samchain/econo-pairs-v1 huggingface dataset:
In the case of the pension system, the 2011 and 2013 reforms included a progressive raising of the retirement age, the application of the sustainability factor, which links the initial pension to the increase in life expectancy, and an annual revaluation index for pensions, with their increase conditional upon the system’s revenue and expenditure being in balance. These reforms were geared to gradually correcting the system’s current shortfall, significantly countering the effect of the expected increase in the dependency rate in the long term. However, the latest legislative developments appear to be moving towards relaxing the application of the current re-balancing mechanisms, the sustainability factor and, above all, the annual revaluation index for pensions. A return to inflation-indexed pensions would, on Banco de España calculations, give rise to an increase in public spending of over 3 pp of GDP in 2050 compared with the scenario based on the strict application of the revaluation 8/14  index. Ensuring the system’s financial sustainability would therefore require including additional measures on the revenue or on the expenditure sides of the system. In any event, it is desirable that any reform strategy chosen should increase the system’s transparency, strengthen its contributiveness (i.e. the relationship between contributions and benefits) and, in particular, maintain an automatic adjustment mechanism that ensures the sustainability of the population’s future pensions.

Challenges facing the Spanish economy First, regarding fiscal policy, let me stress that maintaining high public debt over a prolonged period may have negative effects on economic growth: it raises financing costs for the economy; it makes it necessary to run substantial primary surpluses that demand higher tax levels or lower levels of productive spending; it lessens the room for countercyclical fiscal policy measures to address potential adverse shocks; and it is a source of vulnerability in the face of changes in market investor sentiment. Accordingly, resuming fiscal consolidation is a priority, so as to enable the progressive reduction of the public debt/GDP ratio and of the structural deficit, in line with the demands of European and national fiscal rules. The fiscal consolidation process should, moreover, be compatible with an improvement in the quality of public finances. The adjustment needed should be anchored in a mediumterm programme in which the measures allowing the attainment of budgetary objectives should be spelt out, along with a prudent macroeconomic and public revenue forecast. Furthermore, the composition of the adjustment takes on particular importance, as it should be conducive to a greater contribution of public finances to the economy’s potential growth. Population ageing is also a challenge of the highest order for the sustainability of public finances. Specifically, the latest estimates of its impact on public spending on pensions, health and long-term care reveal a significant increase in expenditure on these areas over the next three decades.
This reflected the intuition that the downward pressure on firms’ margins from higher oil or import prices would tend to result in downward pressure on real wages as firms sought to restore margins. The NAIRU captures the shift in unemployment required for workers to accept this real wage adjustment. These alterations in the main estimates of the output gap were pragmatic responses by the MPC to changes taking place in the economy. It is not appropriate to ask which of these proved in some sense “better” given that the different measures were reflecting the MPC’s judgements about different economic events. In any case, the sequence of oil price fluctuations and the depreciation of sterling in 2007–08 have had short-term impacts on inflation which have tended to make it more difficult to judge the trend underlying this greater volatility. However, earlier in the MPC’s life there is some indication that the committee tended to overestimate inflationary pressure. Up to the end of 2003, the MPC produced fan charts around projections for RPIX inflation. During this period of relative inflation stability, those projections were broadly clustered around the outturns, and indeed inflation was generally quite close to target. However, outturns of RPIX, excluding the (misleadingly-named) housing depreciation component of the index, would have tend to be below the projections (Chart 1 shows the opening up of the gap between RPIX and RPI excluding housing costs). The MPC does not pretend to any ability to project house prices, although there are some broad assumptions underlying the central projection.

Chart 7, summarising the results, is a version of a graph we published in the last two Inflation Reports. Note that, over time, the effects have tended to be positive. The average age and experience of the workforce has grown; more people have gone into higher education and higher-paid occupations. But on top of that underlying trend, we’ve seen sharp movements, in both directions, during the recent cycle. Both the drop in job creation during the Great Recession, and the corresponding pick-up during the recovery, were skewed towards the less skilled, less well paid end of the jobs market. Chart 8, which plots the differences in job creation across three classes of occupational characteristics, depicts one aspect of that pattern5. You can see similar differences in rates of job creation between young and old, less and more educated. And as I outlined in the introduction, the effect of these swings was to add materially to the growth of average earnings during the downturn and to subtract from it in 2013 and 2014. Unskilled employment generally more cyclical Before asking why this has happened let me make a few points about the estimates. First, there are some approximations involved. One involves the mix of surveys: we’re estimating the impact of compositional changes on LFS pay data and assuming the effect simply carries over to the AWE. That’s the most reasonable assumption, but it’s an assumption nonetheless.
Thomas Jordan: The Swiss National Bank’s monetary policy after the discontinuation of the minimum exchange rate Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 107th Ordinary General Meeting of Shareholders of the Swiss National Bank, Berne, 24 April 2015. *  *  *  Mr President of the Bank Council Dear Shareholders Dear Guests, dear School Students Since 15 January, the Swiss National Bank (SNB) has once again been coming to terms with a whole new set of challenges. On that day, the Governing Board decided to discontinue the minimum exchange rate because the international environment for the SNB’s monetary policy had changed dramatically. The end of the minimum exchange rate of CHF 1.20 against the euro has far-reaching implications for our economy. It is therefore understandable that our decision triggered strong reactions. Yet had we continued to maintain the minimum exchange rate for a certain period, the consequences for our country would have been much more severe. In my talk today, I would like to explain to you in detail our reasons for discontinuing the minimum exchange rate. The SNB attaches great importance to clarifying its monetary policy decisions. This is, on the one hand, an important part of our statutory duty of accountability to parliament. On the other, it is a prime concern of ours that the general public and, in particular, you, our shareholders, should understand our monetary policy.

Professor John Taylor, currently a Treasury under-secretary in the Bush Administration, has formulated a simple rule for interest setting that has come to be named after him and been widely recognised. With the Taylor rule, the instrumental rate varies around an equilibrium rate with a correction for actual inflation’s relationship to targeted inflation and resource utilisation (GDP growth’s divergence from an estimated trend). Given that the economy is in equilibrium, inflation is 2 per cent and the output gap is zero, in Taylor’s version of the rule for the United States the nominal instrumental rate is 4 per cent. Divergences in resource utilisation or inflation prompt the central bank to raise or lower the instrumental rate, depending on the size and direction of the deviations. The Taylor rule is popular for several reasons; besides being relatively simple, it seems to give a relatively good account of monetary policy in many different countries. In that way it has contributed to a better understanding of how monetary policy is conducted. To date, however, no central bank has explicitly stated that it has chosen to base its monetary policy on the type of rule John Taylor advocates. BIS Review 24/2002  3  One result that a money supply target and the Taylor rule have in common is that monetary policy’s responses to the various shocks to which an economy is constantly being exposed are systematic and predictable.
True, any non-observable variable becomes visible at some point in the form of a disequilibrium in other observable variables, among which the twin deficits (budget deficit and current account deficit). Yet, when this happens, it is usually too late for monetary policy. Therefore, we drop the non-observable variables such as output gap, inflationary expectations and NAIRU – at least when the task at stake is to explain inflation in a post-crisis environment. Instead, we choose to use observable variables only. Since wage is a measurable, reliable, accounted for, and comparable indicator, we focus on a wage Phillips Curve where consumer prices inflation rate is explained by the difference between past wages and current wages. Second, we should make a fundamental change of paradigm from flow to stock. To understand the consumers behavior, which in turn influences inflation, we introduce the concept of a cumulative wage gap – meaning the cumulative gap between current wage and a peak reference wage value in the past. The permanent income hypothesis is fundamentally flawed in times of crisis, because of uncertainty of future income. The only certain reference value lies in the past, not in the future: and that is why current consumption is influenced by past income. Third, we should allow for the Phillips Curve to be non-stationary: it moves over time, and it is absolutely normal to do so.

Women are now also part of the increased mobility of talent that is able to relocate to different parts of the country or to venture abroad. Increasingly, women are now rising to senior and key top management positions in both private corporations and in government, although we are still less than where we should be. The changing corporate cultures, the shift away from hierarchical structures, in fact, are to the advantage for women professionals. We have seen these changes taking place in international corporations, where the previous power structures have resulted in limited opportunities for women. Changes in corporate cultures towards more collegial environment have inculcated organisational values and behaviours that have been more conducive for increased opportunities for women. Let me turn to the implications of an environment of constant change and transformation. Indeed, as we go forward, we can expect this pace of change to intensify. To succeed in this ever changing environment, there needs to be an awareness and an understanding of the nature of these changes and its radical implications and consequences. Survival in the modern economy requires the adoption of new approaches and strategies. Approaches that have brought previous successes will no longer become relevant. It will require radically different ways of doing things. Prospering on a short-term business trend without developing capabilities and competitive positions will risk the future of any business. The new environment requires strategies that aim to secure durability and sustainability. This new environment will be characterised by increasing competitive pressures.
4  BIS Review 145/2010  As I mentioned earlier, the Fund has become larger than we expected a decade or so ago as high oil prices have more than compensated for fairly low returns in international capital markets. Looking ahead, market prices suggest that interest rates are expected to remain low for many years. Real interest rates on long-term bonds have been depressed by central bank government bond purchases. Let us nonetheless assume an average nominal return on the Fund’s fixed income instruments of 3 per cent ahead. On the other hand, there are no signs that return requirements in equity markets are low. Dividend payments are high in relation to companies’ market value. Simple valuation models 9 indicate that shareholders require a rate of return between 8 and 10 per cent, a fairly normal level. This results in an overall nominal return of between 6 and 7 per cent. In addition, positive contributions to the return are expected from non-government bonds, active management and real estate. There is considerable uncertainty surrounding these estimates. Nevertheless, Norges Bank’s view is that it is still reasonable for the government to base its withdrawals from the Fund on an expected annual real rate of return of 4 per cent. The increase in the equity allocation from 40 per cent to 60 per cent does not provide a basis for higher withdrawals from the Fund, but reflects prospects for somewhat weaker returns in international markets today than was the case ten years ago.

Truman’s criteria were also included in the basis for the Santiago Principles which, facilitated by the IMF, were introduced in 2008 and implemented by a number of sovereign wealth funds. To quote Truman: “Sovereign wealth funds (SWFs), large pools of government-owned funds that are invested in whole or in part outside their home country, burst upon the policy consciousness only three years ago. Their explosive growth up until 2007 fanned widespread anxieties about shifts of global economic wealth and the roles of governments in managing that wealth. On the other hand, SWF investments helped some major Western financial institutions weather the recent financial crisis.” Chart: Truman’s ranking In Truman’s most recent study on the transparency of sovereign wealth funds, the Government Pension Fund Global was ranked in first place. The Fund has also improved its score since the 2009 survey. We note with satisfaction that such a young fund has come out ahead of established US and European funds 15 . 15  Edwin M. Truman (2010): “Sovereign Wealth Funds: Threat or Salvation?”, Peterson Institute of International Economics. 8  BIS Review 145/2010  As I mentioned by way of introduction, the economic literature points to two factors that can turn riches into rags. One is the risk of inducing interest groups and economic agents to engage in rent-seeking behaviour. It can safely be said that the framework for the Fund has fended off this risk. Chart: Relative wages in Norway The second is the risk of Dutch disease. Strictly speaking, the jury is still deliberating.
As regards economic developments, we are aware that the discontinuation of the minimum exchange rate means that there are difficult times ahead for Switzerland. We have every confidence that Switzerland’s economy and its economic agents will rise to the challenge and adjust to the strong Swiss franc. The last few years have provided an impressive illustration of just how exceptionally adaptable this country’s entrepreneurs are. The Swiss franc is significantly overvalued and while it is expected to weaken over time, until it does, this substantial – and above all abrupt – appreciation of the currency will present considerable challenges. I repeat: My colleagues on the Governing Board and I have great respect for the business community whose task it will be to make these difficult adjustments. BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11

First, globally it is not normal for prudential regulators to have an actual competitiveness objective – to my knowledge there is only one example amongst 3/5  BIS central bankers' speeches  the main prudential regulators. I worry therefore that having such an objective might be seen by others as an intention to weaken regulation in the UK, and thus undercut our authority in international bodies. I also think it’s a bit of a red herring. A robust prudential regime focussed on objectives of safety and soundness and policyholder protection is part of the national infrastructure that underpins the attractiveness of UK firms as counterparties. Second, it is wise not to give regulators too many objectives and have regards. Loading something up with ever more objects is an excellent way to decorate your Christmas tree but it’s not the best way to create an effective regulator. Solvency II Review So much for theory. What about practice? In particular the main event of this year: you may think it is defeating Covid, but of course it is in fact the review of Solvency II. I don’t want to bore this audience (any more than I have already) with a discussion of detailed measures. But I have a few brief points to make about the review itself. Perhaps most importantly, the review will stay true to the basic principles of Solvency II.
6  BIS Review 69/2010  Inflation targeting has served the Norwegian economy well in the run-up to the crisis and later. Inflation expectations are firmly anchored. This is partly because inflation has on average over time been close to, but somewhat lower than, the target of 2.5 per cent, and because annual variations have not been pronounced. Inflation measured by the CPI is now 3.3 per cent, but 2 per cent if the temporary increase in electricity prices is excluded. Inflation will fall later in the year. In the period of expansion in the Norwegian economy up to summer 2008, the increase in the interest rate contributed to keeping inflation low. During the crisis, we were able to reduce the interest rate markedly without an upward shift in inflation expectations. The real interest rate turned negative. The interest rate reduction rapidly stopped the fall in consumption and property prices. BIS Review 69/2010  7  The krone exchange rate has also by and large contributed to stabilising inflation and employment. In the short term, the krone exchange rate can fluctuate widely, and it depreciated in autumn 2008 because capital sought safe havens. This helped Norwegian manufacturing in the first phase of the downturn. Since then, the krone has appreciated considerably. This has dampened inflation prospects. Experience from the crisis in other countries indicates that monetary policy alone cannot ensure stable economic developments.

Monetary policy has only one instrument by which to achieve the objective of low and stable inflation, and the interest rate is a crude instrument. Hence, other objectives must be achieved by means of, for example, financial regulation and the tax system. In Norway, a number of arrangements functioned during the financial crisis. Banks’ capital adequacy ratios were at the outset fairly high, with high quality Tier 1 capital, and Norway had a bank guarantee fund financed, albeit only just, by capital paid in by banks. Norges Bank also holds ample foreign exchange reserves and was able to supply foreign exchange to banks. Norwegian banks felt the impact of the global financial crisis primarily as a result of reduced access to funding. Over time, banks have increasingly relied on fairly short-term funding in global markets to finance their lending. This is the main reason why Norwegian banks encountered problems when funding from foreign sources dried up in 2008. For Norwegian banks, the financial crisis essentially proved to be a funding and liquidity crisis. New and increased equity capital and liquidity requirements for banks can promote stability in the financial system. The requirements should probably be more stringent in Norway than the minimum requirement that is likely to be agreed internationally. It is also important to cooperate with the other Nordic countries to avoid a situation where more lightly regulated banks aggressively market loans in Norway.
Ravi Menon: Securing good jobs in a growing financial industry Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Inauguration of BNP Paribas’ Asia Pacific Campus, Singapore, 7 March 2014. *  *  *  Alain Papiasse, Deputy Chief Operating Officer and Head of Corporate and Investment Banking, BNP Paribas Group, Eric Raynaud, Chief Executive Officer of BNP Paribas Asia Pacific, Distinguished guests, ladies and gentlemen, good afternoon. I am delighted to join you today to celebrate the opening of BNP Paribas’ new Asia Pacific Campus here in Singapore. It is a truly impressive campus, skilfully combining the charms of a colonial heritage building with state-of-the-art facilities and technologies. A significant move The opening of this Campus in Singapore is significant for a few reasons. •  First, it demonstrates BNP Paribas’ firm commitment to strengthening the capabilities of its staff in Asia. This is BNP Paribas’ first corporate training centre outside of France. •  Second, it shows strategic foresight. BNP Paribas took the decision to invest in this Campus three years ago, when it was facing a very challenging economic environment with the Eurozone gripped by crisis. •  Third, it reflects in a way a broader story of the continued importance of Asia to European banks. After almost two years of stagnation, European bank lending to Asia has started to rise again.

2  BIS central bankers’ speeches  •  We have world-class universities such as INSEAD and University of Chicago based here, who will collaborate with this Campus to design programmes to offer highquality, specialised courses in banking and finance. •  We have research centres such as the Centre for Asset Management Research and Investments and EDHEC conducting specialised research in areas relevant to the financial industry. •  We have training providers such as the Wealth Management Institute and Risk Management Institute organising programmes and conferences to further thought leadership in areas of finance. BNP Paribas’ Asia Pacific Campus is a welcome addition to Singapore’s ecosystem to build human capital in finance for the future. Conclusion This is an exciting time to be in the financial industry, notwithstanding the challenges it has gone through since the crisis. It is also an exciting time to be in Asia. But to seize the opportunities in Asian finance, we need a deep pool of highly skilled and trusted professionals. I thank BNP Paribas for growing with Singapore, and for being a strong partner with MAS in our efforts to develop talent and capabilities. I am confident your strong presence in Singapore will serve you well as you continue to extend your Asian footprint. BIS central bankers’ speeches  3