samchain/econo-pairs-v1 huggingface dataset:
Kristina Persson: Monetary policy and labour supply Speech by Ms Kristina Persson, Deputy Governor of Sveriges Riksbank, at a meeting arranged by the municipality of Örebro, Örebro castle, 2 April 2003. *  *  *  Thank you for the invitation to participate in this conference and for the opportunity to inform you about current monetary policy and the Riksbank’s objectives. I shall also take up one of the major challenges facing the Swedish economy over the coming years, namely labour supply and what consequences this may have for future growth and welfare in Sweden. Monetary policy focuses on inflation The monetary policy objectives are clearly stated in the Sveriges Riksbank Act - to maintain price stability and to promote a safe and efficient payment system. The Riksbank has specified the first of these objectives in an inflation target. The annual rate of change in consumer prices shall be 2 per cent, with a tolerated deviation interval of ± 1 percentage point. Monetary policy is normally directed at fulfilling this target one to two years ahead. To achieve our objective, we therefore make forecasts of price trends. If the forecasts indicate that inflation will be higher than the target level one to two years ahead, monetary policy must normally be tightened and the interest rate raised. The reverse applies if the forecast shows a lower inflation rate than the target level.

The stronger the increase in demand in relation to potential production, the greater the risk of prices and wage rising too fast, and vice versa. We must therefore analyse the entire economic outlook, despite the fact that inflation is our target variable. However, the Riksbank cannot affect potential production, i.e. how quickly the economy can grow without causing inflation. This is what structural policy can do. Structural reforms can promote both investments and labour supply and thereby have a favourable effect on the long-term growth capacity of the economy. A good structural policy can, for instance, contribute to a larger number of persons in various age groups choosing to work instead of remaining outside of the labour force. By improving the conditions for wage formation and price-setting, structural reforms can also contribute to increasing the economy’s capacity to adapt to different types of shock. Structural policy can thus be seen as a complement to monetary policy. The better the long-term growth capacity of the economy, the more  1  See the monetary policy memorandum “The Riksbank’s inflation target - clarification and assessment”, 4 February 1999, Reference no. 1999-00351 DIR. BIS Review 17/2003  1  quickly the actual growth rate can be without inflationary pressure arising, which would mean that the Riksbank had to react by raising the repo rate. Structural reforms are thus important from a welfare perspective. A high growth rate in the long term increases the possibility to pay high wages, extend welfare or invest more in infrastructure and education.
I hope that you all continue your focus on these issues and do your part to support a resilient global, wholesale FX market. I encourage you to adopt the Code as a benchmark for your firm’s activities in the wholesale FX market and use the Statement of Commitment to demonstrate that adoption to your fellow participants. As we state in the foreword of the Code, the goal is an FX market that is a “robust, fair, liquid, open and appropriately transparent market in which a diverse set of Market Participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive process that reflect available market information and in a manner that conforms to acceptable standards of behaviour.” Many thanks for your time and continued active engagement. 1 The FX Global Code is available at www.globalfxc.org/index.htm. 2 For more information about the FXWG see: www.bis.org/about/factmktc/fxwg.htm. 3 2015 FX Week USA speech available at: www.newyorkfed.org/newsevents/speeches/2015/pot150714. 6/6  BIS central bankers' speeches

Spain ranks above EU averages in 4 out of 5 of these indicators. In particular, Spain ranks 4th in the digital public services which focuses particularly on e-Government and e-Health services. In sharp contrast, Spain ranks in 17th position in the Human Capital dimension, which measures the skills needed to take advantage of the possibilities offered by digital technologies. All in all, these figures suggest that there is room to improve the global position of Spain in terms of both innovation activities and digitalisation, especially as regards human capital. This is especially relevant for the Spanish economy, which show low levels of firm productivity in comparison with their European peers. Let me conclude by saying that I am sure that the presentations in this conference will be the basis of fruitful discussions on key aspects of digitalisation and investment in intangible assets in Spain, such as its evolution and drivers, the existence of barriers and the best way to support those activities. These discussions will be very useful to enrich the policy debate  10  Eurostat (2019): Statistics on research and development COTEC (2019): Informe COTEC. Innovación en España 12 Eurostat (2019): Statistics on research and development 13 European Commission (2019): The Digital Economy and Society Index 2019 11  5/6  around these highly relevant issues. With this expectation, I wish you a very pleasant and constructive conference. Thank you for your attention. 6/6
Headway is most visible in our improved competitiveness, and more incipient in the recomposition of the contribution of domestic demand to activity, or in the reallocation of productive and financial resources towards industries with higher growth potential. The Spanish economy grew slightly in the third quarter – the first rise in output since the opening quarter of 2011 – amid a somewhat more favourable external setting, and with financial tensions lifting and confidence indicators improving. As in the rest of the euro area, the coming quarters will foreseeably see a prolongation of the path of gradual recovery, which is expected in its initial phases to continue to be driven by the external sector. In recent quarters, net external demand has played a key role in sustaining activity, owing to the sound export performance, the weakness of imports and the highly favourable tourism figures. Moreover, the decline in private domestic demand is being checked as a result of the rise in investment in equipment and of the stabilising of private consumption. The adjustment in competitiveness, in its various different strands, is playing a central role. In Spain, this has been done through what is known as “internal devaluation”, the direct containment of costs and margins, not through the nominal depreciation mechanism, which  BIS central bankers’ speeches  3  was the normal device prior to our joining the monetary union. Internal devaluation is, evidently, more complicated and slower than nominal depreciation; but, in turn, the gains to be had are more durable.

The net percentages for the questions related to the factors are defined as the difference between the percentage of banks reporting that the given factor contributed to a tightening and to an easing.
One source of concern for both the United States and the world as a whole is the large deficits in the US economy. In the third quarter last year the current account deficit totalled USD 165 billion, or around 6 per cent of GDP. Data for November show that the deficit has continued to grow, reaching a new record high of just over USD 60 billion. This may result in changes in interest rates and exchange rates that could have considerable consequences for world trade. A large share, or about 40 per cent, of Sweden’s exports go to the euro area, and as a result economic developments there are especially important for us. The recovery in the euro area economy is going slowly. Growth in the third quarter was lower than expected. Available indicators for the fourth quarter provide a mixed picture. Germany, which is an important market for Swedish products, is showing some signs of an improvement. After several years of extensive cutbacks there should be a pent-up need among firms to invest. At the same time exports are being dampened by the euro’s rise against mainly the dollar. BIS Review 10/2005  1  The economic situation in Sweden As regards Sweden the Riksbank has been positive in the past year in its outlook on economic developments. International demand has increased faster than anticipated, with above all exports of services proving unexpectedly robust. Economic policy is also contributing to the relatively bright growth prospects.

Fast growth means increasing prosperity, which in turn may result in a stable social and political climate. However, in order for China to switch from export-led to domestic demand at a quicker pace – which has to happen in the future – it will require institutional and other reforms that take time to implement. The financial infrastructure in particular is in great need of change and development. Where will demand come from when the economy is tightened in the US? The weak growth in Europe and the uncertainty surrounding developments in the Japanese economy means that there is no obvious candidate to take the United States’ place as growth engine. While China has recently become the world’s third biggest trading nation it can hardly assume the mantle on its own. Domestic demand in Europe needs to pick up but the current upswing here is sluggish and is being restrained by efforts to tackle public finance deficits in countries such as Germany, Italy and France. So how likely is it that China will abandon its fixed rate with the dollar in the period ahead? Most commentators believe that China will take a gradual, slow and cautious road towards a floating exchange rate. Should the dollar continue to weaken, therefore, the euro will continue to bear a large part of the adjustment in the future as well, thus having an adverse effect on European competitiveness and growth. 2  BIS Review 10/2005  Another important growth factor is how interest rates develop in the period ahead.
But let’s look at these four banking systems for a moment, – Canada, Australia, Hong Kong and Singapore. They share two characteristics in common. (i) They are anchored by a handful of banks with a significant share of the domestic market. (ii) These “anchor” banks are closely supervised and regulated. Several economies, including some in emerging countries, which had completely opened up their banking systems and left themselves without local anchors, have now found themselves to be vulnerable. Banking systems need strong anchor players, who are well regulated and diligently supervised, and are able to take the long-view, enabling their interests to be closely aligned with that of the economy. In a crisis too, strong anchor banks may be needed to acquire distressed financial institutions whose failure could otherwise have a systemic impact. But having anchors with a substantial share of the domestic market is not sufficient to ensure resilience. Without adequate competition, they will earn what the economists call oligopolistic rent, rather than serve the needs of an economy by innovating and introducing efficient services. Anchor banks have to be competitive. This is why we have progressively opened up Singapore’s domestic banking sector since 1999. We have allowed greater competition, particularly in wholesale banking where local players are not protected, and increasingly in retail banking too. It has involved some risks. We took a risk. But the result is now widely acknowledged to be stronger and more dynamic local banks, with much improved systems of management, risk controls, technology and expertise.

Second, stress testing could be used to profile the size of the skews from climate change to the returns of various businesses. 30 This is another area where insurers are at the cutting edge. Your capital requirements are based on evaluating the impact of severe but plausible scenarios. You peer into the future, building your defences against a world where extreme events become the norm. This stress-testing technology is well-suited to analysing tail risks likely to grow fatter with time, casting light on the future implications of environmental exposures embedded in a wide range of firms and investments. Stress testing, built off better disclosure and a price corridor, could act as a time machine, shining a light not just on today’s risks, but on those that may otherwise lurk in the darkness for years to come. Conclusion Our societies face a series of profound environmental and social challenges. The combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longerterm prosperity. While there is still time to act, the window of opportunity is finite and shrinking. 31 Others will need to learn from Lloyd’s example in combining data, technology and expert judgment to measure and manage risks. The December meetings in Paris will work towards plans to curb carbon emissions and encourage the funding of new technologies.
BIS Review 116/2006  5  While demand has not been growing unusually slowly over the past year, it is now two and a half years since it grew at a rate significantly above its longterm average. And that average could be an underestimate of how fast we could safely grow. Even so, there is a risk that a temporary rise in the inflation rate will spark off inflationary pay increases. And if that were to happen, the MPC would need to raise interest rates to restrain demand and bring inflation back to target. I thought this risk looked quite significant in August when – as the Governor said at the time – the Committee saw a 50/50 risk that consumer price inflation would rise above 3% this winter. At the same time, the latest figures were confirming that the economy had recovered its momentum. So it seemed prudent to take back the modest cut in interest rates which the Committee had narrowly voted for the previous August. I cannot speak for other MPC members. But for me, raising rates this summer was akin to buying insurance against the risk that a possible spike in inflation – which we could do little to avert – would cause people to revise up their expectations about future inflation, and maybe dent the credibility which the Committee had built up over the previous decade.

In the area of the SSM, these restrictions are particularly significant at the moment since, given the variety of supervisory practices and cultures in place, only adequate codifying of rules and procedures can help to ensure that banks are treated equitably, even if this means that some of the benefits, in terms of supervisory effectiveness, that an appropriate amount of discretion involve, have to be sacrificed. Clearly, as the new European supervisory regime matures, we must strive to develop a specific action framework that incorporates the best practices and that is sufficiently robust to enable its application to be adapted appropriately to each specific circumstance. Thank you for your attention. 4  BIS central bankers’ speeches
But structural factors are also playing a role: higher import volumes as a result of advanced globalisation have increased the importance of international prices relative to domestic prices, forcing domestic mark-ups to be less sensitive to the state of the domestic economy. This may imply that monetary policy has to react more aggressively to counteract shocks. So in combination, central banks may be facing a two-pronged challenge to their mandates: a situation where, due to the role of global inflation, more stimulus is needed than in the past to deliver their domestic mandates; and where, due to the falling equilibrium interest rates, their ability to deliver that stimulus is more constrained. That would certainly offer one explanation for why monetary policy has needed to stay accommodative for so long across advanced economies. This does not make monetary policy ineffective. As we have seen in the euro area, even with a low equilibrium rate central banks can still steer conditions in the wider economy by targeting directly the constellation of interest rates that matter for borrowers. But one nonetheless cannot deny that the fall in the equilibrium rate poses a challenge for central banks. This challenge for monetary policy has been recognised, with a number of innovative solutions proposed by academics. Let me mention two but also say upfront that I am not particularly convinced by any of them. One option that has been mooted is to allow nominal interest rates to go deeper into negative territory.

And there is still an urgent need for more structural reforms – 4/7  BIS central bankers' speeches  because third phase of the crisis has been, above all, structural. The third phase: the re-emergence of structural challenges This third phase – which we are still in today – has been characterised by two main challenges: low inflation and low growth. Just as in the initial phase of the crisis, these are common challenges for advanced economy central banks. But what has become increasingly clear is that the challenges today have a much stronger structural element. Low global inflation is partly a cyclical phenomenon – linked to falling energy prices and the slowdown in major emerging market economies – but it is also a result of structural changes brought about by globalisation. And the secular slowdown of global growth has brought with it declining long-term interest rates across the advanced world. To be sure, the intensity of these challenges has varied across jurisdictions. The euro area, still recovering from its double dip recession, has faced a more prolonged period of low core and headline inflation, which the ECB has reacted to by launching three new unconventional tools: a set of targeted long-term refinancing operations with in-built incentives for banks to lend, a negative interest rate policy, and an asset purchase programme encompassing public and private sector securities. These measures aim both to smooth transmission and to expand the policy stance to combat excessive disinflationary pressures.
Some have suggested as a result that Bank Rate be directed not only at meeting the inflation target but also at preventing excessive increases in debt and asset prices. Leaving to one side the feasibility of targeting the latter, the obvious question is how one can meet two objectives with one instrument. The answer of course is by accepting a trade-off between the two objectives. But why should we accept unemployment or high inflation in order to reduce  2  BIS Review 8/2009  financial imbalances? It would be more sensible to use Bank Rate for its traditional task of targeting inflation to maintain a balance between demand and supply in the economy, and to create a new instrument to limit the build up of debt. What is required is an additional policy instrument to stabilise the growth of the financial sector balance sheet. There is an active international debate as to the optimal design of such an instrument, but one way or another it must provide incentives for banks to reduce the volatility of their balance sheet. It is also clear that at the heart of the crisis was the problem identified but not solved at Bretton Woods – the need to impose symmetric obligations on countries that run persistent current account surpluses and not just on countries that run deficits. From that failure stemmed a chain of events, no one of which alone appeared to threaten stability, but which taken together led to the worst financial crisis any of us can recall.

In addition to these conventional unconventional measures there are also unconventional unconventional measures. When credit markets are dysfunctional, as some are at present, targeted purchases by the Bank of England of assets may improve liquidity in markets for those credit instruments. The objective of such purchases would be not only to boost the supply of broad money but also to increase liquidity and trading activity in the markets for those assets. A reduction in the illiquidity premium for a particular credit instrument might help to stimulate issuance by corporate borrowers and the resumption of capital market flows, thus reducing reliance on bank lending. It could also raise the values of assets that are currently under-priced because of high illiquidity premia, helping to strengthen the balance sheets of banks and other financial institutions. Yesterday the Government authorised the Bank of England to conduct such operations, financed by the issue of Treasury Bills, in order to improve the flow of credit to companies. But at some point the Monetary Policy Committee might wish to adopt these unconventional measures as an instrument of monetary policy. In conducting such operations, it is important to choose the markets in which to intervene extremely carefully. There is a fine dividing line between helping to oil the wheels in markets which are temporarily impaired, and artificially supporting markets in which there is no underlying demand.
But who could have foreseen in 1990 that we were on the brink of a golden decade that would see a boom in the IT and communications industry? And who would have imagined in 2002 that Norwegian manufacturing would experience a new wave of growth? Fortunately, there are also many examples of innovation, particularly when times have been bad. Nokia managed to make the transition from rubber boots to new technology when the Finnish economy collapsed at the beginning of the 1990s. In Norway, the Norwegian telecom system was deregulated and Telenor developed into a large international company. During the downturn at the end of the 1980s, Tandberg started developing video conferencing systems. In the industrial centres Mo i Rana, Raufoss and Kongsberg, rich technological communities emerged after the collapse of government enterprises in the 1980s. The merchants behind the grocery chains Rimi and Rema started business on a small scale during the downturn at the end of the 1970s. The furniture producer Stokke – makers of the world-famous Tripp Trapp chair for children – started operations in western Norway in the midst of the economic crisis in the 1930s. Economic policy The measures now being implemented are intended to provide a bridge until market economies generate new growth under their own steam. The authorities in many countries are now testing the boundaries of active economic policy. And some have overstepped them.

Svein Gjedrem: Economic perspectives Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the meeting of the Supervisory Council of Norges Bank, Oslo, 12 February 2009. *  *  *  Introduction The poet Øyvind Rimbereid from Stavanger – his works already awarded a place in the Norwegian literary canon 1 – has been nominated for this year’s Nordic Council Literature Prize for the collection of poems entitled Herbarium. The poem “Tulip” starts with the tulip bulb market bubble in the 1600s. A futures market for tulip bulbs had emerged in Holland when growers discovered that infecting the tulip with a virus could produce stripes and beautiful colours. In a short time, bulbs were trading at 25 times the normal value before the market collapsed. A hundred years later, a tulip bulb cost less than one per cent of the price before the collapse. 2 In the words of Rimbereid: “ The year 1635 and on pollen-yellow paper flutter tulip bulbs grown in places unknown to most. Or grown only in the signature on the bill of exchange of a seller who himself has bought a signature from a seller with money that itself exists only as a signature.” 3 Downturn in the global economy In September 2008, the turbulence in financial markets erupted into a full-blown global crisis. Just before, it had appeared that the US government rescue of the mortgage corporations Fannie Mae and Freddie Mac would calm the markets.