samchain/econo-pairs-v1 huggingface dataset:
In short, the efforts of banks over the past seven years to rebuild their balance sheets and improve risk management are paying off. Mortgage rates are at all-time lows. Corporate credit availability has recovered solidly. Lending to small firms is growing again having fallen sharply in the wake of the crisis (Chart 1). Chart 1: Corporate credit growth as a whole recovering and SME credit growth positive(a) 2.0 1.0 0.0 -1.0  Large(c)  -2.0  Total  -3.0  Per cent  SMEs(b)  -4.0 -5.0 -6.0 -7.0 Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct 12 12 12 12 12 13 13 13 13 13 13 14 14 14 14 14 14 15 15 15 15 15 Notes: (a) Rate of growth in the stock of lending on previous year. Lending by UK MFIs. Data cover lending in both sterling and foreign currency, expressed in sterling. Not seasonally adjusted. (b) SMEs are those businesses with annual debit account turnover on the main business account less than £ million. (c) Large businesses are those with annual debit account turnover on the main business account over £ million. 1  The test was tough. In the scenario, gilt yields falls over 100 basis points, Bank Rate falls to zero, unemployment increases by 3 ½ percentage points, and house prices fall by one fifth. Equity prices fall sharply – by around twice their recent falls.

Growth in output per worker has been around 1% recently and is likely to have fallen a little further towards the end of 2015.18 The result is that the levelling off in pay growth has had smaller implications for unit cost growth. In the third quarter of 2015, these grew at around 1½ to 2% on a range of measures, and seem likely to grow at rates a touch below what we expected in August.19 Stepping back, there is little indication of accelerating unit costs we had expected. And certainly, given the scale of foreign disinflationary pressures, current domestic cost growth is not yet consistent with a firming in underlying inflation. This brings me to the final set of factors, core inflation measures. Core inflation measures Around one third of the inflation basket is accounted for by non-energy imported goods whose prices depend on their world prices and the sterling exchange rate. Measures of core inflation, which strip out the direct impact of volatile CPI items like energy and food prices, help to give a read on how developments in these variables combine with domestic cost pressures to drive underlying inflation trends. They also tend to give a sense of headline inflation once the effects from volatile items drop out of the annual comparison.20 Put differently, total CPI is more likely to move towards core than the reverse, suggesting, as a rule of thumb, that inflation is likely to pick up but not to overshoot core CPI a year ahead. 17  See Annex.
It is likely that a number of markets contain elements of a speculative bubble, where price developments bear no relation to the fundamental factors that normally affect supply and demand and instead are driven by expectations of future price increases. Commercial property prices in Sweden at the beginning of the 1990s gave us a clear example of how such a market works. In Sweden we don’t see any indications that speculation is of any great significance for the formation of housing prices. I think there’s reason to wonder whether such imbalances really can arise in the Swedish market. Swedish people live in their houses or apartments. Perhaps the Swedish tax system, both as regards property tax and tax on rental income, has made it unprofitable for households to buy to let. Australia, for example, has considerably more favourable tax rules. So, to sum up, it seems that both housing prices and household borrowing in Sweden are fairly well explained by the fundamental factors that usually govern supply and demand. This doesn’t mean of course that prices cannot fall; far from it. Uncertainty about income developments and rising interest rates could, for example, curb demand at the same time as the supply increases when the construction of new homes picks up. In that case we should expect weaker price increases or even a drop in prices. But the prices shouldn’t fall as much or as fast as when demand contains obvious elements of speculation.

The forecast for 2004-2006 is that of the National Board of Housing, Building and Planning . Household indebtedness Per cent 160  16  120  12  80  8  40  4  0 1980  0 1982  1984  1986  1988  1990  1992  Debt to income ratio (LHS)  1994  1996  1998  2000  2002  Post-tax interest ratio (RHS)  Sources: Statistics Sweden and the Riksbank  Households’ real and financial assets 45  5000 Real assets (Billion SEK, LHS) Financial assets (Billion SEK, LHS)  4000  40  Debt as percentage of total assets (RHS)  3000  35  2000  30  1000  25  20  0 1988  1990  1992  1997  1999  2001  2003  2004 kv2  Sources: Statistics Sweden and the Riksbank. BIS Review 67/2004  5  The major banks’ profits SEK billion, prices in 2004  Profit before loan losses  dec-04  0 dec-02  0 dec-00  30  dec-98  30  dec-96  60  dec-94  60  dec-92  90  dec-90  90  Loan losses, net  Sources: The banks’ reports and the Riksbank. 6  BIS Review 67/2004
To provide a longer-term response to stable economic development, public authorities should speed up to design and implement stronger development policies, which in the medium run enable establishment of a better equilibrium in the contribution of various sectors to economic growth, which raise competitiveness of our economy and make it more formal. To find better development equilibriums even in the financial system, it would be necessary to draft policies that would promote a faster development of the non-bank financial sector and would support creation of capital and debt markets for private entities. Accomplishment of these objectives would preliminarily require strengthening of financial reporting standards; completion, accuracy and improvement of law-enforcement in terms of business relations development; as well as a better protection of creditors’ and consumers’ rights of financial institutions and products. In practical terms, these measures would expand financing resources for economic development, thus relatively decreasing its dependence on the banking sector. Also, public authorities should, through a close cooperation among them, review and improve the framework of measures for efficiently withstanding the extraordinary financial situations, being ready to engage the necessary financial, human and technological resources and carry out necessary legal and regulatory changes. Dear heads of the Albanian banking system, The events we have experienced in these 12 months make us believe that prior-to-crisis economic and financial balances are likely to shift to a new equilibrium.

And yet, even in this blessed state, there are too many unemployed and underemployed, just as there are in the rest of America. We can do better. America must do better. The question is: How? To create employment, we must have economic growth. The simplest of econometric equations posits that the key components of economic growth are domestic consumption, plus foreign demand for U.S.-produced exports, plus investment by businesses, plus spending by government. I think it is pretty clear to everyone who lives on the planet that in order to grow our economy and put our people back to work, we must rely on our ability to curry to domestic and foreign  1  The Great Recession’s end date was established by the National Bureau of Economic Research, which officially declares the beginning and end of recessions. BIS central bankers’ speeches  1  consumption and invest here at home to produce the goods and services to sell in the marketplace. You’d have to be from Mars to believe that the federal and state governments will be the source of much direct spending stimulus to the economy. Presently, all eyes are focused on the budget negotiations in Washington as the debt-ceiling clock ticks on. Aesop’s classic fable comes to mind. Rather than work like ants to build and store for difficult times, our fiscal authorities – Congress after Congress, under Republican and Democrat leadership alike, and with presidents of both parties occupying the White House – have been proverbial grasshoppers.
As Chart 11 shows, we have seen two major spikes in CPI inflation within the last two years. And it is possible that another one is in prospect when higher VAT comes into effect early next year, particularly if this is accompanied by a continuation of the recent surge in energy and commodity prices. These repeated episodes risk eroding confidence that UK policymakers remain committed to low and stable inflation, with a knock-on effect on inflation expectations in financial markets, among the business community and the public which could be self-fulfilling. In the depth of the recession in the first half of last year, we could be fairly relaxed about upward pressures on inflation. At that time, the MPC was worried about the opposite trend – a lurch into deflation with prices and wages on a downward spiral. But these deflationary fears have not been realised. Instead, inflation has run above the target and wage freezes introduced to help businesses weather the storm of the recession are coming to an end. The current period of above-target inflation risks being prolonged by monetary policy which is too lax – creating a climate in which higher inflation is not just the product of one-off shocks but becomes more deeply ingrained. 12  BIS Review 134/2010  The economy is now recovering at home and abroad. The world economy is growing above its pre-crisis trend, and domestic spending in money terms is also following the same pattern, as Chart 12 shows.

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Jarle Bergo: Nominal and financial stability in a new economic world Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), Valutaseminaret, Sanderstølen, 1 February 2008. *  *  *  Thank you for inviting me once again to this venerable institution - Valutaseminaret. It is a pleasure to be here with you. This morning I will discuss with you some issues under the broad heading of “Nominal and financial stability in a new economic world”. Introduction The general economic environment has changed dramatically over the past 30-40 years. When I started my career as an economist in the late 1960s, a belief had evolved that the economy could and should be controlled and steered in considerable detail. A widespread view was that markets should be regulated and coordinated by authorities. Furthermore, the Phillips curve was embraced as proof that a long-run trade-off between inflation and unemployment existed. By merely accepting somewhat higher inflation, it was thought possible to reduce unemployment in the medium and long term. The economic policy of the 1970s and 1980s, which was based on these views, led to high and variable inflation and wide fluctuations in the economy. In the face of the disappointing experience from this period and advances in economic theory, put forward by among others the Nobel Prize winners Phelps, Friedman, Kydland and Prescott, views have now changed. We have learned that low and stable inflation is the best contribution monetary policy can make to high and stable growth.

Zeti Akhtar Aziz: Growth and development of the world economy Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the official opening of the World Bank Group Knowledge and Research Hub in Malaysia, Sasana Kijang, Kuala Lumpur, 28 March 2016. *  *  *  It is my great honour to welcome the distinguished Senior leadership of the World Bank Group, Dr Axel van Trotsenburg, Vice President of Development Finance; and Dr Kaushik Basu, Chief Economist and Senior Vice President, to the Master Lecture on 'Shared Prosperity' by Dr Kaushik Basu. The Lecture is held in conjunction with the Official Opening of the World Bank Group Knowledge and Research Hub in Sasana Kijang later this afternoon. As we meet today, the global economy is confronted with an immensely challenging environment. A slower than anticipated growth in several major economies, the sharp decline in commodity and energy prices, the significant shifts in global liquidity, and the heightened geopolitical tensions are having far reaching and widespread implications. Going forward, the challenge for both the advanced and emerging economies is to lift growth trajectories and search for sustainable growth factors that can rebuild economic fundamentals, address structural vulnerabilities and forge new sources of growth. Key is the "sustainability" and strengthening of the growth and development of the world economy. An important aspect in this process is that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities widen.
Prospects for weaker growth and lower inflation imply a lower interest rate than presented in the interest rate projection from our previous forecast in December. There is also a risk that the global downturn will be deeper and more prolonged than expected. If this proves to be the case, growth in the Norwegian economy will not pick up as quickly and inflation will fall more sharply than we currently assume. The objective of avoiding a pronounced downturn indicates in isolation that the interest rate should be rapidly reduced to a low level. On the other hand, we have already made substantial reductions in the key policy rate. With a low interest rate, households may save less and the turnaround may occur more rapidly than we assume. This indicates in isolation that changes in the interest rate should be gradual or that further interest rate cuts should be put on hold. Overall, the outlook and balance of risks suggest that the key policy rate should be gradually reduced further to a level of around 1 per cent in the second half of 2009. This is about 1 percentage point lower than in Norges Bank’s forecast from 17 December last year. With the low interest rate added to government fiscal measures, our analysis indicates that growth in the economy will be positive from the second half of this year. Growth will be driven by a rise in private consumption as a result of a low key policy rate, growth in real wages and higher government transfers.

Oil futures prices have fallen and indicate an oil price of around USD 60 per barrel in 2010. Other commodity prices that are important for the Norwegian economy have also fallen sharply. Metal prices are particularly sensitive to cyclical developments. Futures prices for a selection of raw materials indicate unchanged or moderately rising prices in the next few years. Many countries that have been hit by the economic setback will see an improvement in their terms of trade and growth in their disposable income. The current downturn followed a period of very high global and domestic economic growth, supported by favourable trading conditions. Few countries benefited more than Norway from  1  Folketrygdfondet will manage the new Government Bond Fund. 2  The Government has increased the capital of Kommunalbanken Norway (the local government funding agency), it has increased the scope of GIEK (the central government export credit agency) and Innovation Norway, and has offered state loans to Eksportfinans Norway (the credit institution for export financing). 2  BIS Review 42/2009  the economic upturn, which drove up prices for oil, gas and other export commodities. At the same time, an increasing number of cheap consumer goods were imported from new EU countries and from Asia. Norway’s real disposable income increased by more than 40 per cent from 2002 to 2008, more than that of any other western country. But our terms of trade are now deteriorating.
Political processes are often protracted, but once a decision has been taken, results should be rapidly visible. to be available as soon as possible. By contrast, central bankers are able to take decisions very quickly, but the results of these decisions – whether good or bad – may not be evident until years later. It is precisely because this lag is often so long that the credibility of central bankers is essential. If central bankers are credible, economic entities will trust them. As a result, monetary policy is more effective. For instance, if inflation rises due to increasing commodity prices, employees will not immediately ask for higher wages because they are confident that the increase in inflation is only temporary. Thus independence is a necessary prerequisite for a central bank, in order to develop the credibility it requires for carrying out monetary policy. Mind you, independence is a necessary – but not a sufficient – prerequisite for successful monetary policy. Central bank independence in monetary policy is not a specifically Swiss achievement. In many countries it has helped to firmly establish inflation expectations in the long term. Consequently, monetary policy can react to shocks in the short-term, when necessary. However, with a view to certain characteristics of the Swiss economy, the independence of the SNB appears particularly valuable. Allow me to explain this briefly, using our experiences during the financial crisis as my example. When the extreme shock of the great financial crisis occurred in 2008–09, monetary policy was in a position to act rapidly.

At a time when we are witnessing an increase in corporate nonperforming loans, I reiterate my call for the banks to expand their provisions commensurately with this heightened credit risk. At the same time, dividend policies must be mindful of the need for higher levels of retained earnings in order to further strengthen capital buffers, also in view of the more onerous requirements of Basel III. Finally, I would encourage risk officers to go beyond simple compliance with regulations and proactively espouse prudent risk management practices and good judgement. BIS central bankers’ speeches  3  Before I hand over the floor to Professor Bannister, I would like, on this my last official meeting with the financial community, to express my sincere appreciation to you all for the cooperation and understanding I have benefited from over the past twelve years. Thank you. 4  BIS central bankers’ speeches
2  BIS Review 150/2008  blow some steam off the monetary policy, thereby tending to depreciate the exchange rate. This is precisely what the Board of the Central Bank of Chile decided to do in the face of the severe appreciation early this year, by holding the interest rate constant, while in the most likely scenario, had the appreciation not occurred, rates would have increased. There is abundant evidence that pass-through from the exchange rate to inflation is fairly small. Monetary regimes pegging the exchange rate were based on the notion that exchange rate fluctuations were transmitted to inflation on a one-to-one basis. This was the logic, for example, of pegging the exchange rate in Chile in 1979. However, the empirical evidence shows a relatively low pass-through, particularly under floating regimes where the persistence of exchange rate movements is low. Still, despite the low pass-through, the inflationary effects of very acute depreciations such as those recently experienced by most emerging economies, would not be negligible. The final impact of the exchange rate depreciation on inflation will also depend on the behavior of international prices, which have been losing strength in the face of low growth prospects around the world. With respect to monetary aggregates, some efforts have been made to bring them back to monetary policy, but as I said before, not with the intention of setting money targets, but rather because they are useful indicators of future inflationary pressures.

However, as I will discuss below, in practice the rationale for considering monetary aggregates is a little different. What variables should a central bank consider when setting the interest rate? In the regime I just described, the answer to this question is pretty simple: anything affecting inflation over a two-year horizon. Variables such as inflation expectations, wages, output, the exchange rate, commodity prices, and so on, have important effects on inflationary forecasts and must be taken into account when deciding the future path of monetary policy. There are other variables that have caught particular attention and I would like to take a brief look at them. These are the prices of assets (e.g., stocks, housing), the exchange rate and monetary aggregates. Two questions arise with regard to asset prices. One is, should they influence monetary policy decisions? And the other is, what must be done when those prices contain speculative bubbles? I will address this second question in the next section. But it must be noted that we must avoid the confusion between inflation and financial stability. Concern about asset price bubbles and distortions is at the core of financial stability analysis, but its impact on inflation is different. If stock or housing prices affect future inflation, they should be taken into account in monetary policy decisions. And this actually occurs via the effect of these prices on aggregate demand, output and, in the end, inflation. Hence, the monetary policy seems to have a stabilizing effect by leaning against the wind.