samchain/econo-pairs-v1 huggingface dataset:
Mokyr, J (2011), The Enlightened Economy: Britain and the Industrial Revolution, 1700-1850, Penguin. North, D (1990), Institutions, Institutional Change and Economic Performance, Cambridge University Press. North, D (1991), ‘Institutions’, Journal of Economic Perspectives, Vol. 5, No. 1, pp. 97-112. Pinker, S (2018), Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, Allen Lane. Romer, P (1990), ‘Endogenous Technological Change’, Journal of Political Economy, Vol. 98, No. 5, Part 2, pp. S71-S102. Productivity Leadership Growth (2017), ‘How good is your business really? Raising our ambitions for business performance’, available at bethebusiness.com Rachel, L and Smith, T (2015), ‘Secular drivers of the global real interest rate’, Bank of England Staff Working Paper, No. 571. Rosling, H (2018), Factfulness: Ten Reasons We’re Wrong About the World and Why Things Are Better Than You Think, Sceptre. Schneider, P (2018), ‘The UK’s productivity puzzle is in the top tail of the distribution’, Bank Underground. 25  All speeches are available online at www.bankofengland.co.uk/speeches  25  Schumpeter, J (1942), Capitalism, Socialism and Democracy, Harper & Brothers. Schwab, K (2017), The Fourth Industrial Revolution, Portfolio Penguin. Solow, R (1956), ‘A Contribution to the Theory of Economic Growth, The Quarterly Journal of Economics, Vol. 70, No. 1, pp. 65-94. Standing, G (2017), Basic Income: And How We Can Make It Happen, Pelican. Stiglitz, J, Sen, A and Fitoussi, J-P (2009), Report by the Commission on the Measurement of Economic Performance and Social Progress. Smith, A (1776), The Wealth of Nations, W. Strahan and T. Cadell.

52 For example, Dauth, Findeisen, Südekum and Woßner (2017). 53 IMF (2017). 49  13  All speeches are available online at www.bankofengland.co.uk/speeches  13  technology than their positive longer-term effects on pay, productivity and the demand for new goods and jobs. It is the balance of these two effects, each large in gross terms, which will ultimately determine where unemployment will settle. 54  No one could say with confidence today the long-run net effect will be. What can be said with confidence is that the scale of gross displacement may be larger than ever-previously. This means that, if technological unemployment is to be avoided, positive effects on productivity, goods and jobs will also have to be commensurately larger. That has led some to argue that technological unemployment is more likely this time around. 55  Even if it is avoided, the societal costs of transition could well be larger, in terms of rising wage inequality, a falling labour share and damage to social cohesion. And if that recessionary impact of technological change on individuals and societies is sufficiently large, it could well call into question the merits of having pursued the creative course in the first place. Or that, at least, is the lesson of history. What experience since the Industrial Revolution has taught us is that this risk can be mitigated by an appropriate institutional response.
As I said in that meeting, there are challenges ahead that, together, we must address in a cooperative manner, namely creating sustainable financial inclusion and ensuring the linkage between greater financial access and improvement in wellbeing. Please allow me to offer my initial thoughts on the subject. With wellbeing as the ultimate goal of policy makers, many policy building blocks need to be woven together. Examples include policies on career development, education, macroeconomic stability and so on. While these policies do not necessarily fall under the mandates of financial regulators, efforts should be made to ensure that policy directions of all relevant institutions, government and private, are aligned. Closer to our hearts though, are policies that aim to improve the poor’s capacity to be financially included. In this regard, I believe that there must be at least three key policy ingredients, namely financial access, financial literacy and consumer protection. First, for access, there is a need to ensure that the range of basic financial services provided can address financial needs of the poor in all important aspects of their lives. For instance, we need to consider an “inclusive package” of credits, savings, transfers, and insurance that fit their livelihood. Secondly, to ensure quality of usage, we need to enhance financial literacy. With higher financial literacy, the poor could utilize the services more efficiently and productively, for example, having the ability to turn received credits into income and savings and so on.

Tarisa Watanagase: Creating sustainable financial inclusion Welcome remarks by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at 1st AFI Start-up Committee Meeting, Bangkok, 10 July 2009. *  *  *  Deputy Governor, Director-General, Dr. Hannig, Colleagues, It is a pleasure to welcome all of you to Bangkok, which for some of you, I know is a long way from home. Thank you for making such an effort to be here. I cannot tell you enough how much your presence and participation in this meeting is appreciated. Though we have work to do this morning, I hope that you will also have a chance to enjoy your stay in Bangkok, including our sight-seeing tour this afternoon. At the AFI Public Announcement back in April where President Babatz and I had a chance to address the meeting as members of our Start-up Committee, I was delighted to see the kind of positive response and enthusiasm shown by policy makers from a broad spectrum of countries. Many of whom, I learned, have decided to jump on board with us, making AFI membership grow to more than fifty countries, worldwide. This only confirms that among many agenda laid on the table in international policy forums today, financial inclusion is the one agenda that we can all agree and give our full support to.
BIS Review 71/2004  5  This was already in hand when the Chancellor of the Exchequer commissioned Chris Allsopp, a former member of the MPC, to assess how well the ONS’s provision of statistics matched the needs of policymakers. The Allsopp Report, published earlier this year, has recommended some fundamental changes to the way that key economic data are put together. These concern regional and service sector data; and the ONS’s capacity to respond to changes in the structure of the economy. First, Allsopp recommends that the national statistical system should be reoriented to produce better quality regional data. This is likely to involve, for example, establishing an ONS office in every English region – not dissimilar to the Bank’s Agency network. The ONS’s main business surveys are also to be expanded to obtain greater regional coverage. For example, the Annual Business Inquiry - a major workhorse of economic statistics, which provides detailed information on, for example, employment, production and investment – is likely to be trebled in size. Monetary policy operates at the level of the whole economy, and cannot target particular regions or countries of the UK. But to the extent that better measurement and understanding of regional activity leads to improvements in the quality of UK national statistics, as the Allsopp Report expects, this development will improve the information base on which monetary policy is founded.

Over the past ten years, revisions to services output have accounted for more than half of the average revision to GDP growth; and around four-fifths of the variance of GDP revisions can be attributed to revisions to service sector growth. Indeed, research by Bank staff has indicated that the private-sector business surveys may give a better guide to the ONS’s estimate of service sector output growth two years or more after the event than do the ONS’s own early estimates. (In contrast, the ONS’s early estimates of manufacturing output growth clearly outperform the business surveys as a guide to later estimates.) The ONS is well aware of this imbalance. In fact, it has been at the forefront of developing and improving measures of service sector output: within the OECD only the UK and Korea produce a monthly Index of Services production, the counterpart to the well-established monthly Index of Production for the industrial sector. The Allsopp Report should give further welcome impetus to this work. The third focus of the Allsopp Report is the capacity of the ONS to identify and respond to structural change in the economy. The make-up of UK economic activity is constantly changing. Fifty years ago, the manufacturing industry accounted for about one-third of UK output. The service sector made up less than one-half. Today, the corresponding shares are less than 16% for manufacturing, and over 70% for services. Responding to this sort of change is challenging.
That is hardly the case today, as the Trade Union Confederation, for example, has acknowledged. Their wage negotiations in 1997 started, in fact, from the 2 per cent inflation target. In the assessment of future inflationary pressure, monetary policy in turn must take the labour market situation into account. Wages are of major economic importance: in that the wage bill accounts for almost 70 per cent of value added, the development of wages has a large impact on costs and thus on price formation. Moreover, wage settlements are liable to influence inflation expectations. Wage tendencies are therefore one of the principal variables in any assessment of inflation. However, the difficulties in forecasting wage trends are considerable. The Riksbank does, of course, follow data on wages and unit labour costs; other important indicators include labour shortages in particular industries, wage drift, registered and total unemployment in relation to job vacancies. A central concept in this context is equilibrium unemployment, often referred to by the English acronym NAIRU—the level of unemployment that can be combined with stable inflation. Attempts to push unemployment down below the NAIRU with monetary stimuli are liable to have the sole effect  BIS Review 77/1999  4  of boosting inflation. In other words, the NAIRU is not responsive to an expansionary stabilisation policy. It depends instead on the workings of the labour market, together with demographic changes and technology. Thus, lastingly higher employment cannot be generated by continuously implementing an expansionary monetary policy.

Some comments are therefore called for. One comment concerns the formulation of the budget target. A medium-term average implies that in good years the surplus should be above 2 per cent and by most standards the coming years must be regarded as good. While the economy does admittedly still appear to have some unutilised resources, they will gradually be utilised. Maintaining a surplus above 2 per cent when activity is high means that a smaller surplus can be tolerated when activity is lower. In this way, room is created for the budget to act as an automatic stabiliser. If, instead, the surplus is held mechanically at exactly 2 per cent from year to year, fiscal policy will tend to accentuate cyclical fluctuations and exert a destabilising effect. Another comment concerns the demand effects of an easier fiscal stance in the present situation. The tax changes being discussed seem largely to be unfinanced income tax reductions for low and medium income groups. Judging from what has been indicated to date, a corresponding adjustment of public spending is not envisaged. In that case, the tax cuts would enlarge household income and raise the level of economic activity via increased consumption. That could result in increased inflationary pressure that monetary policy might need to counter. That said, I want to underscore that tax cuts may well be motivated. There are many indications that the Swedish economy would work better if taxes were lower.
Accordingly, we revised assumptions for annual percentage changes in average import prices downwards by 1.7 points for 2015 and 1.4 points for 2016. Developments in food prices show that unprocessed food prices exhibited a notable correction in the second quarter of 2015 and the contribution of food prices to inflation witnessed a significant decline. Due to the projections that this correction will continue and the effects of measures taken by related institutions will materialize, we revised the food inflation assumption for end-2015 downwards from 9 percent to 8 percent. Our medium-term projections are based on the assumption that tax adjustments and administered prices will not exceed inflation targets and be consistent with automatic pricing mechanisms. The medium-term fiscal policy stance is based on the Medium Term Program projections covering the 2015-2017 period. Accordingly, we assume that a cautious fiscal  4  BIS central bankers’ speeches  stance will be implemented and the primary expenditures to the GDP ratio will decrease gradually. 3. Inflation and the monetary policy outlook  Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Our medium-term forecasts are based on a framework that a cautious monetary policy stance will be maintained by keeping the yield curve flat until there is a significant improvement in the inflation outlook. Moreover, we envisage that the annual loan growth rate will continue to hover around the recent reasonable levels in 2015, also thanks to the macroprudential measures.

Accordingly, we expect inflation will be, with 70 percent probability, between 6.0 percent and 7.8 percent (with a mid-point of 6.9 percent) at end2015 and between 3.7 percent and 7.3 percent (with a mid-point of 5.5 percent) at end-2016. We estimate that inflation will stabilize around 5 percent in the medium term (Chart 21). In the second quarter of 2015, exchange rate movements delayed the recovery in the core inflation trend, causing the year-end inflation forecast to be raised by 0.5 point. On the other hand, the improvement in import and food prices compared to the previous Report reduced the year-end inflation forecast by 0.1 point and 0.3 point, respectively. As a result, import and food prices are estimated to offset the adverse effects of core inflation figures in the second half of the year. Accordingly, we revised the end-2015 inflation forecast, which was set as 6.8 percent in the April Inflation report, upwards by 0.1 point. We kept the end-2016 inflation forecast, which was 5.5 percent in the previous report, unchanged. Considering that the downward revision in the average oil price assumption will pull down the end-2016 inflation by around 0.1 point, this effect will be compensated for by the effect coming from the rise in inflation forecast for end-2015, so we left the end-2016 inflation forecast intact (Chart 21). We are of the opinion that base effects will continue to determine the course of inflation for the rest of 2015.
The macroeconomic projections by Eurosystem staff constitute an important input into the monetary policy decisions, because they are a way of organising a large amount of information and they help to create a consistent picture of possible future developments. However, the economic projections cannot encompass or even reflect all the complexities, conditioning factors, nuances and the multi-dimensional nature of a comprehensive assessment of the risks to price stability on which monetary policy decisions need to be based. While the information synthesised from various indicators serves as an important input into the decision-making process, the Governing Council of the ECB does not take decisions only on the basis of projections. The Governing Council’s “judgement” must eventually come into play in order to assess the likelihood of the alternative scenarios suggested by the economic analysis. This is particularly important when it is quite unclear how a certain situation will evolve, as is the case sometimes with sharp movements in asset prices. Related to this, attempts to base monetary policy decisions solely on inflation forecasts would involve significant limitations. Notably, they would entail an inefficient use of information, since every forecast, or any composite index of indicators, is based on one possible scenario and one combination of assumptions. In the end, monetary policy requires judgement on the part of the policy-maker to assess  BIS Review 67/2004  5  not only the plausibility of all possible scenarios, but also the nature of the shocks and the best policy reaction in order to deal with this uncertain environment.

A partial representation of the economic structure can only partially help in monetary policy decision-making, notably in real time. For instance, it is very difficult to find empirical models that allow for an integral view of both non-financial (‘real’) and monetary-financial phenomena. So, it may be impossible to arrive at a convincing explanation of the origin and propagation of a significant financial shock, say, on the basis of sets of equations that do not elaborate on the role of the financial sector or account for only tenuous links between that sector and the rest of the economy. Another example is provided by the many pitfalls that come with using “synthetic” indicators of inflationary pressure. The most famous of these “synthetic” indicators is the so-called “output gap”. The “output gap” can be defined as a measure of the deviation of the aggregate output of an economy from the maximum level that would be consistent with price stability. This maximum level is then the “potential output”. When current output is above potential, the pressure on the scarce resources should then translate into an increase in prices, that is, inflation. In the real world, the monetary authority constantly faces the challenge of observability and measurement. Unfortunately, we cannot “assume” to know the “potential output”. The best we can do is to try to “estimate” the output gap by using observations of many other correlated variables. We all know how imprecise and model-dependent this “estimated” measure can be.
10  Alsterlind et al. (2015) describe the signalling and portfolio balance channels in more detail. 11  12  In Sweden, the effect on rates with short maturities is probably more important than the effect on rates with long maturities. This is because most lending to household and  15 [16]  companies is done at variable interest rates. According to Statistics Sweden’s Financial Market Statistics, 73 per cent of lending to households and non-financial corporations had a remaining interest-rate fixation period of 3 months or less in February 2018. The primary purpose of repo rate forecasts has so far been to influence market rates, and periodically there have been major differences between the Riksbank’s forecasts and market expectations (see Sveriges Riksbank 2017b). 13  14  See Sveriges Riksbank (2012). 15  See Rachel and Smith (2015) and Holston et al. (2017). See, for instance, Duffie and Krishnamurthy (2016), Bernanke (2016) and Constancio (2017). 16  The Riksbank could reduce the liquidity surplus further by selling other assets, i.e. gold and foreign exchange reserves. But such a change of its asset holdings is not likely; the Riksbank has in the last decade instead enhanced its foreign exchange reserves by more than SEK 200 billion financed by loans in foreign currency. 17  18  See Greenwood et al. (2016), Constancio (2017) and Krishnamurthy (2018). This is still a simplified description of the Riksbank’s operational framework. See the references in footnote 6 for a more complete description.

6 [16]  Other arguments for a large bond holding The arguments for large bond holdings in normal circumstances that I have so far discussed seem not to be particularly relevant to the Riksbank’s monetary policy in a future normal situation. Another argument put forward by some is that a large bond holding, and thereby a larger liquidity surplus in the economy, may strengthen the monetary policy transmission mechanism. 16 The arguments basically say that a liquidity surplus – when the banking system has plenty of central bank reserves – can mitigate the risk of frictions on the money market. During the financial crisis, the interbank market functioned poorly, causing market rates to become more volatile and making it more difficult for financial institutions with no direct access to central bank facilities to get access to liquidity. With a large liquidity surplus, the economy becomes less dependent on a well-functioning interbank market. Regardless of the soundness of these arguments, they have no implications for the Riksbank’s bond holdings. The fact is that the liquidity surplus in Sweden will, in all likelihood, be large irrespective of how the bond portfolio develops in the future. We already had a structural liquidity surplus in the economy before the Riksbank began its bond purchases in 2015, and the surplus has increased since then as a result of reduced cash use and the Riksbank’s dividend payments. The Riksbank’s bond holdings now amount to SEK 363 billion while the liquidity surplus, i.e.
Prominent indices such as the Dow Jones Industrial Average, S&P 500, Nasdaq Composite, FTSE 100 and the Nikkei 225 have declined by an average of around 7% in mid-August, from highs in July. Another factor linked to the economic outlook is the role of monetary policy. Economic growth in the last decade has mainly been driven by the use of unconventional monetary policies. While these policies have supported economic recovery following the global financial crisis, by ensuring a low interest rate environment, they have led to other unintended consequences like fueling debt levels across the globe. Thanks to low interest rates, global debt has ballooned to over $ trillion, nearly 320% of global GDP.4 While household debt has seen a gradual increase (3% growth per annum), the real growth in debt lies with governments, financial institutions and corporates. In particular, government debt has doubled since 2008, from $ trillion to $ trillion, especially with governments in developed economies having borrowed heavily over the past few years. Among OECD countries, Japan, Greece, Italy, Portugal, Belgium, France, Spain and the UK now all have government debt that exceeds their GDPs.5 This extended period of historically low interest rates has also enabled corporates from around the world to take advantage of cheap debt. Global corporate debt has also nearly doubled over the past decade, from $ trillion to $ trillion, even Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -4-  surpassing the increase in government debt.

The bank proved incredibly successful, leveraging its brand affinity and customer loyalty to acquire over 300,000 customers within their first 24 hours, one million within five days, and reaching six million customers within a year. 14 Thus, within a year of opening, Kakao Bank had a third of the number of customers of Shinhan Bank, the largest bank in South Korea. This was despite the fact that Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 10 -  financial inclusion in South Korea was already at 95% at the time. You can imagine how long will it take for Kakao Bank to become the largest bank in the country. This example demonstrates that banks cannot take customer loyalty for granted. They need to ensure that customers engage with them not because they have to, but because they want to. And the only way to ensure that is by not only understanding customers, but also becoming central to their evolving needs. ii. Battle for Value To win the battle for customer loyalty, banks must provide value, which is the second battle. Winning this battle requires banks to adopt a more proactive approach when positioning themselves with respects to their customers. It is not enough to be on the sidelines as, say, a purely auto financing or mortgage provider. Banks need to position themselves at the center of the ecosystem, providing their customers with the best products, services and advice as and when customers require.