samchain/econo-pairs-v1 huggingface dataset:
But even so, this skewing would have to be very marked to have had a material impact on the quality of the capital stock.11 The capital stock is also likely to have been eroded by increased levels of capital scrapping, as some companies were forced out of business and others scaled back their operations in order to survive. Although increased levels of capital scrapping are likely to have played some role, they seem unlikely to provide the key to the productivity puzzle. In particular, although corporate liquidations have increased in the recession, that increase has been relatively contained and significantly less than we might have feared given the depth of the recession. Rather if the evidence from the business surveys is to be believed, and the growth of productive potential in the manufacturing and services sector has indeed largely stalled in recent years, this is more likely to reflect a slowing in total factor productivity (or TFP for short). I know what some of you might be thinking: this sounds like another one of those unobservable, abstract concepts so beloved by economists, but with little connection to the real world. And you would have a point! But think of it as efficiency gains. The fact that companies, as they hone their working practices and improve their internal processes, are able to increase the amount of output they produce for a given level of labour and capital input. Did the financial crisis and recession dampen the pace of efficiency gains in our economy, at least temporarily?

And as I’ve just discussed, the growing belief that the degree of spare capacity in our economy was probably less than might appear at first sight. But I also suggested that policymakers should approach their task with considerable pragmatism, and that if some of the downside risks to growth materialised, I’d reverse my vote. And that indeed is what has happened. The outlook for demand over the past few months has weakened quite materially. Consequently, at the August MPC meeting, I reversed my position and voted to maintain Bank Rate at 0.5% and the stock of asset purchases at £ billion. And as shown in the minutes published this morning, I voted the same way at this month’s MPC meeting. So what has happened to our economy over the past few months? The deterioration in the outlook largely reflects developments outside of our shores. Growth in the world economy, including in our core trading partners in Europe and the US, has slowed. Concerns about the fiscal positions of some countries, particularly within the euro area, have intensified. This in turn has fuelled worries and uncertainties about the resilience of the international banking system. And perhaps most fundamentally of all, confidence that the authorities have the ability to respond to these challenges in a decisive and timely  BIS central bankers’ speeches  7  manner has diminished. These four factors have fed on each other, leading to a pronounced downward spiral. The UK has been caught in the fallout from these external developments.
Just under a third of students 5  6  studying economics to A-level and undergraduate level in British Universities are female. Women account for 25% of all academic staff in UK economics departments, and only one in seven are professors (compared to one in three men). 7  And while ethnic minorities are over-represented among economics undergraduates (30% of students 8  identify as black or Asian compared to 10% of the whole UK population) they are still under-represented at senior management level in business and finance. At the Bank, our BAME senior representation is 6%. At undergraduate level in university, over a fifth of economics students are from privately funded schools, even though privately educated young people account for only 7% of the population. 9  This is a problem – above all, of missed opportunities for the students but also of missed opportunities for the profession. The Bank of England values diversity in our ranks for three reasons. First, it is the right thing to do; a public institution should reflect the people it serves. Second, it can build trust by reducing misperceptions that we are experts making esoteric decisions in ivory towers for the benefit of others. Third, it is well established that diversity leads to more creative thinking and reduces the risks of groupthink and bias. This last point is critical.

Almost all decisions in finance are taken under uncertainty, making it especially important that decision makers are exposed to a range of views, with open debates and perspectives that challenge the prevailing wisdom. That is one reason why our education outreach efforts are focused on improving diversity in the field, with the aim of attracting state school, BAME and female students into the subject. To reinforce this message and to complement the impact of econoME and the Bank Ambassadors, senior Bank officials and policy committee members, myself included, will visit 50 schools this year. We aim to give young people a glimpse into a life in economics and the enormous opportunities in financial services and businesses for people just like them. Perhaps a few will even be inspired to be the central bankers of the future. When I visit a school, my message is pretty simple: if someone like me, born in the Arctic and educated at state schools, can be Governor of the Bank of England, why not you? 5  Joint Council for Qualifications, 2017 GCSE and A-Level results, available at: https://www.jcq.org.uk/examinationresults/gcses/2017/gcse-full-course-results-summer-2017/gcse-full-course-results-summer-2017 6 HE student enrolments by subject of study 2016/17 available at: https://www.hesa.ac.uk/data-and-analysis/students/table-9 7 Tenreyro, S, Royal Economic Society’s Report on The Gender Balance in UK Economics Departments and Research Institutes in 2016 (published 2017). 8 HESA, Who's studying in HE? Personal characteristics available at: https://www.hesa.ac.uk/data-and-analysis/students/whos-inhe/characteristics 9 Data shared with the Bank of England from HESA. 12,675 economics students, of which 1895 were privately funded and 6850 were state funded.
The example of Germany's economic history in the 60 years since the Second World War, which may very briefly be described as 40 years of vigorous expansion and almost 20 years of sluggishness, should be food for thought when extracting all the strong and favourable aspects of decentralisation and avoiding those phenomena entailing risks to the efficient working of the economy, on which any lasting improvement in well-being ultimately hinges. Finally, another policy area to which great heed should be paid when seeking to sustain healthy public finances in the medium and long run is that of Social Security. Admittedly, the forecasts available denote a lack of major problems in the Social Security system in the coming years; however, looking further ahead, it is clear that if changes are not made, the system may become a considerable deadweight holding back growth in the Spanish economy. When the long-term consequences are taken properly into account, it is fairly clear that the sooner Social Security reform begins, the less costly it will be. Or stated the other way round, if Social Security reform continues to be delayed, we may find ourselves faced with a truly dangerous dilemma: either changes are undertaken that will have to be more drastic and may be traumatic in some respect, or otherwise growth in the Spanish economy will be seriously impaired. In sum, on viewing recent developments in the Spanish economy we can draw a positive assessment that should not disregard the accompanying imbalances.

The merits of such interventions need to be judged on a case-by-case basis. For tonight’s discussion I just want to argue that such decisions should be undertaken with the support of the democratic political system and should be implemented as a fiscal operation. Indeed, during this crisis, the UK Government has made a number of such interventions – such as the Enterprise Finance Guarantee Scheme and the Vehicle Discount or “Scrappage” Scheme. The Special Liquidity Scheme Now, as an aside, some keen watchers of central banks may want to argue that the Bank of England’s Special Liquidity Scheme (SLS) appears to have provided £ funding for the UK banking sector. The SLS, supported by a Government indemnity, was probably the single most generous liquidity support scheme introduced by a central bank during the crisis. 4 Its  2  In the past, when financial markets were less well developed, the Bank of England has played a part in selected industrial or financial market interventions (see Sayers, 1976), but that is not a role we have now. 3  The Bank of England issues banknotes of course, but these are monetary liabilities or “central bank money” which impact on the monetary stance. They are backed only by the highest quality assets, in order to maintain confidence in the integrity of the currency. 4  This was required given the relatively small capital base of the Bank of England – around £ ½ bn at end-Feb 2009.
Under inflation targeting, the emphasis is given to maintaining core inflation within the target range and, at the same time, achieving a balanced growth path. We use the 1-day repurchase rate as a policy instrument to keep the quarterly average of core inflation within the target range of 0-3.5 percent. If inflationary pressure heightens and thereby increases the possibility of core inflation breaching the target, interest rate has to be raised. Bearing in mind that a time lag of 4-8 quarters before a change in the policy rate can be fully transmitted to the rest of the economy, policy consideration needs to be forward-looking. Upward inflationary pressure over the past few years, due to higher oil prices, has been tamed by monetary tightening. We raised the policy rate 13 times between August 2004 and June 2006, bringing the policy rate to 5.00 percent from 1.25 percent per annum. Hikes in the policy rate have brought the money market and commercial bank interest rates higher over the past 2 years. Our policy response proved timely, with inflation and its second round effects well contained. Recently, domestic demand, particularly in private consumption and investment, showed signs of a slowdown, while economic momentum from exports was expected to moderate, given the prospects of the global economy in 2007. Since inflationary pressures have subsided in line with easing energy prices, monetary policy could be eased in support of a further expansion of the economy.

It can be very painful for both the economy and society to correct entrenched inflation – as I learned when I left this university in the mid-1970s – or indeed entrenched deflation. But monetary policy works through many channels in the economy. It affects borrowers and savers. It affects wealth – the value of houses and financial assets. It affects jobs and pay. And the impacts on individuals can be difficult to disentangle. Low rates, for example, can increase housing wealth and the value of pension investments while reducing the return on savings accounts. And to the extent that by smoothing the volatility of output monetary policy can prevent the adjustment to economic shocks leading to more persistent damage to the economy, it can prevent longer lasting loss of jobs and loss of pension values. A pension, after all, is in the final analysis a claim on the future economy – it is an investment, public or private, that has to be paid out of future revenues, dividends, capital values and taxes. However, these effects can be felt more powerfully when policy rates are at what appear to be very high or very low absolute levels. We are of course explicitly mandated to make difficult trade-offs. Most notably, when inflation is off track, they have to balance the speed with which it is brought back to target against the impact on growth.
Christian Noyer: Central banks in the financial crisis – a European perspective Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Bank of Korea International Conference, Seoul, 1 June 2010. *  *  *  Introduction Ladies and gentlemen, It’s a great pleasure for me to address such a distinguished audience. First, let me thank the organizers of the conference for giving me the opportunity to open this second day of the conference. Yesterday’s contributions have been outstanding and, in view of our program I have very high expectations for our discussions of today. From the outset, Central Banks have been major actors in fighting the financial crisis. Overall their actions have been broadly successful. In the period to come, however, steering the economy may prove more challenging and new risks can weigh negatively on the recovery underway. A case in point is the brutal reassessment of sovereign risks by market participants. The euro-area has been at the epicentre of this phenomenon. Some market segments have become dysfunctional to a point that jeopardized the transmission of monetary policy. The Eurosystem has therefore resorted to new steps to contain those tensions and prevent their spill over to the real economy. The sovereign debt turmoil is the most recent episode of a crisis that started already more than two years ago.

BIS Review 76/2010  5
These new figures represent a substantial upward revision compared with the June projection exercise – of 1.3 percentage points (pp), 2 pp and 0.2 pp, respectively-. Furthermore, economic activity in the euro area is expected to slow down notably in the coming quarters. This moderation will reflect the loss of purchasing power resulting from higher-than-expected inflation, the deterioration of consumer and business confidence and high uncertainty, the energy crisis and geopolitical risks, weakening global demand, and tighter financial conditions as a result of monetary policy normalisation, as well as the dissipation of the impact of the reopening following the lifting of Covid restrictions. Indeed, qualitative indicators -such as the Purchasing Managers’ Index (PMI) or the business and consumer surveys conducted by the European Commission- show a marked moderation of activity across the main economies in both manufacturing and services in the third quarter. Meanwhile, although supply bottlenecks are easing, activity in some manufacturing sectors is still limited. These various factors behind the increase in inflation have affected European citizens in different ways. First, the rising price of energy commodities has had a direct impact on the more vulnerable households through the increase in energy bills (electricity, gas and petrol). Second, this has had an indirect effect through the rise in prices of the products whose production costs are most affected by the price of energy, such as food. In this context, European governments have adopted fiscal and other types of measures to offset the impact of inflation.

On one hand, because of higher exposure both to those sectors more closely linked to the business cycle and to individual debtors who, faced with a deterioration of macroeconomic conditions could be severely affected. On the other hand, because of the higher relative growth of rollover consumer credit (i.e., credit cards and credit lines). This, because of the possible underestimation of the risk that these products may cause, as they allow for sharp increases in borrowing that may affect repayment ability without a timely reflection in the borrower’s payment behavior. Finally, and as has been noted before, the greater reliance of some midsized banks to wholesale funding makes them more vulnerable to episodes of greater difficulties in bank lending. As already noted, the present scenario depicts significant risks that call for policy responses in different directions. The MPR is within the range of values considered neutral. However, from the policy makers’ perspective, the task of dealing with the challenges posed by this type of risks goes beyond the scope of monetary policy, and requires the concurrence and coordination of a broader set of macroeconomic and financial policies. Actually, some of these risks (e.g., those relating to the current account deficit and the just mentioned real estate sector) can be observed even in a situation where inflation remains bounded and in line with the target. At the international level, we have seen growing interest in the use of macroprudential measures.
Risks in the euro area – focus on Greece and Spain The concern on the financial markets stemmed of course from the public finance situation and problems in the banking sector in the euro area. Concerns increased during the spring, mainly due to developments in Greece and Spain. The situation following the parliamentary election in Greece in May fuelled speculations of an EMU exit. After a new election in mid-June, the political parties that support the savings programme managed to form a new government. However, it was still uncertain whether the new government would be able to implement adequate measures. At the same time, Spain continued to have problems with its public finances and yields on their government bonds rose. The problems in the Spanish banking sector also became more acute. In June, the Eurogroup promised to provide loans of up to EUR 100 billion to enable the Spanish banks to increase their capital adequacy, and the Spanish government formally applied for  BIS central bankers’ speeches  1  assistance. Increased concern over the situation in Spain also meant that Italy and the country’s large sovereign debt attracted greater attention. At the end of June, just before our monetary policy meeting, the European Council decided on a number of measures to stabilise the situation in the euro area in the short term. The focus was on how the EFSF funding programme and later the ESM can be used.

In July, CPI inflation increased by 0.7 per cent compared with July last year, and CPIF inflation increased by 0.8 per cent. This was completely in line with our forecasts and with market expectations. Information on developments in the real economy during the third quarter is so far limited to the business and consumer tendency surveys for July and to the purchasing managers’ index for July. The National Institute of Economic  BIS central bankers’ speeches  5  Research’s economic tendency survey fell in July and is at a level indicating that growth in the economy is weaker than normal. The confidence indicator for households did rise compared with June, and then to a level just above the historical average. Another bright spot was that the indicator for the manufacturing industry rose. This is in line with the indications from thepurchasing managers’ index for the manufacturing industry, which also rose in July. However, one must exercise caution in drawing conclusions on the basis of changes in individual months. Appreciation of the krona during the summer Another significant factor this summer has been the large appreciation of the krona in relation to the euro. This, together with the fact that the krona has increased in value against other currencies, too, means that it has appreciated in trade-weighted terms this summer. Our forecast in July was that the krona would strengthen, given the relatively good economic developments in Sweden and given our robust public finances.
As illustrated on the slide, in December, the weighted average of the reserve requirement ratios were remarkably raised by differentiating the ratios such that they are lower for longer maturities (Table 1). Moreover, the reserve requirement base has been expanded to include funds received by banks through repurchase agreement (repo) transactions from foreign and domestic customers, except for those funds received from repo transactions with the Central Bank and those among domestic banks. Finally, with the decision we made yesterday, TL reserve requirement ratios were re-increased for the short-term deposit/participation fund and other liabilities. Hence, the weighted average reserve requirement ratio calculated by taking the share of liabilities into consideration has increased by 4.4 percentage points since 23 September 2010. At this point, I would like to inform you about our evaluations regarding the effects of our recent decisions. The change in required reserves is expected to affect the credit market through cost and liquidity channels. With the said regulations, nearly a total of TL 22.5 billion a will have been withdrawn from the market. According to the recent data, this amount equals to approximately 5.8 percent of TL-denominated credits excluding financial sector. We believe that the monetary tightening implemented by increasing in the weighted average of reserve requirement ratios would more than offset the expansionary effects of the interest rate reductions. Therefore, we expect that the net impact of the monetary policy decisions we have taken recently will be tightening.

This involved several key financial education initiatives for students and households in Malaysia, including the School Adoption Programme that was supported by the Ministry of Education and the financial industry. More recently, it has progressed to the integration of financial education into the school curriculum. This has been made possible through the successful collaboration between Bank Negara Malaysia and the Ministry of Education. Ladies and gentlemen The compilation of caricatures in Financial LATeracy is organised according to specific money management themes while the exhibition allows visitors to experience and appreciate the fine works of Datuk Lat while highlighting key money management messages. The timeless caricatures showcased in Financial LATeracy also embodies the true essence of a multicultural Malaysia, depicting the diversity of our people, cultures and traditions. Of significance is the  BIS central bankers’ speeches  1  influence that his works have had in promoting social harmony and benevolent values that bring the diverse people of Malaysia together. Most Malaysians have grown up with his drawings. His works have touched on so many aspects of the lives of Malaysians, providing us with powerful insights into the social and political scenes of this country. The power of story telling by Datuk Lat transcends beyond the drawing of cartoons. He is among the artists who have been observers that are the most honest and critical of developments in our society.