samchain/econo-pairs-v1 huggingface dataset:
ANNUAL GROWTH AND CONTRIBUTIONS  4.0  CHART 1  Projections  %  4.0  2.0  2.0  0.0  0.0  -2.0  -2.0  Projections  %  -4.0  -4.0 2011  2012  2013  2014  2015  NET EXTERNAL DEMAND  2016  2017  2018  2011  2019  2012  2013  2014  2015  2016  2017  2018  2019  IMPORTS OF GOODS AND SERVICES EXPORTS OF GOODS AND SERVICES NET EXTERNAL DEMAND  NATIONAL DEMAND  GROSS DOMESTIC PRODUCT  SOURCES: INE and Banco de España. FORECASTS FOR THE SPANISH ECONOMY: EMPLOYMENT AND UNEMPLOYMENT GDP GROWTH(%) Contributions of employment and labour productivity (pp) Projections  4  CHART 2  UNEMPLOYMENT RATE (% of the labour force) Projections  28 25  2 22 0  19 16  -2 13 -4  10 2013  2014  2015  2016  LABOUR PRODUCTIVITY  2017  2018  EMPLOYMENT  GDP  2019  2013  2014  2015  2016  2017  2018  2019  SOURCES: INE and Banco de España. particularly marked in the euro area; the progressive normalisation of monetary and financial conditions; and the very limits on the growth of domestic demand, such as, for example, those derived from the current, historically low levels of the household saving rate. On Banco de España estimates, the Spanish economy’s already positive output gap will widen during 2019 (see Chart 3).

Today, more than half of the Thai labour force is in the non-agricultural sector (including services), which is more averse to changes in global competition for trade and investment. Moreover, to maintain competitiveness, our economy needs the labour force that possesses higher and more flexible skill sets to move up the valued added chain of production and trade. In reality, Thailand, just like other countries, has weakness in the mismatch of skills produced through formal schooling from those which firms find useful. Government policies need to address this weakness quickly, by finding ways to align formal education with training through vocational schools and apprenticeship programs organized by private businesses. Key questions will be on designing appropriate incentive structures for players in the education and business sectors, while being mindful of social safety net considerations when businesses close. This is especially important because the agricultural sector now accounts for about 10 percent of the overall economy and cannot provide social-safety support for the non-agricultural sector should a downturn hit. In addition to government policies, investors and firms can play their parts in helping to improve labour skill and quality development. This can be achieved through building more experience in the workplace by investing in the best technology and capacity to use that technology efficiently. Importantly, we also need to focus on the quality of investment that will help build skills and enhance production techniques that adds higher values and saves costs. Ladies and Gentlemen, To close, let me highlight another important underlying strength of the Thai economy.
If EU regulation and internationally agreed standards diverge materially, it will both create barriers to that activity and opportunities for regulatory arbitrage making it more difficult to ensure UK financial stability. My third example is the European Supervisory Authorities – the European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA). These were established to provide more detailed common rule making so that the EU Single Market in financial services could be supported by a common rule-book underneath the framework of high-level legislation. This search for more detailed alignment of regulation and standards has I think been a general feature of the post crisis reforms in the EU and more widely. The ESAs are governed by their boards, comprising national supervisory authorities, which are also responsible for the majority of their financing. They set and advise the Commission on the rules and standards – they do not engage directly in the prudential supervision of firms. The European Supervisory Authorities perform another important function. I have talked about common rules, commonly applied. There are of course enforcement mechanisms in the Treaties to ensure member States properly observe the EU legislation. But the need for this in financial services has been especially recognised with the ESAs having the capability to conduct peer reviews and for binding arbitration when one national authority believes another has not properly implemented or applied the rules. This is a powerful mechanism to prevent regulatory arbitrage and the risk of adverse spillovers between member states.

It was not fully completed until the Maastricht Treaty of 1992 when free movement of capital became a directly applicable Treaty right. And throughout this process, in recognition of the potentially destablising effect, safeguards were included to allow member states to defend their stability, including in relation to prudential supervision. The real push for free movement of capital came in the mid 80’s when European growth was sluggish, especially compared to the US and Japan. There was a search for policies to generate economic dynamism, which led to the birth of the single market. But, of course, until capital could flow freely between member states it was not really possible to have a single market in financial services or, in the financial sector, to give effect to that other founding freedom – the freedom to provide services across the EU. The liberalisation of capital markets in the EU was rooted in two beliefs. First and foremost that open capital markets, cross border investment and cross border financial services would create a more efficient allocation of capital through better intermediation between savers and borrowers across the EU as a whole. And, second, that the risks to economic and financial stability of an open capital account and cross border financial services could be managed by sound economic and financial policies to prevent destabilising volatility of capital flows and by good financial services regulation at the EU level.
Zdeněk Tůma: EU enlargement and monetary integration Remarks by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the 3rd ECB Central Banking Conference “The New EU Member States: Convergence and Stability”, Frankfurt, 21-22 October 2004. *  *  *  Ladies and gentlemen, It has been only recently since we had become members of the European Union. It is only natural that, once the immediate effects of the enlargement have subsided, policy-makers´ attention should shift towards the next step - monetary integration of the twenty-five current EU member states. The first thing to be considered when discussing European monetary integration is how the different countries will go about adopting the euro. There is no universal strategy that can be used by all new EU member states. The euro may either be adopted rapidly, or after a longer interim period. In the pre-EMU period, the emphasis can be put either on ensuring the low inflation required by the Maastricht Treaty domestically, or on importing it by fixing the exchange rate. The key factors that determine which strategy to adopt are, in my opinion, the size and flexibility of the domestic economy, the current monetary-policy regime and its credibility as well as the state of public finances. Specifically, small countries that have lived with fixed exchange-rate regimes for the last ten years, and have thus developed economies flexible enough to compensate for fixed exchange rates will most likely benefit from faster adoption of the euro.

However, the strategy of “leaning against the wind” is not entirely without problems, even if it may sound fairly simple. Many economists have criticised this strategy. The main critics considered, at least prior to the crisis, that although it may indeed involve an imbalance, the best strategy was for the central bank to confine itself to “cleaning up afterwards” once the bubble had actually burst. In their view, “leaning against the wind” often would not lead to  BIS Review 70/2010  3  more stable developments, but instead risks amplifying fluctuations. Three main arguments have been raised by critics against the policy of “leaning against the wind”. Difficult to identify a bubble and to do so in time? To begin with, it must be possible to identify the imbalance or potential bubble and to do so at a sufficiently early stage. The critics claim that this is very difficult and they often use the term “bursting bubbles” when talking about monetary policy and asset prices. The idea of bursting a bubble has much more dramatic associations than the expression “leaning against the wind”. If the developments that are judged to be unbalanced are actually justified by the fundamental driving forces, then a higher interest rate would curb growth unnecessarily. It could also cause problems if one fails to identify the imbalance sufficiently early and tries to remedy it too late. Then there is a risk of larger fluctuations in both asset prices and economic activity, completely contrary to the initial aim. Is this criticism justified?
Abolishing the tax relief would have a greater effect. In my example, abolishing the right to tax relief would have roughly the same effect as increasing mortgage rates by 1.7 percentage points. Cutting the mortgage cap from 85 to 75 per cent would not affect all households, but in my examples it would affect the households’ expenditure through higher interest rates and amortisations on the parts of the loan that are not the first loan. The effect of lowering the mortgage cap by ten percentage points as in my example corresponds for our households the cost of an increase in the mortgage rate of just over 1.9 percentage points. In the examples I have given, the introduction of an amortisation requirement would have the largest effect of all. If our households, which at the start did not amortise at all, were to be obliged to pay off their loans over 50 years, the increase in their expenditure would correspond to the increase that would arise if the mortgage rate instead rose by almost 3 percentage points. Some conclusions I wish to emphasise once again that what I have just presented are very simple calculations of the direct effects of various measures on some standard households’ expenditure. To be able to compare different course of action, one really needs more accurate calculations that can take into account how households’ behaviour changes over time as a result of the various measures.

The situation today is thus similar, with countries around the world contemplating how best to conduct macroprudential policy. In some areas, particularly in some emerging markets, they already have some experience of what could be described as macroprudential policy. However, the results have been somewhat mixed and it is unclear what lessons can be learned. The research on macroprudential policy has now begun in earnest, but it is still quite new and has not yet generated any very clear conclusions on which to base a policy. It is probably unavoidable, therefore, that practical policy-making in coming years will consist to a great extent of “learning by doing” – with the emphasis on both “learning” and “doing”. Stabilisation of the financial cycle One of the two main tasks of macroprudential policy is to counteract the build-up of financial imbalances in the economy. This task can be described as macroprudential policy trying to stabilise something I here choose to call the financial cycle. The academic literature on this subject contains other similar concepts such as “credit cycle” and “leverage cycle.”1 What this means in simple terms is that the volume of loans, indebtedness, asset prices and attitude to risk in the economy vary over time in a way that is not necessarily linked to the economic cycle. One usually calls this the cyclical dimension, or time series dimension, of macroprudential policy.
In most jurisdictions, but crucially not in the euro area, unconventional monetary policies have led central banks to purchase significant amounts of Government debt: those purchases amount to 51% of the total debt issued since 2009 in the UK, 21% in the US and 7.6% in the euro area – where they were fully sterilized. Although this was not the primary purpose, this policy stance has contributed to giving markets an insurance, or even an assurance, against a potential dry-up in liquidity. In all countries where significant amounts of debt have been purchased by monetary authorities, long-term interest rates have been kept at very low levels, irrespective of their fiscal situation. By contrast, purchases of sovereign debt by the Eurosystem have remained extremely limited and will stay so. Our objectives are very circumscribed: avoid disruptions in the monetary policy transmission mechanism. Any lasting liquidity backstop has to come from the governments. This is why we have been asking for more flexibility in the EFSF and very much welcome decisions taken in this regard on July 21st. Whether amounts are big enough is a matter of opinion. It would be unrealistic to expect an increase in the EFSF itself but I am personally open to any scheme that would allow existing commitments to be leveraged to provide greater intervention capacity. At the moment, the kind of insurance that most monetary authorities provide may look cheap because inflation is projected to stay low in the foreseeable future. But this equilibrium could be unstable in a different inflation environment.

The Bank of Albania will support this process by cooperating with the banking industry and improving the regulatory and supervisory framework. For the supervisory authorities of the financial system, the recommendations relate to strengthening the preventive and management framework of risks and, in this regard, improvement of the legal, operational and inter-institutional cooperation infrastructure is recommended. Concluding, I would like to reiterate our message: the prospects for Albania’s development remain positive. The economic and financial stability, geographical position and natural resources, and integration with the European Union make us optimistic about Albania’s future development. I invite you all to share in this vision and work together to make it a reality. I assure you that the Bank of Albania, as the supervisory authority, will undertake all the necessary actions, under its scope of activity, to support the industry to successfully overcome these challenges and ensure that the sector remains well capitalised and liquid. Thank you! BIS central bankers’ speeches  3
There is instead an underlying variable explaining why a person both sleeps with their shoes on and wakes up with a headache. We should also be aware that when plotting two variables against each other, it is very rare to expect to find a clear-cut correlation of the type we see in textbook illustrations. The reason is, of course, that the variables are not just linked to each other but are also constantly influenced by a number of other factors. For example, inflation can be affected by changes in energy prices that do not have any significant impact on unemployment. Unemployment can, in turn, be affected by reforms on the labour market, for example, which do not have any significant effect on inflation, at least not immediately. In other words, we cannot expect to see an exact relationship but often have to be content with just barely being able to detect one. On the other hand, the absence of a correlation that is visible to the eye does not mean that there isn’t one. It may still be there and be detectable only if we control for variables other than just the two we are studying. To gain a better understanding of what happens behind the scenes, therefore, we often have to delve deeper into the data, consider more variables and use more sophisticated analytical methods than “eyeball econometrics”. But studying exactly what the data looks like is always a good starting-point. So let’s now look at the figures!

So there is still much to be done on the CMU project and Brexit makes these issues even more pressing. Let me highlight a few initiatives. First, the European Commission signalled that it would make CMU a centrepiece of the forthcoming legislative agenda and has already set up a high-level forum, composed of experts from different industry sectors, which has started work on proposals for the next CMU Action Plan.2 Second, a high-level working group created by Germany, the Netherlands and France published a proposal to relaunch CMU in 2019.3 This proposal includes recommendations for generating long-term savings opportunities, developing equity markets, enhancing cross-border financial flows, and developing debt, credit and foreign exchange financing tools with a view to increasing the international role of the euro. Last but not least, there have been industry-led initiatives such as the CEPS-ECMI task force on rebranding CMU, which put forward a market finance action plan.4 These initiatives provide valuable input for the CMU agenda. Looking ahead, I see two areas where progress is particularly needed. First, capital markets remain subject to national rules and supervision. This hampers the crossborder provision of services. Further harmonisation, for instance in the area of insolvency and taxation regimes, is needed to foster integration in the euro area. Second, if the EU27 financial markets deepen, diversify and expand across borders, there would be a clear flipside: these developments would need to be accompanied by sufficient oversight and regulatory tools to avoid regulatory arbitrage or the build-up of risks in certain parts of the system.
Real interest rates may need to be higher than what we have seen in the period of “great moderation”. The costs will certainly be felt, but compared with the situation 30-40 years ago, the macroeconomic framework is now well established and central banks have accumulated credibility over a number of years as witnessed by fairly stable long-term inflation expectations. In this sense, the economy is now more robust to shocks and costs should be smaller. There is reason for us all to be braced for a negative supply shock of considerable magnitude in the years to come. If global warming is a threat to mankind – and much evidence suggest it is – then carbon dioxide (and other) emissions must be reduced. That will entail costs, real costs. Our future consumption path will be lowered, perhaps sharply. But as compensation we should have improved prospects for mankind. We have a choice however in how we go about reducing emissions: The efficient way, taxing emissions (or auctioning permits) and using the markets; or the truly costly one of trying to subsidise away the problems with highly uncertain results. The debate and actual efforts so far give only moderate hope of a good outcome. But let us be optimists – at least for the time being. To combat climate change, the relative price of fossil fuels must increase. This can be regarded as a negative cost-push shock. Is there a role for monetary policy here?

In a speech two weeks ago, British Prime Minister Gordon Brown proposed a new role for the IMF: “…its role should be to prevent crises and not simply manage or resolve them as in the past. And in a wider role the IMF, working with the global financial stability forum, should be at the heart of what we need – an early warning system involving regulators and supervisors in all countries for financial turbulence affecting the global economy.” 4  3  Financial Times January 26, 2008. 4  Speech at the Chamber of Commence in Delhi, 21 January 2008. BIS Review 14/2008  3  Obviously, there are pipelines that are not on our present maps. Also, our knowledge of what flows through the known ones is scarce. But would it help us if we knew? Would we be able to predict a looming crisis and thus prevent it? I do not have the answer to this, but I think it is fair to raise the question. We must expect turmoil in financial markets to occur from time to time. There will always be stupidity and greed, fear and euphoria (and some scoundrels). Accidents will happen. Authorities should strive to establish regulatory frameworks that give the right incentives for prudent behaviour. It is important to avoid overregulation that severely restricts markets and stifles innovation. We must of course make sure that obvious shortcomings in existing regulations are corrected.
An additional dimension of the monetary policy decision of last Friday is to clearly separate the implications for the MPR of recalibrating the monetary impulse in the face of the current configuration of structural parameters and economic variables, of the responses that might be necessary in the face of the evolution of macroeconomic conditions. As I have stressed in this presentation, the world economy is experiencing a delicate moment, where a declining phase of the cycle is combined with high policy uncertainty in the world's leading economies and where financial markets rely heavily—perhaps too much—on the will of the central banks to react to episodes of volatility. Although the world economy continues to grow, we note with concern the escalation and expansion of trade conflicts, a stagnation of international trade, deteriorating expectations and frequent episodes of market volatility. In these circumstances, as we have pointed out before, the Chilean economy, despite its commercial and financial openness, has powerful buffers, given by the exchange rate, the depth of the domestic financial market and the anchoring of expectations. However, it also has room for robust policy responses, particularly of monetary policy. Having solved the past imbalances of the MPR helps us identify future phenomena and apply the proper responses. On other occasions we have said that the Central Bank of Chile is prepared to face new challenges. Recent decisions include an additional element in this statement: the evidence that we have the capacity to identify important changes and react with the necessary speed.

Page 11 of 18  18  19  20  21  Figure 5 Working-age population forecasts 19  19  2018  18  18  17  17  16  16  15  Millares  (million persons, 2002-2050)  15 2014  14  14  13  13  12  12  11  11 02  05  08  11  14  17  20  23  26  29  32  35  38  41  44  47  50  Source: National Statistics Institute (INE). Table 1 Trend GDP growth forecast (percent) Trend growth (*)  Contribution to non-mining GDP growth  Total GDP  Non-mining GDP  Mining GDP  TFP  Labor  Capital  3.4  3.5  2.0  1.0  0.9  1.7  2019-2028  (*) Weighted mining is 11.9% of total GDP. VAT and import duties are assumed to grow a the same rate than non-mining GDP. Source: Central Bank of Chile.