samchain/econo-pairs-v1 huggingface dataset:
SPEECH  Measuring the Natural Rate of Interest: Past, Present, and Future May 19, 2023 John C. Williams, President and Chief Executive Officer Remarks at the Thomas Laubach Research Conference, Board of Governors of the Federal Reserve System, Washington, DC As prepared for delivery  Thank you, Trevor. And good morning, everyone. It is a special privilege to participate in this conference honoring my dear friend, colleague, and co-author, Thomas Laubach. Many of you knew Thomas personally, and all of you knew him through his work. He was a brilliant economist, trusted colleague, and an inspiring leader. We miss Thomas' dedication, good cheer, and sense of humor, and his impact on everyone he touched endures. Our collaboration started in the fall of 2000 with a shared interest in figuring out how to measure the elusive natural rate of interest, otherwise known as r-star. At the time, neither of us had any idea that our research on this topic would continue for 20 years. Kathryn Holston and I are carrying on this work. It's one of the many ways we can honor Thomas and his memory. Because of the unprecedented, pandemic-related shocks to the economy, we paused our regular publication of r-star estimates in late 2020. This conference is the perfect venue to announce that we are resuming them. But first, I want to take some time to share r-star's origin story, which is how I came to know Thomas.

In a comparison with a number of other inflation-targeting countries, it is evident that Swedish inflation was closest to the target level last year, measured as an annual average, and that it was fairly average with regard to deviations from the target level. As monetary policy’s effect on inflation has a time lag, the outcome of inflation in 2003 is largely a result of the monetary policy conducted in 2001 and 2002. Let me therefore report some of our considerations in the light of the developments and forecasts made then. At the beginning of 2001 the repo rate was 4 per cent. During the spring there was a severe depreciation of the krona. Despite the fact that economic activity in Sweden and abroad was in a weakening phase, domestic resource utilisation was at a high level, while inflation had increased significantly during the spring and exceeded the upper tolerance limit. Inflation expectations had also begun to rise. Given this, we raised the repo rate in summer 2001. Economic developments and monetary policy considerations in Sweden differed from those in many other countries, where monetary policy in many cases had begun to be more expansionary. The decision to raise the interest rate in July 2001 was not self-evident. Three Executive Board members entered reservations against the decision, with reference to the weakening economic activity. The terrorist actions in September 2001 caused us to cut the rate by half a percentage point. Our assessment was that confidence among both households and firms would deteriorate.
Against this backdrop, the institutional framework in the EC Treaty for the EMU does not only set a new institutional framework for monetary policy but also for the economic policies of the member states: •  The main tool for co-ordinating the policies are the so called “Broad economic policy guidelines”. They set the overall frame for the economic policies of the Member States. •  Building on this co-ordination framework the EU leaders agreed on a wide-ranging program of structural reforms – the so-called Lisbon Strategy in 2000. The strategy’s aim is to gearing national policies towards macro-economic stability and micro-economic flexibility. •  In addition to the co-ordination of economic policies the EC Treaty has put in place a framework for stability-oriented budgetary policies. The main element of this  BIS Review 17/2008  3  framework is the Stability and Growth Pact, which requires Member States to pursue sound fiscal policies. The economic policy guidelines and the budgetary rules are important so as to facilitate the adjustment to economic shocks in the absence of a national monetary and exchange rate policy. V The EU’s position on unilateral euroisation The EU’s roadmap for euro adoption is solid and indispensable. Accordingly, it is not surprising that the EU has taken a negative position towards unilateral euroisation by a candidate country or a Member State with a derogation.

Jürgen Stark: The adoption of the euro – principles, procedures and criteria Speech by Mr Jürgen Stark, Member of the Executive Board of the European Central Bank, at the Icelandic Chamber of Commerce, Reykjavik, 13 February 2008. *  *  *  I Ladies and gentlemen, It is a great pleasure for me to attend this conference, together with distinguished guests and speakers. In my remarks, I would first like to set out the European Union’s approach towards the adoption of our single currency, the euro. I will then spell out the EU’s and the ECB’s stance on unilateral euroisation. I will conclude my remarks with a brief overview of the potential economic costs and benefits of unilateral euroisation. The EU’s approach towards the adoption of the single currency The creation of the single currency has been a long and truly historic process. Sixty years ago, Europe was marred by political disarray and economic disorder. With the Treaties of Paris and Rome, Europe’s leaders started the construction of a united Europe on the ruins of the Second World War. Since then Europe has achieved a lot: •  One of the most important achievements is the Single Market, with the free flow of goods, services, capital and people across national borders. Consumers in Europe benefit from the larger supply of goods and services. The European companies benefit from the enlarged markets.
For example, argued Stack, they like to deliver something they regard as perfect straight away, and they do not like it when their boss finds fault with what they deliver and firmly believe is perfect from the very beginning. They are essentially very disciplined, and that is the gospel truth. As an American, Mr Stack had an unbiased view and a great eye and feel for this sort of thing. And he was in many aspects right and revealed what was hidden to many of us. I can confirm that these similarities between Czechs and Austrians are particularly visible in Central European and international teams. I have been reminded of them on many occasions. The last time was fairly recently, when we were negotiating the new position of our countries in the mighty International Monetary Fund with colleagues and friends from the Austrian central bank. This year we achieved an incredible outcome: Austria, the Czech Republic and Hungary will have the right to appoint an executive director – one of the 24 executive directors in the IMF – each country for a fixed term. As a group of Central European countries we will therefore have the same representation as far larger and more populous  BIS central bankers’ speeches  1  countries.

Meanwhile, the head of the Czech National Bank goes by the name of Singer, his deputy is a certain Mr Hampl, and our executive directors include a Mr Schmidt and a Mr Bauer. In other words, there is some truth in the idea that we are close. I believe this is something we can build upon. I am very much looking forward to discussing with you. Vielen Dank für Ihre Aufmerksamkeit. 2  BIS central bankers’ speeches
Furthermore, given the nature of the crisis, the restrictive measures and the movement limitation, part of the population faced a forced reduction of the consumption, primarily the consumption of different services, which is characteristic for persons with higher income and with greater capacity and propensity to save. Third, given that all future economic flows are determined by the extremely uncertain epidemiological curve, in such an environment, the precaution motive has a great role in the depositors' behavior. The European Commission surveys for both our country and for the countries of the Western Balkans also show that the respondents' perceptions in 2020 and in 2021 are in favor of the view that due to the economic situation in this period, savings are more favorable decision, compared to recent years. At the same time, the surveys of our Statistical Office show a decrease in the utilization of savings as a source of income during 2020. What has been happening to the savings in the banking system in our country from the beginning of the pandemic onwards? The deposit potential is increasing with a relatively solid intensity of over 8% on an annual basis, whereby the dynamics of increase is very similar to that of the period 2018 - 2019. Such dynamics does not resemble a bit the developments during the global financial crisis, when in a short time the deposit growth slowed down, which from around 20%, reduced to around 7% on an annual level.

What we need is to match the huge amounts of regional savings with the much-needed investment in infrastructure, which is as high as 8 trillion dollars over the next decade as estimated by the  3  2  ADB website (2012) (http://www.adb.org/features/fast-facts-asean-prc-and-india-great-transformation)  BIS central bankers’ speeches  ADB.4 To match this huge demand for funds, ASEAN along with China, Japan and Korea have put in place several initiatives: two key projects include the ASEAN Infrastructure Fund, which pools regional saving into funds for investment in infrastructure projects and the Asian Bond Markets Initiative, which develops and deepens regional bond markets so as to tap regional savings. 15. To conclude, there are great opportunities in store ahead. At the end of the day, the benefits of trade liberalization and infrastructure development will extend to all of us if we work collectively to overcome the challenges. The AEC will be a springboard to benefit the whole region, particularly for the GMS. This is because the whole region will be more closely knitted, not only in terms of physical connectivity but also in terms of shared production networks. I believe that this conference today will be an excellent platform for us to come together and share our ideas towards realizing long-lasting prosperity in the GMS region. Thank you. 4  ADB website (2009) (http://www.adbi.org/files/2009.08.31.book.infrastructure.seamless.asia.pdf)  BIS central bankers’ speeches  3
We therefore seek to minimize how far employment is from its long run normal level and inflation is from our longer-run goal of 2 percent on the PCE measure. Because monetary policy works with a time lag, we base policy not just on where the economy is today but where we expect it to be in the future. To do this, we make economic forecasts, based on data and insights from a broad range of economic models. We also take into account the balance of risks around our base case outlook. Looking ahead, in the absence of further monetary easing, I concluded that growth would remain too subdued over the next several years to make big inroads into the spare capacity that remains from the Great Recession. As a result, unemployment would remain unacceptably high, with economic risks skewed to the downside. Meanwhile, with substantial slack in labor markets and inflation expectations stable, inflation was likely to remain a bit below our 2 per cent longer-run objective. In this situation, I concluded that our policy framework means that further monetary policy easing was appropriate provided that the benefits of using the tools available outweighed the costs. In my judgment, this standard has been satisfied here. I am confident that the costs are manageable, based in part on the experience we have of using the tools these past four years and that the benefits substantially exceed the costs, recognizing, of course, that our actions are not so powerful that they will instantly transform the economic outlook.

Sometimes we have different views on the specific policy choices at hand, and you should view this as completely appropriate: these are hard questions – particularly during difficult economic circumstances such as we face today. In fact, I think we make better decisions as a committee because we don’t all think alike. But we are united in our commitment to our dual mandate of maximum sustainable employment and price stability and in our belief that preserving the independence of the Federal Reserve in making monetary policy decisions is very much in the public interest. That independence allows us to make tough decisions based on data and analysis insulated from short-term political pressures. BIS central bankers’ speeches  1  At FOMC meetings, each Committee member presents a current outlook for his or her region and for the nation. In formulating these assessments, we consult with many sources – our boards of directors, regional advisory councils, community leaders and other key stakeholders. My meeting with you and others today is part of this systematic effort to understand what is going on in the grassroots of our economy. To help me gather more information about our region, I met this morning with Fox Valve, a small business in Dover that manufactures specialized, highly engineered industrial parts. After that, I had the pleasure of participating in a roundtable discussion with members of the local MexicanAmerican business community. After this lunch, I will travel to Picatinny Arsenal to learn about its role in the state’s economic activity.
This line of research points to the wide range of subjects that interest Thomas Philippon already shown in his 2007 book “Un capitalisme d´héritiers: la crise française du travail” 12  6  See speech by Vítor Constâncio: Banking Union: meaning and implications for the future of banking at the Banking Union Conference, Navarra University, Madrid 24 April 2014. 7  See the opening speech entitled “The implications of bail-in rules for bank activity and stability” by Benoît Cœuré at the conference “Financing the recovery after the crisis – the roles of bank profitability, stability and regulation”, held at Bocconi University on 30 September 2013. 8  Acharya, V., L. H. Pedersen, T. Philippon and M. Richardson, (2010) “Measuring Systemic Risk,” working paper. 9  See, for example, the Vox article entitled “Finance and growth: Too much of a good thing?” by Thorsten Beck, 27 October 2013. 10  Philippon, T., (2010), “Financiers versus Engineers: Should the Financial Sector be Taxed or Subsidized?”, American Economic Journal: Macroeconomics, 2(3), 158–182. 11  Philippon, T. and A. Reshef, (2012) “Wages and Human Capital in the U.S. Finance Industry: 1909–2006”, Quarterly Journal of Economics, 127(4), 1551–1609. 12  Philippon, T., (2007) “Un capitalisme d´héritiers: la crise française du travail”, Éditions Seuil. BIS central bankers’ speeches  3  where he musters a lot of empirical evidence to show that the labour crisis in France stems from bad employers-employees relations associated with a system that “preserves inheritance, direct or sociological”.

Philipp Hildebrand: In the focus of the Swiss National Bank - economic outlook and monetary policy Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the WGZ-Bank, Luxemburg, 9 September 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The world economy expands at a robust pace but the growth rates of the important economic blocs diverge considerably. In spite of the accommodative monetary policy in most industrial countries, inflation and inflation expectations remain well contained which may, among other things, be due to the process of globalisation and the credibility of central banks. Switzerland, small and extremely open, benefits from a recovering global economy. The conditions for returning to a path of modest expansion look favourable. However, there are certain risks that may affect the global and the Swiss economy negatively. Most importantly, high oil prices and the devastating effect of the hurricane „Katrina”, as well as the possibility of increasing long-term interest rates have to be mentioned. A persistently high price of oil could act as a brake to demand dynamics and growth prospects could also be threatened by soaring long-term interest rates, an effect that could be amplified through the housing channel. In the foreign exchange markets, structural and cyclical factors continue to determine the value of the US-dollar. 1/1
Lower middle-income countries are those with per capita gross national incomes (GNIs) of between US $ and US $ per year; while upper middle-income countries are those with GNIs between US $ and US $ This status reflects the continued economic growth that has been registered in the recent years.   Zambia’s reclassification as a middle income country would enhance investor confidence and further boost the investment climate thereby creating jobs and wealth for the people. In terms of financing, it should be noted that with the new arrangement, the government would be able to access more non concessional financing which remain key for infrastructure development necessary for economic development. This is in contrast with the previous status whereby Zambia could only access limited concessional financing which attracted very low interest rates and payable after a long time.   Despite the positive reclassification, it should be noted that the disparity between the poor and the rich would always be there and do exist even in developed countries. The challenge for the Government is to implement policies that will redistribute wealth so that inequality is reduced.   Nevertheless, with reclassification, it shows that the Government has been working very hard to accelerate economic growth, which is a necessary for economic development.   On average, people have been pulled out from poverty as per capita income has risen from US $ in 2000 to over US $ in 2010.

Therefore, my first conclusion is that from the economic perspective the dilemma between deepening and enlarging is rather imaginary. In fact, both these processes are going on around us at every moment, and the authorities have a limited ability to choose between these two aspects of integration. The political dimension makes the question much more complex. Despite the aforementioned conclusion that economic integration is relatively independent of political will, an appropriate institutional framework is undoubtedly important for the pace of integration and the future shape of European markets. But politicians are caught between their vision of an integrated Europe and pressure from many of their voters to defend their current positions. Their inability to explain the benefits of integration to the electorate is a source of frustration and puts limits on any further political deepening and enlarging of the more and more economically integrated area. This may lead to a temptation to use the argument of an imaginary choice between deepening and enlarging. But businesses will not ask politicians for permission to move to Balkan countries or Turkey, or to continue concentrating their activities inside the present EU. The role of the authorities is to support, not hamper these processes. Therefore, my second conclusion is that frustration with the inability to politically consolidate the existing area should not become a reason for constraining its political expansion. In the end, business would find its way through, but Europe would lose. BIS Review 50/2006  1
Figure 12 Growth in loans (annual change, percent)  Chile (1)  Emerging economies (3)  90  90  60  75  75  50  50  60  60  40  40  45  45  30  30  30  30  20  20  15  15  10  10  0  0  0  0  -15 -10  -15 90 93 96 99 02 05 08 11 Housing  Consumer  Corporate (2)  60  -10 06 Brazil  07  08  09  Colombia  10 China  11 Chile  (1) Preliminary figures for May 2011. (2) Sum of commercial loans and foreign trade loans. (3) For Brazil, figures cover up to February 2011. For China and Colombia, up to March 2011. Sources: Central Bank of Chile, International Monetary Fund and Superintendence of Banks and Financial Institutions. BIS central bankers’ speeches  13  Figure 13 Indebtedness and financial burden (percentage of disposable income) 80  20  60  15  40  10  20  5  0  0  02.IV  04.IV  06.IV  Total debt (RDI)  08.IV  10.IV  Long-term financial burden (RCI)  Sources: Central Bank of Chile based on information from SBIF, SuSeSo and SVS.

Private projections are consistent with this scenario of lower inflation throughout the projection horizon (figure 8). This projection is based on the assumption that, on average, output gaps will be closed throughout the projection horizon, and that the propagation of specific price shocks will continue to match the historic average, as it has in recent months. As for monetary policy, forecasts use as a working assumption that the monetary policy rate will follow a path comparable to the one that can be inferred from several expectation indicators (figure 9). As usual, there are risks that may cause the macroeconomic scenario described here to deviate from projections. On this occasion, the Board estimates that the risk balance for inflation and output is unbiased. Although milder than in March, one important risk is the persistence and propagation of the specific price shocks of the past few quarters. While fairly stable commodity prices are assumed for external markets, a scenario of higher prices significantly affecting local inflation because of the current status of output gaps cannot be ruled out. The labor market is showing important strength, with the rate of unemployment in low levels by historic standards and a substantial increase in employment, while various sources of information speak of the difficulties in hiring skilled labor in some regions and economic sectors. The y-o-y increase in wages is up from end-of 2010 (figure 10). However, the combination of increased employment, higher wages and stronger economic growth has allowed unit labor costs to vary in line with the inflation target.