samchain/econo-pairs-v1 huggingface dataset:
Global real interest rate and Swedish real interest rates from a historical perspective 3(a ) Global real interest ra te  3(b) Swedish real interest rates  6  10  Real interest rate, 2 years Real interest rate, 5 years Real interest rate, 10 years  Global real interest rate, 10 years, weighted average (GDP)  8  5  6  4  4 3  2 2  0  1  -2  0  -4  87  91  95  99  03  07  11  15  87  91  95  99  03  07  11  15  Note. Per cent. The broken trend line has been calculated using the HP filter. Real i nterest ra tes a re ca l culated as nominal government bond yi elds minus actual i nflation. The calculation of the global rea l interest ra tes includes the euro a rea (as of 1995), Ja pan, Ca nada, the United Ki ngdom and the Uni ted States. Sources: Bureau of Economic Analysis, Eurostat, Japanese Statistics Bureau, Ma crobond, OECD, Offi ce for National Statistics, Statistics Sweden and Statistics Ca nada  Falling global real interest rates can be caused by secular stagnation... Research provides several different explanations for the falling trend in global real interest rates.3 The explanation that has probably received the most attention recently is the theory of secular stagnation, developed by the American economist Lawrence Summers.

Even though, in the past, the ECB didn’t seem too shy about going into such detail? There is a European tradition – different in this respect from, say, the U.S. – of central bankers being more outspoken, when they feel it can be useful. At the ECB, we feel it is legitimate to speak our mind and explain what is needed to make the euro work better. But what we can’t and shouldn’t do is go into the detail of what should be government policy. Mario Draghi, in his last press conference, described the concept of “helicopter money” – the idea that the central bank could finance economic agents directly – as “very interesting”. Is that something the ECB is debating? BIS central bankers’ speeches  1  No. As an economist, of course I find the academic discussion exciting. It is good that academics force us to think outside the box. But as a policymaker, as interesting as it may be, helicopter money is not currently part of the discussion in the Governing Council. If we decided to get into that discussion, we would have to deal with many questions, such as: how exactly would it work in practice? How would “helicopter money” fit within our monetary policy? And finally and most importantly, how do we make sure it doesn’t cross the line between monetary and fiscal policy? To be honest, I don’t see how it could work without some kind of risk-sharing with governments, which could be practically and legally problematic.
The current debate sometimes gives the impression that the Swedish economy has for some time been in a situation of almost overheating. But the fact is that we fairly recently, according to most empirical estimates, once again attained a level of resource utilisation that can be described as normal. Thus, although such estimates are uncertain, the Swedish economy appears to have been producing below, rather than above, its long-term capacity for several years following the financial crisis. 6 [20]  Confidence in the inflation target unimportant or possible to maintain with a different policy? One thing that is rarely done, but I think is of utmost importance, is to spell out the practical consequences of this criticism. It is of course easy to agree that if the Riksbank had not needed to defend confidence in the inflation target, then monetary policy would not have needed to be so expansionary and the repo rate would perhaps not have needed to be negative. One may therefore draw the conclusion that those who say that monetary policy is wrong are arguing one of the following: Either that confidence in the inflation target is not so important, or at least less important than other things, or that the Riksbank should have been able to conduct a less expansionary policy while still being able to safeguard confidence in the inflation target.

The criticism lived on for quite a long time, but it was probably quite essential to demonstrate at that time that the inflation target was taken seriously. This was until now the only time I can remember that the Riksbank was urged not to do its best to maintain confidence in the inflation target. The criticism then was largely due to the inflation-targeting policy being so new – as I said, the inflation target had not yet even come into force. It is less easy today, after twenty years of positive economic developments, in which the inflation target has been a cornerstone, to see why the Riksbank is being urged to lower its ambitions. Perhaps it is because developments have been so positive for so long that one feels the existence of a credible nominal anchor is no longer as important. If so, I am convinced that this is a mistake. Difficult to see reasonable alternatives to the policy conducted But what about developments in household debt and housing prices? Don't they give a reason for changing monetary policy? The Riksbank has previously used the repo rate to try to subdue the upturn in debt and housing prices. But this was on a fairly modest scale and – above all – during a period when confidence in the inflation target appeared firmly rooted. 9 In recent years, on the other hand, there have been signs that this confidence has begun to be undermined, which has changed conditions rather drastically.
Over the next few years, the return on the Pension Fund is expected to rise roughly in line with government expenditure on retirement pensions through the national insurance scheme. Revenues from petroleum activities will nonetheless gradually decline, pulling down growth in the Fund. Over time, therefore, the national insurance scheme’s retirement pensions will grow considerably faster than the expected real return on the Fund. (See Chart: Generational account.) However, it is wrong simply to compare the Pension Fund and obligations under the national insurance scheme. The government has the option of taxing households and businesses, and this naturally also has a considerable net present value. Generational accounts allow for this. These accounts show whether there is a need to raise taxes or lower expenditure for the government budget to balance in the long term, based on forecasts for benefit and pension payments and oil revenues. The generational accounts reveal that there is currently a need for fiscal tightening equivalent to 10 per cent of GDP or of the order of NOK 200 billion. Longterm forecasts from the Ministry of Finance, that also take the pension reform into account, show a shortfall of around 6 per cent of mainland GDP. Calculations by professors Alf Erling Risa and Erling Vårdal here in Bergen paint a similar picture. The need for fiscal tightening roughly corresponds to current spending of oil revenues. Estimates of this kind are highly  16  Revised National Budget 2010.

On 2 May, agreement was reached between Greece, the IMF and the other euro area countries on a three-year loan package with a maximum limit of EUR 110 billion. The agreement included a comprehensive IMF adjustment program. Greece has borrowed approximately EUR 30 billion from the IMF and the euro area countries since May. Other European countries with weak public finances were also being scrutinised and there was a risk of contagion to the banking system in Europe, which was behind many of the loans. On 10 May the EU and the European Central Bank announced extensive support measures for EU countries, including the European Financial Stability Facility, which can provide loans to countries in difficulty up to a total limit of EUR 500 billion, with additional loans of up to EUR 250 billion made available by the IMF through its program facilities. Countries may draw on these loan facilities provided that taxes are increased and expenditure cut so as to enable the country to gradually become self-supporting. At the same time, the European Central Bank began to buy government bonds, which had become difficult to trade on the market, enabling markets and monetary policy to function more effectively. Economic history shows that periods of surging corporate and household debt and sharply rising property prices often precede banking crises. The fates of banks and states are inextricably linked. Banking crises usually lead to fiscal crises. Similarly, weak government finances will undermine banks’ financial position. 1 Crises are costly.
Thirty Years of Hurt, Never Stopped Me Dreaming Speech given by Andrew G Haldane, Chief Economist and Member of the Monetary Policy Committee  Institute for Government 30 June 2021  The views (more so than ever!) are not necessarily those of the Bank of England or Monetary Policy Committee. I would like to thank Andrew Bailey, Nick Butt, Shiv Chowla and Mette Nielsen for comments, Jack Meaning, Sandra Mills and Sarah Saunders for help in preparing the text and hundreds of Bank colleagues over several decades for their support. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  THIRTY YEARS OF HURT, NEVER STOPPED ME DREAMING At the end of September I leave the Bank of England, 32 years almost to the day since I joined. Most would say that is a decent stint, but in Bank terms it is just really getting started. My personal assistant, the brilliant Sandra Mills, has just completed 44 years. The Bank’s company secretary, John Footman, is just about to clock 52 years. I never was a completer-finisher. It has not, of course, been 30 years of hurt.1 I have loved almost all of my time at the Bank. I promised myself one thing when I joined - that I would only stay as long as it was interesting. It has been interesting for 32 years. Events made it so. And it remains no less interesting now.

Those SME financing fault-lines have been clearest at times of financial stress. During the Global Financial Crisis, many UK SMEs struggled to access bank credit on reasonable terms or, in some cases, at all. Constrained credit to companies was, in turn, a potent factor behind the UK’s anaemic subsequent recovery. These same fault-lines were re-exposed during the Covid crisis. The good news, this time around, was that large numbers of loans – in excess of one and a half million of them – were made to UK businesses by UK banks in the space of a few months. The bad news is that the vast majority of these loans would not have been made at that speed without a 100% guarantee from Government. Only by effectively nationalising SME lending were the Macmillan gaps bridged in crisis. Over the years, several initiatives and institutional fixes have been attempted to close the Macmillan gaps. These include the British Growth Fund (BGF), the British Business Bank (BBB) and Innovate UK. While individually helpful, none of these has had either the scale financially, nor the scope regionally, to close the Macmillan gaps. Fintechs, using new data and new technologies, have sought to bridge these gaps with some success but, realistically, are likely to do so only slowly. To my mind, what is needed to bridge the Macmillan gaps, durably and comprehensively, is the equivalent of a UK Development Bank, operating on a decentralised basis.
And house prices and consumer confidence do seem to be closely correlated. So house prices may be a leading indicator of sentiment about the economy and hence of consumption and domestic demand. But, just like equities, house prices also reflect changes in real interest rates. Since long-term real interest rates have fallen from over 3½% to below 3% over the past year, it is not surprising that house, and other asset, prices have risen. Precisely because housing is an asset, its price is more volatile than most goods and services in the retail price index. As such, it is important to look at house price levels as well as at their rates of change. Although house prices have been rising quite rapidly over the past couple of years, they returned to the peak reached in the late 1980s only at the end of last year, and exceeded it for the first time in the first quarter of this year. That, of course, followed the sharp fall in house prices in the early 1990s - house prices fell by over 10% between 1990 and the end of 1992. For most families, apart from future earnings and pensions, their wealth is dominated by one asset and one liability. The asset is their home and the liability is the mortgage on it. But the difference between these two is sensitive to the state of the economy. In a low inflation world, house prices are likely to rise and fall whereas the mortgage liability is fixed in money terms.

So members of the Committee vote on interest rates according to the economic data, which change from month to month, and the analysis of those data. No one takes a position that higher interest rates are a good or a bad thing out of principle. If you drove past an infant school at 40mph, you might well be described as driving dangerously fast. But if you drove at 40mph on a motorway, you might well be described as driving dangerously slowly. Actions must be judged in the light of the circumstances. In terms of monetary policy, that means that the positions which members of the MPC take on interest rates will change over time according to the way the economy evolves. But if interest rates themselves cannot be predicted, because they depend on changing economic data, what should be predictable is the way MPC members respond to those data. A predictable “policy reaction function”, to use the jargon, should, over time, diminish the interest which market commentators take in the meetings of the MPC and direct that interest to what is happening in the economy. So, as the voting record shows, it is seriously misleading to think of the MPC in terms of fixed camps of “hawks” and “doves”. As circumstances change, it is easy to imagine that the “hawks” shall be “doves” and the “doves” shall be “hawks”.
The former is a good illustration of the difficulty for independent bodies to deal with multiple policy mandates and/or the distributional effects of policy decisions, which involve choices that are normally expected in the political process but not easy to tackle by nonelected officials. This was particularly exposed during the GFC, given the perception of unfairness in the distribution of the burden of the crisis and the actions to contain it. Even success of independent central banking has come at a price. Controlling inflation has made the latter less of a concern to citizens and politicians. The effectiveness of central banks in securing macro and financial stability in the post-crisis years may have also removed responsibility from other actors and may have encouraged markets to rely too much on central banks as risk managers. The current wave of political populism is a further source of risks. Threats to central bank independence usually do not come from the public but from political leaders that resent distributed governance as well as checks and balances. In the last few months, we have witnessed a number of attacks on central bankers for coming in the way of ambitious populist agendas. Independence and credibility This is a good reminder that independence of central banks cannot be taken for granted. No matter how deeply it is ingrained in the law, independence can always be taken away or significantly undermined, de facto or de jure.

Philipp Hildebrand: Financial market turbulence and the economic outlook Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Handels- und Industrieverein des Kantons Bern, BurgdorfEmmental section, Burgdorf, 25 October 2007. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  It is very difficult to assess how the shifts in the credit markets triggered by the US sub-prime mortgage market will impact on the real economy. As a result, the uncertainties with regard to the economic outlook have increased considerably. The evaluation of structured credit products, some of them very complex, is based on models. Because of the difficulties this evaluation poses, the market for such products gradually disappeared. The uncertainty as to the degree of exposure of individual banks in the structured credit market led to illiquidity in the unsecured interbank market. Central banks around the world have reacted to this unusual situation with injections of liquidity. An adequate supply of liquidity to the economy is essential for our economic system to function. A favourable aspect of the situation was the fact that the credit market turbulence occurred at a time when the global economy and the Swiss economy were both in good shape. BIS Review 121/2007  1
Recent developments and outlook for the Spanish economy Turning to the Spanish economy, so far in 2018 the expansionary phase has continued, albeit at a lesser pace than in previous years. Real GDP growth stood at 2.5% year-on-year in the third quarter, following increases equal to or higher than 3% in the three preceding years (see Chart 5). This slowdown in growth, which the Banco de España has been anticipating in recent quarters, is partly in response to the international environment, where developments have been somewhat less positive this year, as I previously described. In any event, the baseline scenario for growth in the Spanish economy in the coming years is consistent, as it is in the 4/14  euro area as a whole, with growth rates running above potential and, therefore, with an increasingly positive output gap. As to consumer prices, the dynamics continue to be greatly affected by the fluctuations in the energy component (see Chart 6). The latest available figures, for October this year, show a year-on-year increase in the overall harmonised index of 2.3%. However, core inflation remains moderate, at around 1%. As from the final stretch of the year, a progressive reduction in the contribution of the energy component is projected, which will tend to be offset by the gradual strengthening in the core component, in step with the foreseeable widening of the positive gap between actual and potential output. Spanish economic activity continues to be underpinned by easy financial conditions.

For instance, Zambia, has successfully managed to stabilize the key macroeconomic variables. For the first time in 30 years, inflation managed to fall to its lowest levels while the exchange rate has been relatively stable whilst reflecting market fundamentals. Further, the lending interest rates have been declining in response favorable macroeconomic environment. Notwithstanding the improved macroeconomic environment, the Zambian Government is aware and committed to resolving the remaining challenges facing the banking and financial services industry. Accordingly, Government adopted a 5-year Financial Sector Development Plan (FSDP), which aims, amongst other things, at promoting the development of a stable, sound and market based financial system. One of the key recommendations of the FSDP is establishment of a credit reference bureau in order to improve the credit culture in Zambia. In June 2006, the Bank of Zambia licensed one company to provide credit referencing services and commercial banks are concluding a service level agreement with this company that will allow the bureau to serve as a clearinghouse for credit history information and promote the ability of lending institutions to share both positive and negative data about their borrowing customers. BIS Review 36/2007  1  Ladies and Gentlemen, this development will address one of key structural problems that the baking sector has faced for a long time.
The Governors look forward toward greater collaboration between WAIFEM and these institutions in the years ahead. On this note I have the honour to declare the course open. I thank you for your attention. BIS Review 79/2006  3

The Government’s efforts need to be complemented with a better utilisation of savings accumulated by the private sector. The Malta Development Bank can help in this regard, by identifying gaps in the financing of viable projects and partnering with financial intermediaries and other stakeholders to develop financial instruments that can finance them. Apart from infrastructure bottlenecks, international institutions that monitor the business environment flag other areas that warrant immediate attention. While we have significant  reservations on a number of methodological aspects underlying such surveys, we also share the view that in some areas we do need to step up our efforts very considerably. This is notably the case as regards the efficiency of court proceedings. Although the time it takes to resolve court cases has more or less halved since 2010, it is still among the longest in the European Union. Other challenges we need to address concern the length of procedures to set up a business, the low educational attainment level relative to our peers and a limited capacity to innovate. These are essential elements that support investment and productivity. The development of an intelligent online business portal which ties all Government business-related services into a one solid platform should put businesses in a better position to do business. The new legislation in the area of digital innovation provides the legal framework for business to embrace disruptive technologies.