we will do whatever it takes to bring inflation back to target in the medium term.

That transfer is bound to hit real wages one way or another but the more that is resisted and nominal wages are pushed up, the greater the cost is likely to be in unemployment and slower growth. We have no direct lever on public expectations. We need not just to assert our determination to bring inflation back to target but ensure that our words are credible. So, in setting interest rates we need not just to assess the balance between supply and demand pressures in the economy which will set the context for price and wage decisions in the medium term, but also ensure that our decisions are understood and seen to respond to the economic developments in inflation and output that people are experiencing. 4  BIS Review 94/2008  It is clear that with inflation rising well above target we need a period of slower growth to create a margin of spare capacity. The questions we discuss and reconsider each month are how big a margin is necessary and what level of interest rates is needed to bring it about. The Credit Crunch On the scale of the necessary output gap, for example, we need to take account of the supply effects of the doubling of oil prices and the impact of migration. On the other side we need to judge how sharp a slowdown is already in train. In deciding the necessary level of interest rates we need not just to focus on the level of Bank Rate.