samchain/econo-pairs-v1 huggingface dataset:
Unemployment is instead determined in the long run by how well the labour market functions, for instance, with regard to matching unemployed persons and job vacancies. My main message here is that there is no clear-cut and stable relationship between inflation and unemployment, either in the long term or the short term. Simplified relationships between inflation and unemployment, such as the short-term and long-term Phillips Curves, may function as pedagogical tools. However, this type of simplified relationship is not practicable in determining how monetary policy should be conducted. Nor can such simple relationships be used to analyse to what degree monetary policy has contributed to higher or lower unemployment. Monetary policy is based on forecasts Let me go on to the next issue I intend to take up, namely the conditions under which monetary policy is conducted. This is an important aspect of a discussion of how far monetary policy can be considered to have contributed to higher unemployment. As monetary policy has an impact on demand and inflation with a time lag, the Riksbank must base its interest rate decisions on a forecast of future economic developments. All forecasts are uncertain. One therefore cannot expect that the Riksbank will always be able to exactly predict what will happen in the economy. It is also difficult to quickly bring inflation back on target once a deviation has occurred. This may also be unsuitable for real economy reasons.

The analyses made of why inflation has been so low in recent years indicate that it is primarily unexpectedly high and lasting growth in productivity that is the explanation and not contractionary monetary policy. 2 One factor that supports this conclusion is that inflation has been low despite demand and growth in the economy being relatively high. But the higher labour productivity has meant that companies have been able to increase their production without needing to raise their prices so much. It would also appear that it has contributed to companies being able to increase production without needing to recruit new staff to a great extent. This may be an explanation to what is referred to in the debate as “jobless growth”. The high productivity growth has also contributed to the Riksbank being able to cut the interest rate to a historically low level. My conclusion is therefore that we have first and foremost overestimated inflation because we have underestimated the strength of productivity growth. Giavazzi and Mishkin observed in their evaluation of monetary policy that this has also applied to most other forecasters. We have therefore not overestimated inflation because we have failed to take into account developments in the labour market. Nor is it because our monetary policy decisions have been unreasonable. This was also noted by Giavazzi and Mishkin in their evaluation. Nevertheless, there is of course reason for the Riksbank to be self-critical. We must become better at understanding the driving forces behind productivity growth.
As you can see in the programme, there will be three sessions which will take up each of the topics I have just addressed. Each session has been organised as a panel discussion so as to facilitate the presentation and exchange of different views, with three panellists from both sides of the Atlantic. After each panel, we have allotted sufficient time for an open general discussion. Finally, at the end of today’s proceedings, President Trichet will make the closing remarks of the Seminar. I hope we will have an intense and very productive day’s discussion. Without further delay, I give the floor to my friend Governor Carlos Costa, who will chair the first session of the seminar on global rebalancing. Thank you  BIS Review 172/2010  5

However, this could be at the cost of an even larger adjustment further ahead to bring down inflation expectations again. This was what happened in Sweden in the 1970s and 1980s. Although economic downturns cannot be avoided, fiscal and monetary policy can be conducted in such a way that the consequences for the economy are as small as possible. The impact of monetary policy is long-term and it is therefore important that confidence in the Riksbank's ability to stabilise inflation is maintained. This does not prevent us from taking into account developments in the real economy when we make our decisions on the repo rate. The Riksbank conducts what is known as “flexible” inflation targeting. Our aim is that inflation, when it deviates from the target, will normally return to the target level within a couple of years. If the shocks affecting the economy entail large deviations, it may take longer before the target is achieved in order to attain a smoother sequence of events for production and employment. When we were to make a decision on the interest rate in September, we faced a situation where the declining economic activity in Sweden and abroad needed to be placed in a context where many factors could conceivably affect inflation. The slowdown in economic activity has probably had a subduing effect on inflation. However, we have seen that economic cycles are not sufficiently regular to enable us to forecast how profound or prolonged a downturn will be.
Since, in a cross-border resolution of a G-SIB, it is in the interests of both home and host resolution authorities that key subsidiaries that are not themselves resolution entities do not formally enter resolution, and instead resolution tools are applied only to resolution entities, this will incentivise cooperation between home and host and reduce incentives to ringfence assets locally in an uncooperative manner. So, if there is sufficient GLAC of adequate quality that is distributed appropriately within G-SIB groups, we will have made a further, major step in making G-SIBs resolvable and ending TBTF. Again, let me emphasise the importance of disclosure at the legal entity level. It is important that investors in GLAC, and creditors of G-SIBs generally, can identify their place in the creditor hierarchy and therefore better estimate their expected losses should resolution become necessary. This will reduce moral hazard, improve certainty of outcomes in the event of failure, and so incentivise investors to ensure the firms they are investing in are run in a prudent manner. Conclusion I want to emphasise just how much progress has been made in last three years: resolution regimes and authorities are now in place where there were none previously in many countries. Resolution planning for systemic banks is taking place in Crisis Management Groups and will soon be taking place in EU resolution colleges too. We look forward to the guidance and technical standards from the European Banking Authority on how resolutions will be transacted.

This cluster, accounting for 17% of GDP, comprises retail and food services as well as construction activities. The real estate and retail segments will be weighed down by subdued consumer sentiment and the shift to overseas retailers via e-commerce. Public construction will be supported by infrastructure projects, such as the ongoing extensions to the rail network, but private construction is likely to remain subdued. Inflation has come in within expectations. Both core and headline inflation are on a modest uptrend but underlying price pressures remain benign. MAS Core Inflation is projected to average 1-2% in 2017, up from 0.9% in 2016. The rise in core inflation since Q4 2016 has largely reflected higher prices of oil-related items. Domestic sources of inflation remain contained partly because the pass-through of business costs to consumer prices has been quite weak. CPI-All Items inflation is expected to come in at 0.5-1.5%, up from −0.5% last year. Accommodation cost will likely continue to exert a drag on headline inflation Generalised demand-induced price pressures have been relatively muted for some time. But MAS is closely watching developments for the rest of this year, especially if upside risks to GDP growth materialise. MONETARY POLICY The current neutral stance of monetary policy has helped to stem disinflation pressures in the economy. MAS has adopted a 0% p.a. appreciation path for the $ policy band since April 2016. This neutral stance has facilitated a turnaround in headline CPI inflation, which had been negative for 24 consecutive months.
When we probed survey respondents about their understanding of changes to “prices in general” (the Michigan Survey question), we found that a significant fraction believed we were inquiring about the prices they themselves recently paid – often prices that had increased or decreased markedly, such as those for food or gasoline. This tendency to think more about prominent price changes in one’s own experience is less common among respondents with higher financial literacy. By contrast, when we asked about expectations for the “rate of inflation,” respondents tended to think less about a few salient price changes specific to their own experiences and more about price changes across a broader set of items or about changes in the cost of living – a result that aligns more with economists’ definition of inflation as a sustained increase in the overall price level. Asking about the rate of inflation directly therefore produces answers more consistent with the concept of forward inflation expectations of interest to central banks. Chart 4 plots the time series of median responses from our experimental survey to a “prices in general” question and a rate of inflation question. One can see that the median expectation for the rate of inflation question is less variable. We also find that the dispersion of responses is significantly larger with the “prices in general” question.

The risk of fast deterioration in investor sentiment in emerging economies is high, given that the uncertainties about the strengthening of global economic growth and international trade are still significant, amid the risks arising from economic and monetary policies, the build-up of structural imbalances in the emerging economies and heightening geopolitical tensions. An abrupt adjustment of the risk premium attached to emerging economies may trigger sizeable negative consequences on the domestic environment. This is, in fact, the credit risk, or the risk of an increase in interest rate, stemming from the monetary policies of the advanced economies, the external uncertainties and the way the market reacts to these. Against this background, credit risk refers to an increase in the cost of foreign funding for both the Romanian government (Figures 19 and 20) and the banking and corporate sectors. It is noted that, in recent months, this risk has already started materialising. The Federal Reserve initiated the monetary policy tightening cycle. The Bank of England decided to increase the bank rate, which, in spite of keeping the real rate strongly negative, may act as a signal – especially amid growing uncertainties about Brexit. In one of the peer economies in the region, the Czech National Bank raised the policy rate twice – under special circumstances, after exiting from the exchange rate commitment, and in the context of a rising inflation. The European Central Bank decided to taper the asset purchase programme, even though no date has been set as yet for ending this programme.
In several recent cases, the Federal Reserve has taken action to deal with a specific US compliance problem, while the home country supervisor has taken a leadership role in a broader action to address compliance issues across the consolidated firm. •  The Federal Reserve of course not only coordinates with financial regulators in other countries, but with other U.S. supervisors as well - both in terms of policy development and in terms of individual institution supervision. An excellent example of the former is last year’s release of the BSA/AML exam manual by the Federal Financial Institutions Examination Council. A fourth principle is that we should continue improving collaboration between the industry and supervisors. From the supervisors’ perspective, this can take a variety of forms. We have participated in formal and informal public consultations and we have supported industry-led efforts - such as the case of CRMPG II. At times, we have also brought firms together to address issues requiring collective action - as the New York Fed has done with the back-office problems faced by credit derivatives dealers. A final principle I will mention is the importance of regulatory agencies developing specialized expertise to carry out supervisory efforts, with a focus on the hiring, training, development and retention of examiner staff. Specialized examiners can, and should, be exposed to a cross section of firms, so that they can develop a perspective on state-of-the-art industry practices.

It looks back over a very long time period, and encourages us to look into the future as well. The changes that have taken place during two millennia have been substantial, including the introduction of paper money and the end of precious-metal coins in circulation. These are insignificant in comparison with the developments of the recent decade. The future is cashless. Some time in the future, the present contents of our purses and pockets will seem as quaint as some of the contents of this exhibition. Cheques may of course, become obsolete even sooner. This exhibition tells a story through the most significant numismatic items that have circulated in the region. They represent part of a picture that reveals the progress of mankind in the use of money. Given the 21st century will likely mark the end of physical money as we have known it for most of our history, the importance of looking at the past has never been greater. By looking beyond the physical appearance of money and examining its role instead, it is apparent how long the world has been globalised and how insular thinking would not in fact contribute to economic development. Indeed, this exhibition demonstrates that global and economic integration has existed in times of antiquity. We would like to thank everyone who have kept collecting and researching the currency of Nusantara. By doing this, they have highlighted the evolution and continuity of history and the importance and significance of the region in which we live.
In net terms, these changes have contributed positively to the Bank’s net worth (dotted line in Figure 16), which had remained negative for many years due to the historical weight of Subordinated Debt, the effect of the exchange rate mismatch between assets and liabilities, and a negative rate differential (between local debt and international reserves). Not only does the higher profitability of domestic assets contribute to close this gap, but the reduction of the Bank’s long-term debt stock (through repurchases) will reduce the financial burden for the next years. In practice, while greater returns are being received on local assets, on liabilities the Bank is paying ever lower rates, a situation that will continue for a long period of time. In addition, the peso has depreciated due to the mismatch between a high proportion of foreign currency assets (reserves) and local currency liabilities (bonds and monetary base). These factors combined have generated a positive value of the net worth for the first time in many years 7, which in previous projections was only foreseen in 2028. With the ups and downs of the currency in the short term, net worth will fluctuate around its current values during the next few years, to settle in positive numbers towards the end of 2025. These long-term projections are of a dynamic nature and are constantly reassessed, including the desired level of reserves.

16  40  60 80 Unchanged  100  Figure 9  Labor income and social benefits (1) (2) (variación anual, porcentaje)  20  20  10  10  0  0  -3  -10  -10  -20  -20 -27  -30 -40  Second quarter Labor income  -30 Third quarter Social benefits  -40 Net  (1) The labor income is calculated using the wage bill, where (a) the employment projection is that implicit in the baseline scenario of the September 2020 MP Report, (b) those employed covered by the Employment Protection Law are excluded from the calculation, and (c) the labor income of self-employed workers would fall by 55% in Q2 and 35% in Q3. (2) The calculation of benefits considers: Employment Protection Law, Emergency Family Income (IFE), Severance Insurance, Covid-19 Emergency Bonus, and Middle-Class Bonus. Official information regarding payments already made is updated to 27/Aug/2020 and interpolated for the remaining months. For the IFE, four payments are considered. It does not consider the reforms to these benefits that had not been approved at the statistical closing. Source: Central Bank of Chile using INE, Ministry of Finance and Superintendence of Pensions data. Figure 10  Sales by electronic billing (*)  (moving two-week average, billion pesos)  7  Supermarkets  6  30/Jul,: Law for 10% pension fund withdrawal published in Official Gazette  5  +33% 6 +15%  4  2  20 01  4  2  26/Mar.
In a speech I delivered last year, I had shown how Malta’s competitiveness lags behind that of EU member States, mainly because of restrictive practices and other labour market inflexibilities; the maintenance of monopolistic situations in economically strategic areas such as transportation and inland freight; and insufficiencies in our educational system and innovation efforts. These conclusions have been supported by a number of studies since then and remain valid today. Problematic as it is, however, the budget deficit is by no means the only determinant of macroeconomic imbalances. Certain systems and practices which create demand without generating output have equally harmful consequences. A typical example is the welfare system. It has become so entrenched that its benefits are mistakenly considered to be immutable rights; but, as the rapidly growing welfare gap shows, it is a system which carries the seeds of its own destruction. For while the welfare state was born from the noble premise that care for the weak and the needy is the responsibility of society as a whole, in Malta the terms “weak” and “need” are defined very liberally. In so doing, we overlook the fact that generous welfare depends on two details of demography and politics: that there are enough people of working age to fund the claims of those defined as being weak and in need; and that working people are indeed willing to pay the necessary taxes. If these conditions are not met, there can be no other solution but to redesign the welfare system according to the funds available.

The fiscal deficit, on the other hand, represents a significant hurdle as it is currently about double the 3% of GDP limit. Related to the deficit is the size of the public debt, which exceeds the 60% threshold. The main determining factor in the timing of the adoption of the euro, therefore, is the speed with which fiscal consolidation can be achieved, bearing in mind that the euro area will not technically be in a position to accept newcomers before 2007. If the Government embarks on the relatively fast track of fiscal consolidation implied by Malta’s Pre-Accession Economic Programme, we would need to enter ERM II in 2005. Should this track be chosen, however, it would be vital that the planned pace of consolidation be maintained. In this way the benefits of an early adoption of the euro would be reaped, and the lira’s stay in ERM II would be  BIS Review 50/2003  5  smooth, with no noticeable shocks in the transition from the current basket system to the single currency. If, on the other hand, there are slippages in the rate of fiscal consolidation, the stay in ERM II would have to be prolonged and the adoption of the euro postponed. This would attract negative attention from the international financial markets, resulting in a reduced credibility of our economic policy and in pressures on the exchange rate and the interest rate.
That membership rate has steadily declined over time, extending a broad trend apparent since at least the mid-1970s. In 2016, membership of trade unions stood at 23% (Chart 5). Today, around 6 million employees are members of trade unions, less than half the peak of around 13 million in the late-1970s. That fall in union membership rates has been broadly based. It has applied to both males and females, although the fall in membership has been greater among males with rates falling from 35% in 1995 to 21% today. It has occurred in both the public and private sectors, although public sector employees remain around four times more likely to be union members. And it has been true across all age groups, although rates of union membership tend to be lowest among younger cohorts, with rates among the 16-24 age cohort 8% compared with 30% for those aged 50 and over. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  The fact that unionisation rates have been falling within each age cohort over time, and are lowest among the young, suggests the downward trend in rates of unionisation may still have some distance to travel. For example, if unionisation rates were to continue to decline at the same average rate as over the past decade, then they are likely to fall to around 10% of employees, or 3 million people, within a generation. A more recent labour market trend is the increased importance of self-employment.

One source is empirical research on wage behaviour. This literature is best-developed in the area of unionisation. It suggests there is a clear wage premium associated with trade union membership, even once we take account of differences in workers’ skills, sectors and regions. 11  There are a number of possible reasons for this wage premium, including the greater bargaining power union membership confers. There are also a wide range of estimates of the scale of this wage premium. These appear to vary widely across different countries, regions and sectors. Nonetheless, estimates of the aggregate wage premium in the UK are typically centred in the range 10-15%. 12  There is evidence this wage  premium may have shrunk over time, perhaps reflecting diminished union membership or increased competition in the labour market. 13  And there is also evidence decreased unionisation may have made  wage-setting more dispersed and localised. 14  10  This is based on data from Reed on around 15 million advertised job vacancies between 2008 and 2016. There are various possible reasons for ‘self-employment’ being included within a job vacancy description. These may include reduced National Insurance contributions and increased flexibility over working hours. 11 Lewis (1986). 12 Bryson (2014). 13 Bryson (2014). 14 Gregg et al (2014).