samchain/econo-pairs-v1 huggingface dataset:
I would also like to acknowledge the unstinted service rendered by former Deputy Governors, Mr. P Samarasiri and Mr. S Lankatillake, who retired from the Bank service in 2017. Finally, I would also like to express my sincere gratitude to the Assistant Governors, Senior Heads and Heads of Departments, particularly the Director of Economic Research and the Staff of the Economic Research Department for their effort in compiling this policy document. A special word of gratitude to my colleagues in the Governor’s Secretariat who have had to put up with me on a day-to-day basis. In fact, I thank all Staff of the Central Bank who are dedicated to fulfilling the objectives of the Central Bank and maintain their professionalism, technical excellence and integrity for the betterment of the country. However, it has been revealed that a tiny minority of the Central Bank staff have not lived up to the very high standards that are expected in this iconic institution. In such instances, firm action has been taken to stamp out such wrongdoing in the future. Thank you and I wish you all a Happy and Prosperous New Year 2018. 33

Their technical recommendations, free of short-term political pressures or 7/9  vested interests, may provide valuable guidance for other economic policies. Although this function is not always formally incorporated into the legal framework, in the case of the Banco de España this role is recognised in our Law of Autonomy. Indeed, this legislation establishes a function to “advise the government”, which supports our role in evaluating other public policies. This is also the case of the European Central Bank, on which the Treaty confers an advisory function with regard to proposals for European Union and Member States’ legislation within its fields of competence. 5. The key importance of transparency and accountability The fifth and final reflection concerns highlighting the importance of pursuing the highest standards of accountability and transparency vis-à-vis both society and the political representatives. Indeed, accountability and transparency support both the effectiveness and also the legitimacy of central bank independence. We need to keep in mind that monetary policy is now more complex and society is constantly raising the bar for these standards. The adoption of unconventional tools marked a shift away from the “one goal, one instrument” policy setting in which accountability was easier. More instruments at play might have also raised concerns about the possibility that central banks have stepped beyond their mandates, thus potentially endangering the public perception about the value of their independence.
To make the macroeconomic effects of QE more concrete: previous Bank of England analysis suggests that the initial £ billion of QE during QE1 may have increased GDP by 1.5%–2% and inflation by 0.75pp–1.5pp.19 Using similar estimates in a 2016 speech, Mark Carney, estimated that if the MPC had left monetary policy – Bank Rate and QE – unchanged in the financial crisis, the level of GDP would have been 8% lower and 1.5 million more people would have been out of work.20  Whether the £ of QE we announced last March had the same impact is a complex question, and there are arguments in both directions as to whether its impact will turn out to have been larger or smaller. On the one hand, government bond yields have been very low by historical standards and it is possible that there may be limits to how much more QE can do to push them down. On the other hand, our March purchases in particular took place as I have said against a backdrop of extreme market disorder. Our purchases, alongside other policy measures here and abroad, were instrumental in restoring order, and indeed we deliberately carried them out at an unprecedentedly fast pace to achieve that – in the words of the Governor, Andrew Bailey, we “went big and fast”. Had we not done this then that market disorder might, as we said at the time, have led to an unwarranted tightening of monetary and financial conditions, and an even sharper contraction in GDP.

His 2017 NIESR paper with Bill Allen examined the shift from the “old normal” of pre-financial crisis monetary policy to the “new normal” of QE and forward guidance, as well as engaging seriously with what a “future normal” for monetary policy might look like.5 That is a framing I will use for this lecture in setting out my own views of QE as a monetary policy tool, and then focusing on two other policy debates highlighted by the IEO review, the links between QE and government financing, an issue Peter also considered6, and the links between QE and climate change. The Bank of England and its balance sheet I’ll come on to the details of what exactly QE is and what uses it has as a policy tool, including over the last 11 months in response to the Covid pandemic. But I want to start by considering a more general question, which is the question of what central banks are actually for. That’s because I don’t think you can answer the question of how to use a tool without first knowing what you want the tool to do.
Inflation and the transitory effects The CPI is used by the Riksbank to target inflation mainly because it is familiar, published monthly with a short time lag and seldom has to be revised. However, using the CPI as a target variable is liable to face monetary policy with explanatory problems. The past year is a case in point. The low rate of inflation stemmed mainly from transitory effects; the consolidation of government finance and increased confidence in economic policy helped to strengthen the exchange rate. During 1996 it proved possible to lower the instrumental rates almost 5 percentage points. Altogether, in 1996 decreased interest costs and the stronger exchange rate had a downward effect on the CPI of around 1 percentage point. In some countries the inflation target is assessed in terms of the CPI with various components excluded, for example indirect taxes and subsidies or mortgage interest costs. It may then be asked whether the CPI is the most appropriate target variable and whether some measurement of underlying inflation might be preferable. An advantage of focusing on a single underlying indicator is that it might help the Riksbank in its contacts with the general public and make monetary policy more transparent. Analysis and debate would be concentrated on factors that monetary policy influences. BIS Review 32/1997  -2-  This, however, presupposes the existence of an underlying yardstick that can take every conceivable transitory effect into account. Such measurements are difficult to construct.

Such decisions can be made after an exchange of information with the government but in the final analysis it should be up to the Riksbank to determine whether or not they are compatible with price stability. With a flexible exchange rate, policy should operate, as today, with an inflation target, and the government should have no possibility of influencing the construction of exchange rate policy. Democratic control is important. But it should be exercised via the Riksbank’s principal, the Riksdag, on whose behalf monetary policy is conducted. It should be noted that in exceptional situations, when the price stability objective may have to be suspended for the time being (e.g. a major oil price shock), both the government and the Riksbank may call on the Riksdag to amend the Riksbank’s statutory objective. In that way the democratic control of monetary policy can be clearly ensured. BIS Review 32/1997
BIS Review 137/2010  5  Nevertheless, several risks to home prices in the City remain. These risks include the ongoing completion of a considerable number of new apartment buildings – ones that were started at the end of the boom. Another risk comes from the slow pace of job growth in highpay sectors (including the securities industry) in New York City. Finally, during the boom, prices rose substantially faster than rents. Going forward, this disparity could exert downward pressure on home prices as renting has become a more affordable alternative. Conclusion In sum, after a recession that was milder than in many parts of the country, the region is showing signs of a modest recovery in New York, but little growth elsewhere. The housing sector played a pivotal role in the recent national downturn. In the region, the fact that housing activity has a smaller weight in the regional economy helped to limit the recession’s impact on many communities. Going forward, given housing’s significance to the well-being of people in our region and beyond, the New York Fed will continue to focus on the sector as we monitor regional and national economic conditions. Thank you for your kind attention. I will now ask James Orr to provide more details on current regional economic conditions. 6  BIS Review 137/2010

The longer the krona remains 2  2  These calculations are based on a Cobb-Douglas production function with a constant returns to scale. BIS Review 78/2001  undervalued, the greater the risk of bad investments being made in domestic businesses. I do not intend to go into these issues in greater detail here and now, but would nevertheless like to point out that undesirable effects on business can arise through a misaligned currency giving flawed relative prices. Companies may make decisions regarding investment and employment on the basis of these relative prices. The foremost risk here is that too many resources will be drawn to the export sector and to the import competition sector before there is a return to the equilibrium exchange rate and to corresponding relative prices. At that point, the resources overinvested in these sectors will be transferred to other sectors. We know from previous structural changes in, for instance, shipping, steel manufacture and the property sector, that such a development would result in considerable costs to the real economy. One should not underestimate the importance for welfare of a correctly valued Swedish krona. Openness is important Factor productivity is also affected by a country's capacity to utilise technological progress in the outside world. This capacity in turn depends on how open the country is to impulses from outside, which is determined by the barriers that exist to ideas, goods, services and production factors moving freely across the borders.
Dear participants, We recognised the efforts made by the Government aimed at enhancing a broad spectrum of skills in the country through such institutions as TEVETA. What is required is a more Targeted intervention in order to improve labour market opportunities for individuals by helping them obtain necessary skills and facilitating labour market transitions. Countries that have been most successful in skills development did so by sustaining implementation of coordinated policies linking education systems, skills formation, employment and decent work. These countries include India, Costa Rica, and South Korea. They made quality education broadly available and introduced mechanisms to match supply to the current demand for skills, often by means of linking training providers and employers at sector and local levels. They helped workers and enterprises adjust to change and used skills strategically as a core element of industrial, technology and trade policies to move from lower to higher productivity activities and facilitate investment in new industries. Involving workers and the private sector was a main feature of this approach. Zambia can learn a lot from some of these countries. Effective training systems in conjunction with the private sector should facilitate demand-driven training in sectors and locations with high job growth potential, avoiding bottlenecks and improving employability. 2  BIS central bankers’ speeches  Expanding accessibility to quality training is a powerful instrument for empowerment and inclusion of the youth and disadvantaged groups: women, rural dwellers and persons with disabilities.

Dear participants The productivity and the quality of work are major determinants of life quality, affecting nutrition, health and education, social protection, and fair treatment. Jobs are particularly important for the poor, whose labour is often their only asset and a primary route to poverty eradication. It is for this reason, that we at the central bank recognise skills development as an economic imperative. This is because it increases productivity of economic agents. Chairperson In the aftermath of the recent global financial crisis of 2008, employment has re-emerged as a top priority area across the world. A large and growing young population can be a driver for economic growth and social progress provided they access quality education and health, and are engaged in decent employment, without which, many young people will not be able to escape negative social vices and poverty. In recognition, of the foregoing, the National Budget for 2013 whose theme is; “Delivering Inclusive Development and Social Justice” has for the first time put job creation at the centre of its development agenda by explicitly targeting the creation of 200,000 jobs in 2013. BIS central bankers’ speeches  1  Sectors targeted for these jobs are agriculture, tourism, manufacturing and construction (including infrastructure). Ladies and gentlemen Sustained efforts to bring in private investment coupled with supportive public policies and investment, would contribute to enhancing productive capacities and generating the much needed jobs in our country.
Forging university and regional professional networks will surely be supportive of this endeavor. Visa, work permits, and regulatory requirements on foreign employment are all important issues that need to be quickly addressed to ensure that the investment environment is competitive. Over the longer term, I also see it as very crucial that we address obstacles to integration at the root cause, which is the weak integration mindset. This integration mindset means that we need to assess the benefits and costs of integration more deeply and strategize how they fit with the overall economic development plans of individual ASEAN member countries. There are dangers in allowing such an important assessment to remain vague. My concern is that many key stakeholders of ASEAN integration still view the AEC with cynicism; that life will go on, with few changes to the status quo. And this complacency is very dangerous because we may wake up and find that we are already too late to catch the rising wave of ASEAN. Distinguished Participants, The second part of this three-pronged strategy deals with human capital development to meet global competencies. My personal opinion as a CEO in the financial industry is that we need people or our human resources in the next decade to be assertive, flexible, analytical and quantitative, technology competent, as well as having strong leadership, people skills, foreign language proficiency, and cultural awareness.

This is a question that in itself does not concern the choice of whether or not we should have electronic trading. All business is settles, whether this is done through a traditional market-maker system or by electronic trading. Those buying fixed income instruments want to be sure of receiving what they have bought an those selling want to receive the money they have been promised, regardless of the trading form. On the other hand, it is clear that it would be desirable to take the opportunity to design a new system that would provide a good means of handling settlements. This is particularly important as the increased volumes hoped for, which are the whole point of the new system, will create increased risks in terms of settlement. Today settlement on the fixed income market is done by means of net settlement in VPC. This works well in many ways and the routines are perceived as manageable by the market players, as far as I understand it. However, the system is nevertheless obsolete and involves risks. If one of the parties involved failed to meet its payments during the daily settlement, for instance, if one party was forced to make a suspension of payments or simply lacked sufficient liquidity, the situation could become troublesome. The existing routines can be called into question. One can imagine situations where settlement is not achieved, which could have consequences for the liquidity of the banking system. From the point of view of financial stability, this is an unsatisfactory situation.
Following the crisis, the Asian governments strengthened the macroeconomic fundamentals and put in place structural and fiscal reforms. The strong economic development in China and, then, India also helped to propel the region ahead. Today, the Asian economies growth rate averages around 8%. Businesses have repaired their balance sheets and have started to invest again after purging out the excesses of the 1990s. This is reflected in the Asia (ex-Japan) domestic bond markets, with a significant increase of almost five times in size from $ billion to more than $ trillion; far exceeding the global growth rate, which has doubled since 1997. Having said that, the global financial markets today are facing yet another crisis. Ten years ago, Asia was at the centre of the storm. However, this time round, the financial market turbulence started in the US and Europe and then spread throughout the world. The challenges facing the capital markets show that the banking system is intertwined with the capital markets more intricately than was previously believed. While the characteristics of the two financial crises are different, let me share 3 common themes that run through both crises. The first has to do with the tendency of the market to assume that current market conditions can be extrapolated into the long term. Before the Asian financial crisis, most investors extrapolated the rapid growth in Asia and the currency pegs maintained by some countries without factoring in the sustainability of such trends.

The real long-term interest rate is, of course, determined by structural features of the economy, not by central banks. Enduring changes in the level of real interest rates and in the cost of credit intermediation by lenders alter the sustainable level of debt service of borrowers. And changes in the interest rate also affect the net present value, and hence the price, of housing assets. All else equal, lower rates will increase both the price borrowers can afford to pay and the net present value of houses. There has been a substantial fall in the long-term real interest rates of around 4.5 percentage points over the past 30 years (Chart 4); this trend has occurred across countries. The structural decline in real rates pushed up on house prices in particular given the inelastic supply. It has also made a larger debt stock easier to service. This fall in real rates was clearly an important factor over the period in driving the high rate of credit growth relative to GDP and the consequent increase in the level of household debt to income. Looking forward, to the extent that the fall in interest rates was the result of structural factors that are likely to last for a long time, the increase in the level of household debt is more likely to be sustainable.
Over the past two decades, there has been a significant change in the financing of higher education—with state and local funding covering a smaller share, and students and their families bearing a greater proportion of rising college costs. While the federal student loan program has undoubtedly helped mitigate the impact of higher costs on college enrollment, more students now leave college with higher amounts of debt. At the same time, college dropout rates remain stubbornly high, and empirical evidence indicates that graduates from some colleges have had trouble finding good-paying jobs. Another important question concerns the consequences of growing student debt for the overall economy. To investigate this question further, we linked our CCP dataset to student enrollment records from the National Student Clearinghouse in order to analyze the relationship between homeownership, educational attainment and student debt. Not surprisingly, our research shows a strong positive association between educational attainment and homeownership, consistent with the fact that higher educational attainment is associated with higher average earnings. Interestingly, this relationship appears to hold irrespective of family background, suggesting that colleges may be successful in “leveling the playing field” across students from different socioeconomic backgrounds. At the same time, our analysis reveals that those with significant student debt are much less likely to own a home at any given age than those who completed their education with little or no student debt.

William C Dudley: Household borrowing, student debt trends and homeownership Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on Household Borrowing, Student Debt Trends and Homeownership, Federal Reserve Bank of New York, New York City, 3 April 2017. * * * Andrew Haughwout, Joseph Tracy and Wilbert van der Klaauw assisted in preparing these remarks. Good morning, and welcome to the New York Fed’s Economic Press Briefing. Today, we will focus on recent developments in household borrowing, with special attention on student debt. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. Following a period of steady deleveraging that began during the Great Recession, households have gradually increased their borrowing during the past three years. Later this year, total household debt is expected to reach its previous peak, from the third quarter of 2008. Given past experience, one might wonder whether this level of indebtedness is sustainable or a reason for concern. Answering this question requires a fuller consideration of household balance sheets and a deeper analysis of who is indebted. The increase in liabilities in recent years has been accompanied by significant improvements in the value of assets held by households, due to strong growth in housing and stock prices. Moreover, household incomes have been rising at a moderate pace due to sturdy job gains and modest wage increases.