samchain/econo-pairs-v1 huggingface dataset:
Commodities are priced in dollars, and this may mean that commodities exporters will try to gain compensation through higher prices if the dollar falls. In recent years, portfolio investment in commodities has become an increasingly common means of diversifying and spreading risks. The fact that interest has increased is due to the return on other investments deteriorating and this has probably contributed to reinforcing the upswing in commodity prices. If the expectations of the relative return on this type of investment were to decline, it could instead have a subduing effect on prices. How does one weigh together all of the factors I have mentioned? There is of course considerable uncertainty. The assessment we made at our last monetary policy meeting was that the world market prices would not continue to rise at the same rapid rate. This meant that the high inflationary impulses from the price rise on food commodities were assessed as  4  See Irma Rosenberg, “Rising commodity prices”, speech held on 9 May 2008. 5  IMF (2008) World Economic Outlook. 6  See the UN’s climate panel 2007: Impacts, Adaptation and Vulnerability. 4  BIS Review 68/2008  partly temporary. This is something that is so far supported by the tendencies towards a slowdown in food commodities prices in the world market which we have been able to see recently. Information received since the last meeting I now intend to move on to say a few words about the information received since the most recent interest rate decision.

We assumed therefore that growth in the world economy would be somewhat weaker in 2008 and 2009. In Sweden on the other hand, economic activity was somewhat stronger than expected. Nevertheless, it was assumed that the weaker prospects for economic activity internationally would lead to a slowing down of growth in Sweden as well later this year and early next year. Signs of this slowdown were already beginning to appear, for example in the data in the National Institute of Economic Research’s Economic Tendency Survey and in the statistics on retail sales and new job vacancies. Our assessment, however, was that the slowdown in Sweden would be relatively moderate. GDP growth remained good, and the potential for future growth was still relatively favourable. The level of saving among households and in the public sector was high. Property prices were fairly stable and the direct effects of the financial turmoil were expected to be relatively slight. BIS Review 68/2008  1  At the same time, inflation was high both in Sweden and abroad. This related above all to higher energy and food prices on the world market. Inflation expectations in Sweden also remained high, and were also way above the inflation target even in the longer term. We thus had to take various counteracting factors into account. On the one hand, growth in the Swedish economy was still good and both inflation and inflation expectations were high.
At the same time, we need to establish a common backstop to the Single Resolution Fund and lay the groundwork for the creation of an effective European Deposit Insurance Scheme. Significant steps in these areas are a precondition for a truly integrated euro area banking system and single money. The transmission of the ECB’s monetary policy remains at risk of being hampered in crisis situations as long as levels of depositor confidence differ across the euro area. The second thing we need to do is build a true single market in capital. Diversified capital markets play an important role in sharing risks and smoothing private consumption over time. For this reason, the ECB has been a strong supporter of the European Commission’s plan for a capital markets union. To be robust, the capital markets union needs effective regulation and supervision, for example in relation to investment firms and clearing. Not least given the United Kingdom’s imminent departure from the EU, we need to make concrete progress on this agenda and complement it with an ambitious, longer-term vision. Conclusions I would like to end by mentioning that recent Eurobarometer data show that support for the euro stands at a record high of 77% among euro area citizens and a large majority believe that their country’s membership of the EU is a good thing. Support for the European project is particularly strong in Ireland, where with 88% of citizens the single currency enjoys the highest level of support in the EU. Europe has to repay this trust.

My view has been that the further appreciation of the Swedish krona has risked leading to impaired target fulfilment, and this has been the motivation behind my stance in favour of a lower repo rate path than that decided upon. Am I not concerned that a lower repo rate path would lead to excessive inflation, considering how inflation has increased recently due to higher energy and commodity prices? It remains to be seen how permanent these increases will be. In our most recent forecast, which assumed the stabilisation of these prices, underlying inflation, even in the main scenario, was estimated at less than 2 per cent for most of the forecast period (see Figure 2). On the basis of this forecast, there is thus scope for a more expansionary monetary policy. One matter that I intend to address at the next monetary policy decision is the wide gap between CPI inflation and CPIF inflation that we saw in January and February. This gap is partly due to a detail, related to mortgage costs, in the calculation method used, which also results in higher CPI inflation over the rest of the year than was forecast in the monetary policy report in February. However, in my opinion, the underlying inflationary pressure in the economy is still low, which, for example, is reflected by the low outcome for CPIF inflation. 2  BIS central bankers’ speeches  Monetary policy has to be forward-looking, as its influence on the economy is subject to a time-lag.
(a) Uses Workforce Jobs by industry data seasonally adjusted by ONS. Industries are grouped by Standard Industrial Classification (SIC) 2007. Chart 7: Employment growth has been strong among the most highly skilled since the crisis, but low-skilled employment has recently rebounded. Chart 8: The UK Beveridge curve has been returning towards its past position. Sources: Labour Force Survey and Bank calculations. (a) Uses the Standard Occupational Classification (SOC) 2000. Seasonally adjusted by Bank staff. (b) Includes managers, professional and associal professional and technical occupations. (c) Change in total employment less changes in high and low-skilled occupations. (d) Includes elementary occupations, plant machine operatives, sales and customer services. Sources: Labour Force Survey and ONS Vacancy Survey (a) Total vacancies divided by number of people aged 16+ in employment. (b) Number of unemployed aged 16+ as a share of the active population aged 16+. 12  BIS central bankers’ speeches  Chart 9: UK wage growth is substantially weaker than would have been predicted by its past relationship with unemployment. Chart 10: Aggregate participation rate would have been around 1ppt lower had participation rates across age cohorts remained constant at 2007 levels from the start of the crisis. Source: Broadbent (2014). Source: Labour Force Survey and Bank calculations. (a) Economically active as a share of the 16+ population. (b) Counter-factual estimate fixing age- and gender- specific participation rates at their 2007 levels, and using actual population shares.

In the US, the burden has been much more concentrated on those who have lost, and not regained, work. And in contrast to the UK, American companies have increased their profits significantly as a share of national income. The euro area What makes the UK performance even more remarkable is that we have faced the added challenge of rebuilding competitiveness. In the run-up to the crisis, the UK’s economy had become increasingly imbalanced. When the crisis hit, sterling fell by a quarter. Prices of imported goods rose sharply and that fed through to higher inflation. The squeeze on real incomes was pronounced. And yet there were relatively few calls for higher wages to compensate. As a result of that painful adjustment, the UK is more competitive. And if the world economy returns to a surer footing, there is a real prospect that the UK can properly rebalance its economy. 5  4  Outturns for unemployment have remained some way below what would have been expected given the past relationship between changes in unemployment and growth (Okun’s law). Year-on-year increases in unemployment during 2008-9, for example, remained around 1ppt below a simple Okun relationship based on data since the early 1970s. That is in stark contrast to the experience of the US in that period, where unemployment outturns were some way above past Okun’s law relationships. 5  See Carney, M (2014), Speech at the Mansion House, June; and Broadbent, B (2014), “The balance of growth”, Speech at the London School of Economics, January.
Unlimited: our problem is not so much the debt from the Covid shock, but the pre-Covid debt (already 97% of GDP at the end of 2019) and especially now the post-Covid path. Indeed, Europe and France have faced unforeseen external crises in the past - the 2008 financial crisis, the Covid crisis, and now the war in Ukraine - and more crises will arise in the future. Furthermore, in order to achieve our two future transformations, ecological and digital, our investment needs are massive. The ecological transition alone will require additional investments estimated in Europe at EUR 360 billion at least per year between now and 2030,i of which one-third will be public investments. Europe's digital and innovation lag is also partly due to insufficient funding: in 2019, total public  Page 3 of 9 and private R&D spending was equivalent to 2.1% of EU GDP compared to 3.1% in the United States and 4.6% in South Korea. But even before these risks and needs, according to our projections, French public debt is expected to remain at best almost stable at around 110% of GDP up to 2032, assuming no change in fiscal policy . Clearly, this is insufficient to ensure fiscal sustainability in the long run. A more ambitious target should be set: a return much below 100% of GDP within ten years, and below pre-Covid levels. This should be achieved in particular by limiting the increase in real spending to 0.5% each year, compared with more than 1% over the previous decade.

It first seems reasonable to me to avoid, in this matter and at this stage, any Treaty change. We could keep the 3% deficit target, which is a useful anchor, and even the 60% debt target. But the rule of a 1/20 annual linear adjustment towards the latter target has become unrealistic because it is too strict, especially for highly indebted countries. And, instead of the structural deficit which no one really understands, or even knows how to calculate accurately we could set a ceiling on the growth rate of public spending as an operational target. At constant tax rates, this amounts to much the same thing in economic terms, and was the main thrust of the reform put forward in 2019 by the European Budget Committee (EBC) chaired by Niels Thygesen. These rules should not simply be seen as a constraint imposed by Brussels, but should be widely internalised, 'taken up' in our French budgetary debate, as they are in our national interest. 2. Adding a European stabilisation and investment capacity Allow me to imagine a successful exit from the forthcoming tough European and Franco-German - negotiations: the southern European countries - including France - accept domestic rules for fiscal discipline; the northern countries including Germany - accept a European fiscal capacity.
If it is a simple transfer of national investment funding already "in the pipeline", there will be no gain, and we would even run the risk of losses, in the case of a bad selection. Beyond this “recovery” side, a “repair” side should address growing solvency issues. The recent French proposal for a recovery fund foresees the possibility of setting up an equity fund either to inject capital into key companies, especially for those operating in European strategic value chains, as identified by the Commission in November 2019. Beyond that, several economists – including Elena Carletti, Professor of Finance at Bocconi University – have proposed the promising avenue of a temporary “European Pandemic Equity Fund,” iii which could be managed by the EIB. This could take the form of hybrid capital instruments, with no voting rights but a significant remuneration of the public investment, and a predetermined termination option for the firm. In addition, the Recovery Fund could consider a specific tool to buy-back some assets from banks. b/ A clarification of fiscal rules. The counterpart of financial solidarity is the responsibility of Member States. The current SGP [Stability and Growth Pact]  Page 9 sur 10 rules – are at once too complex and not credible enough. Obviously, there is a need to maintain fiscal rules – let me stress it, at the risk of unpopularity – but for them to evolve towards greater clarity and better ownership and compliance by Member States.

Before Turner, landscapes were generally viewed as subjects unworthy in their own right; their role was merely to provide backdrop to the real action. Turner elevated the genre by showing how paint could not only convey the appearance of a place but also capture something of its spirit. Turner also used art to hold a mirror to the technological and social transformations happening around him. Masterpieces such as Rain, Steam and Speed – The Great Western Railway captured the advent of the steam age. The Slave Ship reflected on the moral preoccupations of his times. The artistic developments that Turner pioneered resonated well beyond his lifetime, providing inspiration to the Impressionists and leading Mark Rothko to joke “This man Turner, he learnt a lot from me”. A  contemporary reviewer may have put it best when he placed Turner among ‘the masters whose day is not so much of to-day, as of “all times”’.1 Indeed, Turner’s legacy endures today through his influence on art for over two centuries, to the prize that bears his name to celebrate British contemporary art, to this magnificent gallery, the Turner Contemporary. Soon Turner’s work will feature on another 2 billion works of art – the new £ notes from the Bank of England. 1  The Champion, Newspaper Article, published 7 May 1815. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Banknote design The new £ note celebrates Turner, his art and his legacy in all their radiant, colourful glory.
I think there is a broad agreement on the fact that interest rate decisions are state-dependent rather than time-dependent and as a consequence, both the frequency and the amplitude of the policy changes are mainly driven by the underlying state of the economy. As far as the Eurosystem is concerned, the more gradualist approach is nothing but the reflection that the economy of the euro area has been less affected by cyclical fluctuations than the US economy. Moreover, recent research carried out by the Eurosystem on inflation persistence tends to show that the degree of inflation persistence in the euro area is quite moderate while the degree of price stickiness is considerable and higher than in the United States. This finding may provide another justification for a gradualist monetary response to cost-push shocks as: first, the impact of an inflation shock will be small as agents anticipate a low persistence of this shock and therefore will maintain their expectations of future inflation at low levels; in turn, the negative response of the output gap will be limited implying a less persistent response of the real rate. 5. As a result, the Eurosystem monetary policy has won European citizens’ confidence in and acceptance of the new currency  Finally, the euro has been readily accepted by economic agents and is now part of European consumers’ daily lives. Surveys confirm that the general public has confidence in the euro, as a solid currency, and in the Eurosystem as their Central Bank.

Thus, for instance, fiscal policy coordination mechanisms have been the focus of particular attention, with monitoring and surveillance procedures to avoid excessive budget deficits (of over 3% of GDP) and high public debt proportions (over 60% of GDP) coming into play. Indeed, these thresholds, along with the procedures for their prevention and ultimate correction, took the form in 1997 of an agreement known as the Stability and Growth Pact. In contrast, the rules for coordinating “structural” policy (e.g. those governing the workings of the labour market or the markets for goods and services) were fairly lightweight as a result of their broader scope for application and of the difficulties involved in setting common objectives. Also, in the area of financial regulation and supervision policies, countries continued to enjoy a high degree of independence. The limitations of the monetary union’s adjustment mechanisms As events have shown, the constraints imposed by the institutional framework were not powerful enough to ensure the appropriate response by national authorities in the face of potential slippage from the stability levels required. It was hoped that the very fact of monetary union membership would activate sufficient response mechanisms.
It seems to me  8  BIS Review 133/2010  the natural way to do that is to make sure they can withstand falls in asset values by having sufficient loss-absorbing capital rather than to expect monetary policy – moves in interest rates – to substantially reduce asset price variability, much of which might be warranted. The short-term nominal interest rate is a very blunt instrument to use to try to limit gearing of financial institutions. Capital requirements, and explicit limits on gearing, are more direct means to control leverage. This is why I think the direction of the policy emerging from the Basel III process – which will put in place higher capital requirements on banks – is right. It is also why time-varying limits on gearing of financial firms – limits that might vary with asset prices and with the economic cycle – are likely to be useful in helping maintain financial stability. I believe that is a much more fruitful way forward than abandoning inflation targeting. But while I think this is plausible, the case is not proved. Simply because they are a more direct means to control leverage does not prove that capital requirements or limits to gearing are a far more effective tool to preserve financial stability than changing interest rates.

At the GPFG’s current value, this is equivalent to NOK 100 billion. Renewable energy infrastructure investments will reduce equity and bond investments by an equivalent amount. Therefore, the risk-adjusted return on the infrastructure investments should be at least as high as the return on the securities that we could otherwise have had. Our managers have assessed the risk associated with governance and sustainability in some companies as so high that we have divested. Most often, these have been companies with business models that are not sustainable in the long term. This group also includes companies that emit particularly large amounts of greenhouse gases or engage in activities that contribute to deforestation. In addition to such risk-based divestments, we sometimes exclude companies on the basis of ethical guidelines. These guidelines are set by the Ministry of Finance and serve as the basis for the Council on Ethics’ advice and our decisions on exclusions. Ethical exclusions are not based on financial risk considerations, but on whether a company’s operations or behaviour is in violation of fundamental ethical norms. Two of the criteria for exclusion are related to greenhouse gas emissions. One of the criteria applies to mining companies or power producers with substantial emissions from coal, in either 6/7  BIS central bankers' speeches  absolute terms or as a relative share of their operations. In all, 82 companies have been excluded from the GPFG’s investment universe based on the coal criterion.
Our monetary policy is oriented at controlling inflation. The exchange rate floats to absorb international shocks without causing major disruptions in domestic activity. The fiscal policy is based on a rule that implies saving transitory incomes and today enjoys the benefits of prudence. Fiscal savings, combined with the Central Bank’s international liquidity position, provide a reserve of resources that permits us to accommodate external financing shocks even worse than those we are seeing now. Our financial system has been prudent and has the necessary levels of capitalization to play its credit intermediating role properly. Prudence, both of the private sector and of the macroeconomic policies, can now yield their fruits in the worst financial episode the world has had to suffer in many decades. Thank you. References Berger, H. and E. Stavrev (2008). “The Information Content of Money in Forecasting Euro Area Inflation”. IMF Working Paper WP/08/166. Bernanke, B. and M. Gertler (2001). “Should Central Banks Respond to Movements in Asset Prices?” The American Economic Review, Papers and Proceedings of the Hundred Thirteenth Annual Meeting of the American Economic Association, 91(2): 253-257. Blinder, A. and R. Reis (2005). “Understanding the Greenspan Standard.” In The Greenspan Era: Lessons for the Future, Proceedings of the Jackson Hole Symposium 2005, Federal Reserve Bank of Kansas City, pp. 11-96. Borio, C. (2008). “The Financial Turmoil of 2007-?”: A Preliminary Assessment and Some Policy Considerations.” BIS Working Paper No. 251. Christiano, L., R. Motto, and M. Rostagno (2007). “Two Reasons Why Money and Credit May Be Useful in Monetary Policy”.

The purpose of such a monetary adjustment is not to break the expansionary trend but to achieve growth that is more sustainable. In BIS Review 101/1997  -3-  other words, a shift from an expansionary stance to one that is more neutral is designed to bring the economy onto the growth path that matches its structure -- not to bring growth to a halt. Neither should this be described as a contractive turn; it is rather a move that yields a less expansionary stance. In the public debate the Riksbank’s monetary policy is sometimes described as though repo rate adjustments were a form of “punishment” or “reward”, aimed at measures that have been taken either by the political system or by labour market organisations in connection with wage negotiations. My point here has been that interest rate adjustments are a natural feature of monetary policy’s path over the economic cycle. Of course this does not mean that the construction of monetary policy is not affected by fiscal expansion or contraction, or by low or high wage settlements. What I want to make clear is that adjustments to the instrumental rate in the course of the economic cycle are a natural phenomenon and their purpose is to create conditions for sustained growth and low inflation. If a central bank waits too long before shifting from an expansive to a more neutral monetary stance, problems with bottlenecks are liable to become more widespread and the economy may become overheated.