samchain/econo-pairs-v1 huggingface dataset:
The total amount and pace at which the Desk could purchase in these TBA contracts would likely depend on the supply of securities that could be readily delivered and the willingness of investors to sell these securities from their portfolios.15 For these reasons, it can be useful to gauge our purchases both relative to gross issuance as well as the amount of outstanding stock that can likely be delivered into the Desk’s TBA purchases. Since the current purchase program began, the Desk’s purchases have accounted for about 50 percent of gross issuance on average, below the average monthly purchase rate of roughly two-thirds during the first round of large-scale MBS purchases in 2009. If refinancing activity declines, leading to a decrease in gross issuance, our purchases could exceed these levels. Such higher levels still seem unlikely to cause significant market functioning issues, given the considerable supply of existing stock that we believe could be delivered into the Desk’s TBA purchases over time. Nevertheless, not all new securities are issued in the TBA market, and it is difficult to estimate future gross issuance, so the Desk monitors the purchasable supply of MBS closely.16 Purchases of Treasury securities are more straightforward, reflecting the relative simplicity of the market and our long history of operating in it. Treasury purchases are distributed across securities with different maturities, with the intent of removing a specified amount of duration risk from the market without causing significant market disruption.

Despite all that, foreign exchange market participants and central banks in 1974 found Herstatt risk to be an intractable problem. All that was left to banks was to manage it. And so it went for 20 years. Then, in the mid-1990s, Bill McDonough, president of the New York Fed, identified the continued existence of Herstatt risk as a challenge to be met. As chairman of the Committee on Payments and Settlement Systems of the G-10 Central Bank Governors, he spurred the central bank community to take a fresh look. This time, the combination of new financial analysis and the rapidly expanding availability of raw computing power made the difference. •  In what today still stands as a landmark in analysis of the connection between operational and financial risk, the 1996 Allsopp report demonstrated in a straightforward manner just how much financial risk existed in the bilateral settlement of gross principal amounts of foreign exchange – an analysis that provided the insight into how a settlement facility could reduce that risk, and into understanding how settlement management could improve in the interim. •  Raw computing power was essential for the design and risk management of any proposed new settlement facility. Through scenario analysis and stress testing, CLS’s founders could determine the necessary capital and liquidity needs, default handling procedures, and the general benefits of multilateral vs. bilateral netting. The inherently multicurrency nature of foreign exchange settlement of course enhanced the challenge.
16  “The extra-action strategy responds to a perceived speculative boom with tighter monetary policy - and thus lower output and inflation in the near term - with the expectation of significantly mitigating the potential fallout from a possible future bursting of the bubble. Thus, the strategy seeks to trade off the near-certainty of worse macroeconomic performance today for the chance of disproportionally better performance in the future, on the theory that the repercussions of a major market correction could be highly nonlinear. But the extra-action proposal is by no means a bold call for central banks to prick market bubbles.” - Kohn D. “Monetary Policy and Asset Prices” at “Monetary Policy: A Journey from Theory to Practice - An ECB Colloquium held in honor of Otmar Issing”, 16 March 2006. 17  “Interest rate setting must also be assessed in the light of developments in property prices and credit. Wide fluctuations in these variables may in turn constitute a source of instability in demand and output in the somewhat longer run.” – Norgesbank, Inflation Report, March 2006. 18  Trichet J.C. “Asset price bubbles and monetary policy” Speech of the President of the ECB, Mas lecture, Singapore, 8 June 2005. 19  Fukui T. “New Framework for the Conduct of Monetary Policy: Toward Achieving Sustainable Economic Growth with Price Stability”, Summary of a Speech Given by Toshihiko Fukui, Governor of the Bank of Japan, to the Japan Chamber of Commerce and Industry in Tokyo on 16 March 2006.

The development of securitisation has spurred the demand for new types of instruments. This demand led the financial system to generate new assets even at the cost of extending credit to ever riskier sub-prime borrowers. This, for a time, helped sustain a rapid increase of real estate prices which in turn stimulated the growth of mortgages. BIS Review 76/2010  1  The main causes of the crisis therefore lie in the growing “real” imbalances and the uncontrolled development of financial innovations. Overall, these combined evolutions led to a generalized increase in leverage and financial fragility. Against this background, it is quite unlikely that too accommodative monetary policies played a central role in the crisis. Some analysts have pointed out to what they see as an “asymmetric response” by monetary authorities to asset price increases: Central Banks would not lean against asset price bubbles, but were prepared to clean the consequences after they burst. However, we need to ask ourselves whether the unusually rapid credit growth in the years preceding the crisis should not rather have called for complementary policy actions on the supervision side. Some attempts were made in the Eurosystem. In particular, the Bank of Spain enforced dynamic provisioning to curb domestic credit expansion. But the crisis hit globally nevertheless and it raises several challenges for authorities in charge of macroeconomic policies. II –Managing the crisis Starting in august 2007, Central Banks were confronted with major and unprecedented tensions. Increasing uncertainty led to liquidity hoarding by financial institutions.
Why was the internal devaluation strategy effective in Latvia and the Baltics, while other countries are still struggling with a deep economic and political crisis? It is worth drawing lessons from the Baltic experience for euro area member countries. BIS central bankers’ speeches  1  II. Lessons for euro area member countries  Let me start with fiscal consolidation. The Baltic experience shows clearly that speed is of the essence. In all three Baltic countries, the government reacted swiftly to the deterioration of public finances and frontloaded fiscal adjustment. With a budget consolidation of around 9% of GDP in 2009 alone, Latvia’s effort is unparalleled in Europe. Undertaking the necessary austerity measures at an early stage had a triple beneficial effect. First, it allowed the Baltics to benefit from positive confidence effects. Second, it allowed Latvia to return to the financial markets well ahead of schedule. Third, it allowed growth to bounce back after exceptionally severe output contractions. In 2011 the Baltic countries were the three best performers in the EU in terms of GDP growth. At a time when all euro area policy-makers urgently seek ways to relaunch growth, this is a remarkable achievement. The concept of “expansionary contraction” has been used and criticised in the ongoing debate about growth and austerity. The Baltic experience provides an indication that this need not be an oxymoron: even if fiscal consolidation weighs on the growth prospects in the short term, it has sizeable positive effects in the medium to long term.

Particularly economic independence of central banks – the freedom of taking policy decisions independently of political interference – places Chile well above the average level of independence of both emerging and developed economies in 2003. Chile has shown a responsible fiscal policy, which has contributed significantly to successful monetary policy. During the 1990s, the fiscal balance averaged a surplus of 1.5% of GDP. The above-mentioned structural fiscal surplus rule stabilizes government spending over time, by linking it explicitly to permanent government revenue. Therefore fiscal dominance of monetary policy is ruled out in Chile, as a result of central bank autonomy and Chile’s sound fiscal policy. Public debt has shown a substantial decline since the 1990s, as a result of prudent fiscal policy. The share of consolidated gross public debt has been reduced from 76% of GDP in 1990 to 20% of GDP in 2006, whereas the consolidated net public debt position turned from 34% of GDP in 1990 to -6% in 2006 (figure 3). The successful performance of the fiscal position has been enhanced by the fiscal balance rule applied since 2001 (figure 4). Chile’s good growth performance, complemented by a market-based incentive structure, appropriate regulation and sound supervision of the financial system, has resulted in a safe and sound financial system and deep capital markets. As a result of the major banking crisis that came with the deep 1982-1983 recession, the 1986 Banking Law enhanced regulation and supervision of the financial system.
You can rest assured that payment systems of European countries will cease to be national payment systems sooner or later. As intended by the European Union decision-makers, in a few years cross-border euro payments will be as unified and cheap as is the case for cashless money settlements in national payment systems now. From the point of view of the central bank, SEPA should be beneficial first of all to the citizens of Europe, but it is also to contribute to the development of the payment services market. As politicians refine their visions of united Europe, tax-payers ask questions about the price. In the long term, the balance of benefits and costs of united Europe is undoubtedly favourable. The same pertains to the idea of SEPA. However, it is worth remembering that the final shape of the European payment system should be determined, to the largest possible extent, by the market that will choose the best solution for banks’ clients. The assumptions made in order to streamline and increase the efficiency of cashless turnover in euro are well justified economically across Euroland. However, in countries outside the Euro area, such as Poland, the implementation of SEPA should be subject to a thorough debate in a relevant community.

BIS Review 97/2006  1  since Europe will be able to take advantage of what Pierre-Olivier Gourinchas and Helene Rey describe as the “exorbitant privilege” 3 . Payment systems of the Euroland countries do not follow these changes swiftly enough. These systems have supported national and international retail operations in various European currencies so far. The only exception were activities of the central banks under the aegis of the European Central Bank. These banks quickly developed and launched the TARGET system for real-time gross settlements of large volume euro transactions. As regards the cashless turnover in pan-European relations, foreign currency exchange savings were the only measurable benefit stemming from the introduction of the euro for the consumers. Apart from that, the settlement time and the costs of crossborder transactions remained on the same high level as before the implementation of the single currency. These costs were much higher than prices of national transactions. One of the causes was the lack of the appropriate technical infrastructure, discrepancies in information and business standards applied in individual countries and the willingness of the banking sector to gain financial benefits from higher fees for cross-border transactions. This problem was raised already at the very beginning of the implementation of the single currency in Europe and the lack of visible and effective activities undertaken to change the situation encouraged the European Union decision-makers to take regulatory action. The aim was to provide mechanisms for effective euro payments in the Euroland and uniform principles for cashless payments.
I will end with some final remarks. Economic growth and natural resources One paramount issue in our country’s development is its concentration of natural resources and, very specially, of copper ore. The world evidence shows that there are major differences in growth rates among natural resource abundant economies. One example is Botswana, rich in diamonds, which early this decade could account for nearly 40% of GDP (Acemoglu et al., 2003). This country’s per capita GDP grew by an average 6.6% per year between 1960 and 2007, which meant that in 2007, its per capital GDP was 19 times the one in 1970. An example to the contrary is the case of Nigeria, rich in oil, yet virtually stagnant. Its per capita  BIS Review 106/2009  1  GDP increased by an average 1.2% per year over the same period, which meant that in 2007 Nigeria had barely 1.5 times its per capita GDP of 1960. It has been found that, on average, countries rich in natural resources grow less than those that are not (figure 1). Based on this evidence, much research effort has been devoted to unraveling the link between economic growth and natural resource abundance, and that is what I intend to briefly cover now. International evidence and discussions on the relationship between natural resources and economic development are varied. Some economists, mainly Sachs and Warner (1995, 1997, 2001), have argued that rather than a blessing, abundance of natural resources is a curse.

The CBT foresees that inflation will follow a fluctuating course significantly above the target and then reassume a decreasing trend in the last quarter of the year once the temporary factors taper off and come back to levels consistent with targets in the first months of 2011. In the last part of my speech, I would like to mention about the general framework of the monetary policy exit strategy that we shared with the public yesterday. As you all know, recently, one of the most discussed issues in monetary policies has been “exit strategies”, which include the withdrawing measures taken during the global crisis and normalization operations of monetary policies. We believe that the exit strategy of the CBT will be simpler and easier as no need for radical measures arose and the balance sheet structure was not damaged during the crisis period. I would like to handle the exit strategy of the CBT in two groups as foreign exchange and Turkish lira. The basic principle of the CBT on foreign exchange liquidity is that the Central Bank, which is the lender of last resort for Turkish lira and has broad flexibilities related to Turkish lira liquidity management, is not be considered as the lender of last resort for other currencies. For this reason, the banking system has to be much more discreet and prudent in its management of foreign exchange liquidity.
Blanchflower, D, Costa, R and Machin, S (2017), ‘The Return of Falling Real Wages’, CEP Real Wages Update, London School of Economics Centre for Economic Performance. Bradley, J (2016), ‘Self-employment in an equilibrium model of the labor market’, IZA Journal of Labor Economics, 5:6. Bryson, A (2014), ‘Union wage effects’, article for IZA World of Labor. Chapman, B (2017), ‘UK must combat unfulfilling jobs and commit to ‘good work’ economy, says Matthew Taylor’, article in The Independent. Evans, C (2011), ‘A risk management approach to monetary policy’, speech delivered at the Ball State University Center for Business and Economic Research Outlook Luncheon. Gardiner, L (2016), ‘A-typical year?’, article for the Resolution Foundation. Gregg, P, Fernandez Salgado, M and Machin, S (2014), ‘Real Wages and Unemployment in the Big Squeeze’, Economic Journal, 124 (576), pp. 408-432. Hamilton, B,H (2000), ‘Does Entrepreneurship Pay? An Empirical Analysis of the Returns of Self-Employment’, Journal of Political Economy, Vol. 108, No. 3, pp. 604-631. Hook, L (2015), ‘Year in a word: Gig economy’, article in the Financial Times. Hudson-Sharp, N and Runge, J (2017), ‘International trends in insecure Work’, Report for the TUC. IMF (2017), ‘Understanding the Downward Trend in Labor Income Shares’, IMF World Economic Outlook, April 2017. Lewis, HG (1986), Union Relative Wage Effects: A Survey, University of Chicago Press. Monetary Policy Committee (2017), ‘Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 14 June 2017’, Bank of England. OECD (2017), ‘OECD Employment Outlook 2017’, OECD Publishing, Paris.

In particular, it is worth exploring whether these changes may have contributed, in any way, to the weak wage puzzle experienced over recent years. And, if so, given that these trends are likely to persist, whether they carry implications for the durability of wage weakness too. Why, in principle, might these changes affect wage behaviour? One story here is “divide and conquer”. There is power in numbers. A workforce that is more easily divided than in the past may find itself more easily conquered. In other words, a world of divisible work may reduce workers’ wage-bargaining power. Another story is that more flexible working practices may have induced previously inactive people back into work. With more people willing to enter employment, upward pressure on wages may be dampened even as labour demand picks up given the higher rate of labour market participation in the economy. In either case, the downstream consequences would be similar: weaker wage growth than in the past, for a given level of unemployment or demand in the economy. That is the theory. What empirical evidence is there to support these stories? The Changing Nature of Work  Let me start by outlining some of the facts on the changing nature of work and the divisibility of labour. At the level of the profession or sector, one clear diagnostic comes from the changing pattern of unionisation. In 1990, around 38% of employees in Great Britain belonged to a trade union.
The growing demography of Africa has resulted in the clearing of land in order to accommodate for more houses and areas for cultivation due to the significant dependence of the majority of the population on agriculture. According to UNEP 2003, 60% of the tropical forest areas that were cleared in Africa as a whole between 1990 and 2000 were converted to permanent agricultural smallholdings. The cutting and not replacing of trees contributes to global warming. Worse still is the burning of forests to clear land for grazing or agriculture which also releases carbon dioxide. Desertification is another area of concern for the continent. Over 45% of Africa is affected by desertification, while 55% is at high-to-very-high risk of erosion (UNEP 2003). Desertification is compounded by the other major environmental concern of deforestation. In fact, studies have shown that mortality rate, maternal health, and girl child education in the region are directly linked to environmental changes such as deforestation. In rural areas, households rely on females to fetch firewood, therefore, continued deforestation implies longer walking distances for women and girls. These result in complications in pregnancy, other ailments, as well as less time for girls to do school work. Studies have also shown that women and girls in Africa spend an average of three hours a day fetching water, hence expending more than a third of their daily intake of food (UNDP 2003).

Panayotou further notes the failure to provide evidence that the occurrence of lax environmental standards in emerging economies leads to FDI, on account of the fact that investment decisions by manufacturing plants and other multinationals to invest in countries is based on factors such as political stability, favourable economic policy, labour quality, and infrastructural developments. It is therefore clear that economic development is not without costs. In fact, the much desired economic growth if not carefully balanced with the need to protect the environment may result in permanent adverse effects on the environment for a country and the world. Specific to Africa, the application of these models and research findings lends itself to further caution. With the continental economy still facing numerous problems to the extent that most national economies are yet to provide sufficiently for their nationals, it is unlikely that a point would soon be reached in Africa’s economic growth, at which adequate resources become available for commitment to environmental concerns. In other words, thought needs to be given to the social background against which utilisation of resources from economic growth will depend. The various human and social challenges such as poverty and epidemics confronting the continent may well explain the relatively low emphasis by policy makers on environmental concerns when compared to their western counterparts. That said, however, it must be recognised that in respect to the ecosystem, the globe is one and benefits that accrue to one corner due to environmental preservation, accrue to the entire globe.
2  BIS central bankers’ speeches  Far more vacancies remain unfilled than usual, indicating big mismatches in the labour market. And fewer people than normal are switching jobs, suggesting an ongoing reluctance to take risks. The American labour market still is not working as it once did. The UK Even though times for many families have been tough, relative to that benchmark, the UK labour market has performed well. Despite a recession that was deeper and more prolonged, unemployment did not rise as much and has fallen back sharply since. 4 In contrast to the US, this rapid fall has been accompanied by significantly higher participation rates. There are now over one million more people in work in the UK than at the start of the crisis. Total hours worked are some 4% above their pre-crisis level. That exceptional employment performance has come at a cost, however: wage growth has been very weak. Adjusted for inflation, wages have fallen by around a tenth since the onset of the crisis. To find such a fall in the past, you would have to look back to the early 1920s. The weakness of pay has, in effect, purchased more job creation. It has not resulted in an unusually high level of profits. The burden of the Great Recession has been shared across the UK. Profits have been squeezed almost as much as labour costs. Employees have seen their real incomes reduced, but more people are in work as a result.

For example, the regional house price indices used to calculate changes in housing wealth may be capturing wider regional variation in labour demand. 13  Eggertson and Krugman (2012) illustrate how increased labour supply is one margin through which households that need to de-lever can do so. Eggertson, G and Krugman, P, (2012), “Debt, deleveraging and the liquidity trap: a Fisher-Minsky-Koo approach”, Quarterly Journal of Economics. 14  See Bunn, P and Rostom, M (2013), “The financial position of British households: evidence from the 2013 NMG Consulting survey”, Bank of England Quarterly Bulletin, Q4. 15  Based on the relationship between average earnings adjusted for inflation expectations and unemployment between 1993 and 2012. See Broadbent (2014), “Unemployment and the conduct of monetary policy in the UK”, Speech at the Federal Reserve Bank of Kansas City 38th Economic Symposium, Jackson Hole, Wyoming. 16  See eg Broadbent (2012), “Productivity and the allocation of resources”, Speech at Durham Business School, September. BIS central bankers’ speeches  5  This substitution of labour for capital across the economy has continued to lower productivity per hour worked. That weak productivity growth is not the result of laziness on anyone’s part. It is a natural consequence of so many people wanting to work and companies employing them in place of capital.