samchain/econo-pairs-v1 huggingface dataset:
Thus, although the financial strains on many families in the region remain severe and are very troubling to me, they do show some signs of abating slowly outside of Puerto Rico. Impact of the great recession on public schools in the region Now, I will turn to our special topic. In an important sense, schools constitute the backbone of our national and regional economy. Yet, this backbone can be vulnerable during recessions. Schools teach our citizens skills, including how to read, write, do math, create art or music and work in teams. Economists call these skills “human capital” because they are an important input that fuels a nation’s or region’s economic growth and development. In this way, schools play a key role in shaping our future. Therefore, it is essential to understand how the Great Recession has affected our ability to educate the next generations of students. Thus, today, we will examine how the recession has affected funding levels for schools in our region. As you know, there is an ongoing vigorous debate about how to most effectively organize public education and provide incentives to teachers, students and administrators. Such inquiry is key to any effort to ensure the best possible education for our citizens, but it is beyond the scope of this briefing. 3  For a more information, see “An Introduction to the FRBNY Consumer Credit Panel,” New York Fed Staff Report No. 479, November 2010. For the recent releases from the panel, see U.S. Credit Conditions.

In New Jersey, private-sector job growth was quite robust in the fourth quarter, despite a small dip in December. New York State, in contrast, slowed more in December and has seen only minimal job gains since we last met in August. 2  For more information, see Indexes of Coincident Economic Indicators on the New York Fed website. BIS central bankers’ speeches  3  Job growth in the region no longer appears to be out-performing the nation, and regional unemployment rates remain unacceptably high: at around 9 percent in both New York City and New Jersey, and close to 8 percent across New York State. Turning to New York City, the local job market, which had been quite resilient during and after the recession, has lagged recently – partly reflecting weakness in the city’s securities industry. Still, the Big Apple has recovered over half of the jobs lost during the recession, whereas the nation has recouped only about a third of its job losses thus far. Despite recent weakness in the securities industry, other industries, such as tourism, and professional and business services, have fared reasonably well in the City. Weakness in financial activities industry – and securities in particular – is worrisome because this sector has tended to drive overall local growth and provide a major source of tax revenue for the city and the state. The New York Fed also conducts the Empire State Manufacturing Survey to track conditions for regional manufacturers.
MAS’ monetary policy stance since 2010 has underpinned the gradual improvement that we are seeing in Singapore’s inflation-growth trade-off. •  MAS is committed to ensuring that recent improvements in inflation are sustained. •  The current policy stance of modest appreciation of the Singapore dollar is appropriate in containing the re-emergence of strong cost and price pressures in a restructuring economy. Strong Singapore Dollar impacts MAS profits despite good investment returns Let me now move on to MAS’ financial results. MAS made investment gains of $ billion for the FY ended March 2013. •  This is lower than the $ billion earned in the previous FY, due primarily to lower interest income as interest rates continued to decline in FY 2012/13. 2  BIS central bankers’ speeches  But MAS recorded an overall loss of $ billion after taking into account translation effects from an appreciating Singapore dollar. •  In FY 2012/13, the Singapore dollar appreciated against all major currencies  •  In particular, the Singapore dollar strengthened 5% against the Euro, 6% against the Sterling, and 14% against the Yen during FY. •  It also appreciated against traditionally strong currencies like the Aussie Dollar and the Canadian Dollar. In short, we made good investment returns, but when measured in Singapore dollars, these gains more than offset by strength of the currency. •  This is an issue of reporting currency. If we had reported our profit and loss in international currency, it would show healthy profit.

This is the main reason why MAS introduced the Total Debt Servicing Ratio (TDSR) framework. During our inspections, we picked up some worrying practices. •  4  Most of them are in property loans –  A couple with combined household income of $ was able to obtain a new housing loan of $ Their monthly installments on this new loan and their existing loan obligations came to more than 90% of their combined monthly income. –  The bank’s decision to approve the loan was based solely on fact that couple had savings deposit of $ This is not prudent. BIS central bankers’ speeches  •  •  We picked up similar instances for car loans –  Some applicants of car loans borrowed close to 100% of the value of car, with little or no down payment, for what is essentially a depreciating asset. –  This is also not prudent. We also found cases of excessive borrowing through credit cards –  A concerned mother called MAS for assistance: her 24-year old son had been paying only the minimum sum on his credit card bills and steadily chalking up debts. –  She requested MAS to stop financial institutions from issuing credit cards to those who have not been making full payment on their credit card bills. Over last three years, MAS has introduced variety of measures to contain excessive borrowing against the backdrop of highly loose monetary conditions globally.
They are the gains that we must continue to preserve. Second, the increased emphasis of monetary policy towards external stability so far has not put undue pressure on key domestic interest rates. They remain broadly accommodating. This is because of the large liquidity overhang in the banking system. I believe interest rates at the current levels are appropriate and consistent with the need to support the recovery of domestic demand, provide incentives for corporate debt restructuring, and maintain the economy’s cost competitiveness. And third, in addressing the issues of growth with stability, we must look for a proper coordination of fiscal and monetary policies. At this time, fiscal policies will have a dominant role in reviving the weaknesses in domestic demand. The Government has been cautious to balance fiscal stimulus measures within the context of longer-term fiscal sustainability. The role of monetary policy is to ensure the continuity of macroeconomic and financial stability. Ladies and gentlemen, One of the key concerns over Thailand’s long-term fiscal sustainability has been the issue of how the Government will find solutions to the remaining cost of financial restructuring. The cost, which includes the remaining uncovered losses up to now plus the contingent losses for the next three years, is currently estimated at 774 billion baht or about 17.2 billion US Dollar. On this issue, yesterday, the Thai authorities announced a plan which would constitute a comprehensive solution to this problem.

The investment-saving gap moved to surpluses averaging 10 percent of GDP in the first three years after the crisis, from the pre-crisis deficits average of 7 percent of GDP before 1997. Such magnitude of change is indicative of the depth of the adjustment Thailand had to go through. Although the initial imbalance in the lead up to the crisis was not small, the adjustment was amplified partly by the wave of contagion effect in the early years of the crisis which brought pressure on the capital account, the exchange rate, and growth. Now, while we can look back to the last two years of growth of around 4 percent, signs of fragility still abound, with important issues remaining to be resolved. This includes the continued reform of the banking sector and the resolution of the costs of financial sector restructuring. The main fragility in the recovery process at this time is the weakness in domestic demand. The problem is compounded by the slow growth in bank credit and the weak corporate balance sheets, particularly the non-export sector. Unfortunately, the current external environment does not bode well for the recovery, going forward. The global slowdown is posing strains on Thailand’s export, and is adding pressure to the current account and external stability. Official GDP forecast this year is around 2.0-2.5 percent. Given the change in external environment, this year will be more a time for consolidation than for expansion.
The effects of changes in the current account on net demand for the Norwegian krone can be illustrated by adjusting the basic balance for transfers and earnings to the Petroleum Fund and oil companies’ estimated cash surplus. Even though the current account surplus is increasing from 2003 to 2004 as a result of high oil prices, the adjusted basic balance is falling. In isolation, this is contributing to a decline in demand for the Norwegian krone. The decline is due to high import growth, which is reducing the current account surplus. In the Government’s budget proposal, the use of petroleum revenues remains virtually unchanged between 2004 and 2005. In spite of this, the krone exchange rate has appreciated recently. This reflects short-term capital inflows and may indicate that foreign exchange market operators expect that the use of petroleum revenues will increase in the years ahead. Themes in foreign exchange markets shift. In periods, investor focus on stock returns feeds through to exchange rate movements. During periods of political and economic unrest, investors may choose individual currencies as a safe haven - often the Swiss franc. In the autumn of 2002, the Norwegian krone was probably also perceived as a safe haven. In addition oil prices rose as a result of the uncertainty associated with the war in Iraq. Fluctuations between major currencies also affect the krone exchange rate. In recent weeks, investors have withdrawn from the US dollar and a number of currencies have appreciated.

Jarle Bergo: Oil prices, cyclical developments and monetary policy Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at Vest-Norsk Sparebanklag’s autumn conference, Bergen, 12 November 2004. The text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 3 November, Inflation Report 3/04 and on previous speeches. The references and the  Charts in pdf-format can also be found on the website of the Norges Bank. *  *  *  The objective of monetary policy is to safeguard the value of money in the long term. In the short and medium term, monetary policy can also contribute to stabilising production and employment. Historically, the experience of Norway and other countries is that high inflation has resulted in unstable output and employment. A fall in the price level will often occur in tandem with a downturn. The objective of low and stable inflation provides an anchor for economic agents’ expectations concerning future inflation. We have a very open economy with free capital movements. Stable inflation expectations also contribute to more stable krone exchange rate expectations. I will discuss this aspect in more detail later. Inflation targeting has proved to be particularly appropriate in very open, small and medium-sized economies such as the Norwegian economy.
Efficient macroprudential policy increases the Riksbank’s possibilities to carry out its main tasks Let me summarise by emphasising my most important message today. Monetary policy has to some extent also given consideration to the risks arising from household debt, in addition to inflation and resource utilisation. We are eager to avoid the unpleasant developments in a number of countries in recent years. At the same time, I believe that there are several macroprudential policy tools that could be more efficient than the repo rate in preventing financial imbalances. So far, there is no framework for macroprudential policy in Sweden, and this needs to be remedied as soon as possible. In my opinion, there are good reasons why the Riksbank should play a major role in macroprudential policy. We have long conducted analysis of macroprudential policy issues; moreover, there are clear points of contact between monetary policy and macroprudential policy, for instance, the fact that they affect the conditions for one another. The Financial Crisis Committee’s proposal does not provide a clear framework for macroprudential policy in Sweden, and the proposal also differs from the ESRB’s recommendation and from the practice in other EU countries. In the future, it is desirable that the Riksbank should be able to use the policy rate to an even greater extent to stabilise inflation and the real economy in the future, and that more appropriate tools than the repo rate can be used to reduce the risks of financial imbalances.

With the world economy now beginning to catch a cold from the slowdown in the US economy, the quality and competitiveness of our exports means that our companies are better equipped than others to hold their own in the global marketplace. Foreign trade not only represents Switzerland's growth driver, but it is also our friend when economic times are hard. BIS Review 45/2008  1
BIS Review 92/2008  7  Meade, E. and D. Stasavage (2008), “Publicity of Debate and the Incentive to Dissent: Evidence form the US Federal Reserve”, The Economic Journal, april, pp. 696-717. Woodford, M. (2007), “The Case for Forecast Targeting as a Monetary Policy Strategy,” Journal of Economic Perspectives, Vol. 21, No. 3-24. 8  BIS Review 92/2008

One specific concern that some have expressed about Basel II’s applicability in emerging markets is that banks with more basic risk management systems will rely on external credit ratings issued by rating agencies under Basel II’s standardised approach to credit risk. In some emerging markets, there may still be few, if any, rated companies. The Committee has been mindful of this concern. If supervisors are uncomfortable with the use of external ratings in their countries, they may opt to weight all corporate claims at 100%, while sovereigns and banks can be risk weighted according to the risk scores of export credit agencies. This eliminates the dependence on ratings issued by external credit agencies. Indeed, our discussions with colleagues and counterparts from countries outside the Committee, including India, as I mentioned, have been instrumental in addressing other concerns in the capital framework. Thanks to our consultations, we have endeavoured to address several other broad issues in the new framework, including the document’s apparent complexity and the consistency of its application internationally, which I will set out now. Complexity One inevitable by-product of designing a comprehensive three-pillar framework with a range of options for different circumstances is increased complexity. The members of the Basel Committee certainly recognise that it is far easier to enforce a simple rule than a complicated one.
That makes the economy vulnerable towards, and dependent on, this sector. In the United States, on the other hand, it is quite usual for enterprises to obtain money directly from the capital market. And not necessarily in the state in which they have their headquarters. This form of corporate financing makes the economy much less vulnerable towards any problems in the banking sector. It is, however, significantly underdeveloped in Europe. In a monetary union one should also expect a fully integrated capital market. That would mean, for example, that a creditworthy entrepreneur from Osnabrück could issue a bond without any problems in the Netherlands. Or an entrepreneur from Lisbon could do the same in France. After all, France, Portugal, the Netherlands, Germany and 15 other countries share the same currency. A truly integrated capital market would not only benefit the European economy because it would ensure an efficient and location-independent allocation of financial resources. It would also bring with it a greater distribution of risk. First, spreading risk means striving for a balanced financing mix. If Europe’s enterprises do not principally finance themselves with bank loans but also with, for example, corporate bonds, the economy can still prosper when banks are rather hesitant in their lending. Currently in Europe, however, only around 20–50% of debt financing takes place in capital markets. By comparison, in the United States it is around 80%. Now, we cannot expect to have a completely new financing mix in Europe from one day to the next.

The systematic work of our distinguished archaeologists and of the dedicated central bank employees over the years has helped in materialising the efforts for presenting the history of the Albanian currency, from the axes of the Hoard of Torovica, to the first coins struck in Dyrrhachium, to those in circulation throughout various historic periods, up to modern days. Through over 30 exhibits and 5 educational rooms in the Museum, we show interactively the ancient history of our currency. The permanent exhibition in the lower floor displays collections from monetary systems that have existed in our territories over the past two thousand years. They are part of the numismatic collection of the Bank of Albania and the Albanian Institute of Archaeology. We have selected and studied them meticulously in a close and long process of cooperation with archaeologists, numismatists, historians and ethnologists in Albania. I take this opportunity to thank them for their valuable contribution. Our Museum, however, is not just a money museum. It is also the museum of the central bank, which considers financial education as an essential objective. The public needs to be informed in order to be able to make judicious and sound financial decisions, which, in turn, contribute to financial stability. That is why we have dedicated the upper floor of the Museum to financial information and education. Through a number of activities, educational publications, lectures, films, and applications, irrespective of their age, visitors learn about financial products and system.
Looking at developing countries makes this point even stronger, since it can also apply to inventory management and other forms of common productivity shocks since the asynchronicity is much more significant. 2  BIS Review 74/2008  However, reforms regarding monetary policy have lagged noticeably in their adoption among developing economies. Central bank independence, inflation targeting and other related policy reforms have only materialized in developing economies beginning in the mid-90s which coincides with the fall in volatility in this group of countries. While structural changes, such as the increased openness, may have indeed helped economies become more stable, these changes must also include those related to monetary policy because the Great Moderation coincides with inflation control, suggesting that improved monetary policy has indeed played a major role. So, the relevant question is exactly how does monetary policy reduce the volatility of both output and inflation. We know that there is a tradeoff between output volatility and inflation variability, and monetary policy attempts to manage this tradeoff optimally. Policymakers have to decide how to reduce inflation to reach their goal. If they react forcefully to any inflation deviation, the outcome will be low inflation volatility, but large output volatility. Thus, in the long run, there is a tradeoff between inflation volatility and output volatility, although inflation has no effects on the full employment level of output. It is also possible to practice inefficient monetary policy, one which lags behind the output/inflation volatility frontier, making both of these inefficiently large.

The empirical evidence on this subject is mixed, but generally it has been found that inflation targeting does lower inflation and reduce its volatility. 5 There is some evidence for emerging economies that inflation targeting also reduces growth volatility (Gonçalves and Salles, 2008). Bad luck is back: the risks of inflation Recently, the world has faced one of the worst inflationary shocks in the last 60 years. First, it happened with oil prices, which started rising sharply at the beginning of the decade, and has climbed to record-high levels (figure 4). However, even with this shock, inflation and output have been much less volatile than in previous oil price cycles. Lower oil-dependence and countercyclical fiscal policy explain part of the milder effects. Better monetary policy has also contributed to substantially reduce the impact of oil shocks on output and activity. 6 However, the price of oil has kept increasing, and although its effects are smaller than in the past, the shock is becoming so large and persistent that it may have noticeable effects on inflation and output over the coming quarters. On the bright side, however, the better monetary policy frameworks that are used today limit these effects. On the other hand, more recently, we have seen an impressive increase in food prices (figure 5), with serious inflationary effects in many countries. Food prices have reached in some cases their highest levels in history.