samchain/econo-pairs-v1 huggingface dataset:
A tale of two workers So which of the twin-peaked outcomes facing the economy is most likely? An imminent burst of macro-economic sunshine? Or leaden-grey skies as far as the eye can see? Several factors have been put forward to support the secular stagnation hypothesis. They include rising levels of inequality, worsening levels of educational attainment, a rising debt overhang, lower prices for investment goods, rising levels of youth unemployment and lower levels of innovation (Gordon (2012), VoxEU (2014)). None should be dismissed lightly. But nor do these factors necessarily contradict the possibility of recovery in at least some parts of the economy. It is entirely possible that both poles may be in play – if you like, sunshine with showers – pulling the economy in opposing directions. Those polarising forces are well illustrated by developments in the labour market. Polarisation in the labour market has been a phenomenon since at least the 1980s, with a “hollowing out” of employment across the skill-distribution (Goos and Manning (2007) Goos et al (2009), Autor et al (2003, 2006, 2010), Sissons (2011), McIntosh (2013), Plunkett and Pessoa (2013)). Employment growth has been strongest among the highest and lowestskilled. But the casualty has been the mid-skilled, where employment has fallen. This structural shift is usually attributed to technological displacement of mid-skill jobs – for example, because of the automation and digitisation of certain tasks. For that reason, a “smiley face” employment pattern has been found across a wide number of countries when looked at in skills space.

Those distributional differences have, however, persisted and have if anything widened further. Despite having fallen by almost 10% since the crisis, real wages among the top 10% are still over 20% higher than in 1997. But wages for the bottom 20% have fallen by almost 20% since 2007 and are essentially back to where they were in 1997. These polarising forces in the labour market are also evident across industries (Chart 17). BIS central bankers’ speeches  5  Between 2001 and 2007, median annual wage growth across industries was 4% with a standard deviation of 1 percentage point. During 2014, average real wage growth has averaged 1% with a standard deviation of 2.5 percentage points (Chart 18). Wage dispersion has risen markedly. In some sectors wages are growing faster than before the crisis, while in others they are falling in both real and nominal terms. So while strong employment demand has helped sustain wages among the highly-skilled, it has not worked the same magic for the lower skilled. That begs the question – why? The most likely explanation is that rising demand has been more than offset by the rise in the supply of labour for these services. Several factors are likely to have been at play. First, displaced mid-skilled workers may have sought jobs for which they are over-qualified in order to stay in employment. In other words, they have moved down the skill distribution, placing downward pressure on wages. The crisis is likely to have reinforced these trends.
That is a challenge before us, and I’m asking all of you to join in this effort to try and redefine the scope of everything we do in the Central Bank, to see that we reorient ourselves towards winning peace in the broader sense, to making the financial sector, the economy and other types of institutions in this country work in an effective manner that can raise the growth, the potential of this economy, raise the skill levels, and most importantly, bring about that ethnic harmony which I think has been amply demonstrated here today in-terms of all religions and faiths coming together and propagating the message of peace and goodwill, at the same time hoping for a better Sri Lanka for us, our children and grandchildren. So with that simple message, I thank you very much for all your efforts. I think the last six months for me have been a very steep learning curve, coming back and reorienting myself with this institution, which is very dear to my heart. I have observed tremendous improvement, in-terms of several processes that were never there when I left this institution in 1993. I find that there is still more to do but I think Sri Lanka as a country has a great potential. We are geographically situated in a location which is at the center of the fastest growing population cohort, globally. As you know, the last twenty to thirty years were the era of China. China grew massively because it had a very fast-growing population.

Nor Shamsiah Mohd Yunus: Trust and integrity key principals of Malaysia central bank’s first governor Welcoming remarks by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Commemoration of the Centennial of Tun Ismail Ali’s Birth, Kuala Lumpur, 8 October 2018. * * * Trust and integrity. These were the key principles of the man who built Bank Negara Malaysia and shaped the nation. Some remember him for establishing institutions that form the economic pillars of modern Malaysia; some remember him for his contributions to the nation and the financial system. Some may remember him as family, or a good friend. Not all had the privilege to meet him, but all remember Governor Ismail Ali as a paragon of trust and integrity. Despite being the hands that shaped Malaysia’s early history, little has been written of Governor Ismail Ali. Stories of his discipline, thrift and dedication only passed through word-of-mouth, rarely put to paper. His wisdom and experience, whispered from ear-to-ear, risk being lost to the winds of time. It is my great pleasure to welcome you today. Indeed, it is our privilege to have Prime Minister Tun Dr. Mahathir to grace today’s event and Tun Dr. Siti Hasmah Mohd Ali to deliver a special tribute speech. Few may know that Governor Ismail Ali is the brother of Tun Dr Siti Hasmah and the brother-in-law of our Prime Minister.
Filled with pride for the economic development of our country over the past decade, we must now concentrate more on the future. Estonia’s goal is not only the sustainable economic growth target of 5.5-6 per cent per annum but also the preparedness to join the European Union and to make maximum use of the opening opportunities. What should we then focus on especially? B.1  Challenges facing Estonian economy on its way to the European Union - overall economic policy stance  Estonian economy is already strongly integrated into the European economic area. From the perspective of the central bank I would like to refer to the clear convergence of the interest rate fluctuations and inflation cycles in Estonia and the European Union. The share of current and future EU member states in Estonia’s export is about 81%. In 1994-2001 Estonia’s export to the European Union increased on the average 25% per annum. Our exports to the European Union have steadily grown quicker than imports from the European Union. It means that we have been steadily increasing our market share in the European Union - although it is small. The export structure also characterises our competitiveness - exported goods reflect changes that have taken place in the economy. Our traditional export items are timber, textile and foodstuffs, but also, for example, parts and components of electric motors, cables, mobile phones, antennae and the like.

I am positive that, like in the banking sector, the society will benefit from this. It will result in more efficient production, lower prices, better service quality and curb the power of the monopolistic producers. To date, as in the early 1990s, we again face the question of what is the right fiscal policy. Of course, today this problem is raised in a slightly different way. But, in essence, it is the same question - what fiscal policy shall ensure the stable development of the Estonian economy within the fixed exchange rate regime and as part of the euro area. I shall return to this question towards the end of my presentation. Thus the economic policy key issues we are facing in the beginning of the 21st century resemble in many aspects the problems we tried to resolve in the beginning of 1990s. We have achieved progress in finding solutions to some of the problems, others have remained unresolved. One thing is clear - undue postponement of tough issues is no good to anybody. If we want to be treated as equal partners in the European Union, if we want to sustain the rapid growth rate and  2  BIS Review 51/2002  growing income level, we must tackle these problems with similar resolution and energy we did 10 years ago. B. Challenges facing Estonian economy on its way to the European Union - internal policy  So - what are today’s and tomorrow’s challenges facing Estonian economy?
Iceland’s overall level of debt has grown to an uncomfortable degree, and the CDS spreads of Icelandic banks have reached exceptional heights despite their excellent capital adequacy ratios, their steady history of profitability, and the improvements they have made in their funding procedures relative to, for example, two years ago. The present credit crunch and difficulties in the market are far from being uniquely Icelandic; they are a global phenomenon, and the recent turnaround seems to have taken everyone by surprise. When the current problems reared their heads in mid-2007, many  2  BIS Review 36/2008  clung to the hope that these headwinds would be short-lived and soon pacified. The general feeling seems to have been that there was still a glut of capital around the world, and that the temporary distrust in the market – even a sort of misunderstanding of the market – would vanish as soon as it became clear that the sub-prime mortgage market in the United States, despite its scope and size, was only a drop in the proverbial ocean of international finance, and that cheap capital must surely be unleashed anew and the Utopian dream would take the market in its arms once more. At which point, all would be happy once again and all unpleasantness a forgotten dream.

Fritz Zurbrügg: The financial crisis in its sixth year – an end in sight? Speech by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Zurich, 21 March 2013. The complete speech can be found in German on the Swiss National Bank’s website (http://www.snb.ch/en)  *  *  *  In this, the sixth year of the financial crisis, the situation on the financial markets has eased considerably. Is what we're seeing the prospect of an end to the crisis, or is this just a flash in the pan? Measures by central banks made a major contribution to stabilising the financial sector. This sector, however, is just a part of the whole, and while its stability is a precondition for sustained global economic growth, it is by no means a guarantee. The positive mood in the financial markets and leading economic indicators raise hopes that a recovery is underway. If these hopes are to be realised, however, structural reforms need to be implemented. The three most significant challenges for the global economy are increasing the resilience of the financial sector, improving the flexibility of labour and goods markets (especially in Europe), and consolidating the public finances of the advanced economies. Progress has been made in all three areas. The way ahead, however, is still both long and difficult. Due to the relatively lengthy period of weak growth, there is considerable danger that reform fatigue might spread in those countries most severely affected.
Following a further depreciation in the currency, rises in administered prices and the prospect of continued weak growth in productivity, inflation was thought “likely to remain above target for much of the forecast period”. But “attempting to bring inflation back to target sooner…would risk derailing the recovery” and it was therefore “judged appropriate to look through the temporary, albeit protracted, period of above-target inflation”. I don’t think this was so exceptional. There is no inflation-targeting monetary authority that behaves so rigidly as to attempt to offset all shorter-term shocks to inflation, no matter the effects on the variability of interest rates and output. As the economist Lars Svensson puts it, “in practice, inflation targeting is always ‘flexible’, because all inflation-targeting central banks not only aim at stabilizing inflation but also put some weight on stabilizing the real economy”. In the UK, this regard for the occasional trade-offs faced by monetary policy, and their implication for the planning horizon, was formally enshrined in the MPC’s remit in March 2013. The Committee is now required to “promote understanding of the trade-offs inherent in setting policy and… [to communicate] the horizon over which it is appropriate to return inflation to the target”. This description of the appropriate horizon is now a regular part of our communication, notably in the newly introduced Monetary Policy Summary that introduces both the Inflation Report and the Minutes of our meetings. What of the current situation?

If the central projection’s a long way from target, that can tell you something about the MPC’s view of the suitability of the yield curve – given, at least, all the other assumptions in its forecasts. In May 2009, after the first slug of QE, the Inflation Report forecast was well below target. This suggested that, unless the economy improved much faster than it expected, the Committee believed that monetary conditions would need to be looser than implied by the yield curve at the time. As things turned out, that’s exactly what happened. But there are limits to how far this kind of reasoning should be taken. One particular problem, when it comes to the so-called “lift-off” date for interest rates, is that the yield curve is currently very flat. As a result, even relatively moderate changes in forward rates, prompted by unexceptional news about the economy, can result in big shifts in the date at which the yield curve first reaches some particular level. But that doesn’t mean the MPC’s views about future policy have moved so dramatically. If nothing else, this demonstrates the problem with focusing too obsessively on that particular date. More generally, the MPC’s inflation forecast is a far from perfect indicator of interest rates. It involves lots of conditioning assumptions, not just forward interest rates, and any of these can change. Our understanding of the economy evolves over time and the economy itself is always subject to unforeseeable shocks.
BIS Review 68/2004  3  Crisis management No matter how good we are at overseeing the financial system - and how well we succeed in making it more robust without losing too much efficiency - it is impossible to completely eliminate the occurrence of crises. We therefore need to be prepared to manage a crisis if one should nevertheless occur. If a crisis occurs, it is necessary to assess the scope and consequences as quickly as possible and to take the right measures to reduce the potential problems. We do not want a repeat of the dilemma faced by the Riksdag in 1992. The Riksbank can provide emergency liquidity assistance to a bank suffering problems. The requirements for this are that the problems are so serious as to threaten the stability of the system and that the bank is sufficiently sound to be able to survive in the long term if given assistance now. In other cases, the Riksdag decides whether or not financial support should be given, as tax-payers may be affected. One difficulty is determining whether a bank fulfils these requirements in a crisis situation, when there is often considerable confusion and everything happens so quickly. By being well-prepared we have the possibility to decide whether or not a bank should receive assistance from us. The enormous flows in the payment system mean that all banks are dependent on being able to receive incoming payments in order to send their own outgoing payments.

This process has, in the past five years, notably improved the sector’s position in terms of basic metrics such as asset quality and profitability and solvency levels. This has come about against the background of the correction of structural imbalances, built up on bank balance sheets during the pre-crisis upturn. Arguably, the cause and, largely, the effect of the formation of these imbalances was excess capacity in the development of Spanish deposit institutions’ business. 3/15  We can observe the scale of the adjustment that has come about, both in the volume of banking activity and in the total volume of lending to the resident private sector. From its June 2009 peak, when the stock of lending practically amounted to € trillion, to the present day there has been a reduction of almost 40% in volume, i.e. of over € billion. In terms of GDP we have moved into line with the European average. Also, the excessive dependence on external financing has been corrected; specifically, the Spanish economy’s net debtor position has declined from accounting for almost 100% of GDP in 2014 to 77.1% of GDP in 2018. The consolidation process, which began in 2009, has entailed a reduction of more than 30% in the number of institutions. The most striking impact has been on the former savings banks, of which only two have survived, although another seven have converted into banks.
At our last monetary policy meeting, we upheld the assessment that inflation will converge to levels that are below, but close to, 2% over the medium term. Wages are picking up at a pace that is more or less in line with expectations from our models. One thing that has not worked out as expected is the transmission to consumer prices. This pass-through is not working in line with projections. We are analysing this very carefully. But we remain confident that it will eventually do so; we need to be patient and persistent. But what if the economic outlook deteriorates further and more permanently? In our baseline scenario, capacity utilisation will remain high and firms will be in a position to pass higher wages through to higher prices. That would be more difficult if growth remained below potential. Downside risks to growth could then lead to downside risks to inflation in the medium term. We are not at that stage yet, but this will be an important discussion point at the next meetings of the ECB’s Governing Council. But if the outlook becomes gloomier, what will happen then? Will the ECB’s Governing Council be even more careful in continuing on its cautious path towards monetary policy normalisation or could there be another turn towards more easing? I have never spoken about a normalisation of our monetary policy stance. I have always referred to a normalisation of our instruments. There is a big difference.

In such a context there is a risk that the banks could act even more procyclically than they usually do and would amplify the cycle. To be clear, the uncertainties and the economic slowdown have so far not caused banks to tighten their lending conditions or to grant less credit. But we need to keep a very close eye on how this evolves. How will the banks behave if the economic slowdown continues? Would you say that financing conditions in the euro area as a whole have already tightened significantly? Financing conditions have tightened somewhat in recent months, but not significantly, thanks in part to our forward guidance on interest rates. This partly compensates for such effects. But you’re absolutely right, we as central bankers must always ask ourselves whether our monetary policy stance is appropriate for us to attain our objective. And what is your answer at the moment? We have revised our assessment of risks to growth downward. I would say that is a clear indication that the level of alert is higher than before. 2/5  BIS central bankers' speeches  Three quarters of below-potential growth, higher risks and at least slightly tighter financing conditions – what does that signify for the inflation outlook? Is the ECB’s Governing Council losing its confidence in reaching the target of 2% over the medium term? Three quarters of below-potential growth are certainly not good news. But we have a medium term perpective.
All these phenomena push the borders of informality further and reduce the monetary policy efficiency. It is the financial system’s duty and responsibility to make all its efforts in co-operation with the Bank of Albania and other Government authorities to find the solution to these problems. In conclusion I would like to say that as a result of the reforms undertaken, the Albanian banking system, being the most dynamic part of the financial system, has made significant progress during the last years. This progress results from the clear visions and seriousness shown by the Albanian authorities in reforming the banking sector, the fruitful co-operation these authorities have had with the international financial institutions such as the IMF and the World Bank for designing medium-term strategies and developing this sector further. This progress is also a result of the numerous challenges the Albanian banking system has been faced with over the recent years. It may be concluded that the Albanian banking system is presented safe, sound, under a constant reformation and consolidation process. It is going through a new stage, which will provide to the business and the banking clients modern banking services, aiming to reach the western banks’ standards. ¨ With regard to the aspirations of the Albanian economy and strategies to be employed for its further opening to foreign investors, we believe that these undertakings will have a positive impact on the country’s macroeconomic, technological and institutional area.

The banking system’s stage of development and the FDI flows in economy have mutual influences on each other. Hence, if Albania attracts stable and long-term FDI flows in the following years, their impact on the further development of the financial system will be considerable. Furthermore, the demand for banking products both from domestic and foreign companies will grow. 4  BIS Review 102/2007