samchain/econo-pairs-v1 huggingface dataset:
Most things suggest that traditional demand policy is not capable of lowering unemployment appreciably. Most economic observers also expect that even with decent growth, unemployment will remain high in the coming years. Whatever the causes of the high unemployment, an important key to turning this tendency lies in the functioning of the labour market. I have not considered conceivable specific measures, such as stimulating private sector employment, contributing to efficient wage formation and encouraging individuals to look for and accept jobs and maintain and develop their competence. I believe that, as Assar Lindbeck pointed out recently,10 the problem of unemployment in Sweden and, indeed, in the whole of Western Europe has to do with a great many factors connected with how the labour market functions. Although the most effective measures cannot be identified for certain in advance, the central concern is the workings of the labour market and thereby also the labour market organisations. This applies to employer and employee representatives alike. The climate in the labour market will be of significance for the possibility of bringing the high unemployment down. One issue is whether a mood of mutual understanding can be created so that employment has priority in wage setting. An important lesson seems to be that Sweden ought not to opt for a standard in wage formation that matches the average level in Western Europe; such a relatively high level could impede a reduction of unemployment. The model should rather be the Netherlands.

Other notable factors are the structure of the population, new housing construction and access to loans. Regardless of what it is that generates an increase in house prices, this probably stimulates household consumption via the wealth effect, just as a house price fall has the opposite effect. An increase in the value of houses and tenant-owned apartments can be realised in part by using the property as loan collateral. If this happens when interest rates are low, households will be more interested in mortgaging the increased value of their property in order to buy durable goods such as cars and household appliances, for example. House prices therefore have significance for demand and thereby for monetary policy. The lending potential and interest rates of banks and mortgage institutions are also important. Access to loans increases the chances of realising an increase in value but also makes it possible to finance a house purchase. In addition to the inflation target, the Riksbank has the task of promoting finan-cial stability, which is a prerequisite for a proper implementation of monetary policy. A functional payment system, capital supply and arrangements for spreading risks are a precondition for the efficient working of the economy in general. An important instrument for the Riksbank’s work on stability is the twice-yearly publication of a report that evaluates the risks in the financial system. Lending to households and the development of house prices have been recurrent themes in the Financial Stability Report in recent years.
Through these changes, the New York Fed is seeking to expand and diversify the pool of firms eligible to apply for primary dealer status, while also recognizing that a certain scale of activity is needed in order to be able to meet the many business obligations to which primary dealers must commit, in supporting the operations of the Federal Reserve and the Treasury. These changes offer the opportunity to increase capacity and further support competitive pricing for the Fed’s open market operations. Going forward, the New York Fed will periodically review its counterparty policy. Turning to monetary policy, at the conclusion of its September policy meeting, the Federal Open Market Committee (FOMC) announced that it would begin to reduce the size of the Federal Reserve’s securities portfolio.2 Over the past month, the Fed took the first steps in a multiyear effort to bring the Federal Reserve’s balance sheet to its longer-run size, by not reinvesting a portion of the securities repayments it received. In the remainder of my prepared remarks today, I will offer my views on this policy from a financial markets perspective, drawing on a fuller set of remarks I delivered last month, which can be found on the New York Fed’s website.3 1/7  BIS central bankers' speeches  The message I’d like to leave you with today is one of confidence.

Simon Potter: Reducing the size of the Federal Reserve's balance sheet - the benefits of moving gradually and predictably Remarks by Mr Simon M Potter, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, to the National Association of Securities Professionals, New York City, 16 November 2017. * * * Good afternoon and thank you for the kind introduction. I would also like to add my warm welcome to the New York Fed. We very much value the National Association of Securities Professionals' (NASP) efforts to promote professional excellence and encourage economic empowerment for people of color and women on Wall Street, and for our community, and are pleased to host this year’s kickoff to the NASP's 21st Annual Symposium.This year’s symposium is organized around the timely theme of “Keeping Pace when Market Dynamics Shift”. In that vein, I welcome the opportunity to discuss with you some important changes that are in train with respect to the Federal Reserve’s balance sheet, and how these may impact financial markets. As always, the views I will express today are mine alone and do not necessarily reflect those of the New York Fed or the Federal Reserve System.1 Before I discuss the Fed’s balance sheet I would like to briefly review some pilot programs we conducted over the last few years and their impact on our counterparty policy.
We have had an impressive annual increase in factor productivity of per cent , while capital intensity has increased by a modest 0.1%. The fact that this change began in the same year that the Economics Commission presented its proposals is probably mainly coincidence, but the fact that a macroeconomic stabilisation has a rapid and enduring effect on the development of productivity has been proved by the economist Easterly, amongst others. That is to say, the combination of price and budget stability is an important explanation of developments in total factor productivity. It is probably due to stable prices providing a better information value in relative prices, which improves the allocation of resources. The combination of price stability and budget stability also increases willingness in the household sector and corporate sector to make long-term decisions. If we consider other factors that stimulate the rise in total factor productivity, there are a number of changes that play a central role. In general, one tends to seek explanations for increasing factor productivity among factors such as technological developments, education, competence and incentives among the labour force, allocation of resources in society, as well as between and within branches and companies. There is therefore a large group of possible factors, but many of these are connected to general incentives behind the transformation and to the capacity to utilise technological progress in the world around us. The allocation of resources in society includes an area where important changes were implemented mainly before the days of the Lindbeck Commission.

FPS operates 24 x 7, which means that users can initiate or receive a payment or fund transfer any time throughout the year. It will be very user-friendly as mobile phone numbers or email addresses can be used for receiving HKD or RMB funds. Settlement between banks is real-time, and Hong Kong is one of the few jurisdictions achieving real-time settlement in a retail payment infrastructure. Both banks and SVFs can participate in FPS. This creates a retail payment ecosystem that facilitates money transfers among users of banks and SVFs. The full interconnectivity of all payment participants is, again, likely to be one of first in the world. In addition to FPS, the HKMA is leading a working group to work on a common QR code standard for retail payments. A common QR code standard will facilitate merchants, especially SMEs, in using one single QR code to accept different payment schemes. This would certainly help promote the wider use of mobile retail payments in Hong Kong. 3/6  BIS central bankers' speeches  (B)  Supervisory Sandbox 2.0  The HKMA will upgrade the existing Fintech Supervisory Sandbox to Sandbox 2.0. There will be three new features in this enhanced version. First, we will set up a Fintech Supervisory Chatroom that would engage the stakeholders at a much earlier stage of project development. The Chatroom will be manned by experts from our Fintech Facilitation Office and Banking Supervision Department.
At the same time, data from the August Business Perceptions Report (IPN), based on interviews with more than 100 company executives and an online survey of another 760, shows that almost 70% of those surveyed indicated that their company had cut costs, whether through reduced commissions and bonuses, cutbacks in overtime, or reductions in base salaries, among other measures (Figure 8). Household spending has been severely affected by the decline in income, which is reflected in the sharp contraction of demand in the second quarter, particularly from private consumption. Especially marked is the drop in services consumption, where social distancing measures have significant effects, such as the dramatic drop in spending on restaurants and hotels, transportation, health care and leisure activities. Nevertheless, the short-term outlook for consumption has improved in the third quarter due to a set of support measures and which is reflected in better business expectations—especially for trade—and, more recently, in improved consumer expectations. In recent months, a significant number of direct aid programs, subsidies, repayment deferrals and tax breaks have been implemented. As a result, the balance between the fall in income and aid received improved significantly between the second and third quarters (Figure 9). In addition to the above, part of the pension savings was approved for withdrawal. It is estimated that this will involve resources in the order of 6% of GDP, of which nearly half will go to consumption.

As for spending, after contracting by 4.2% this year, total consumption will resume positive growth in 2021 and 2022, consistent with a recovery in employment and household income, and with the positive short-term effect of the withdrawal of pension savings. Plus, the low base that will be left by this year’s contraction. The projection is that the recovery of economic growth will result in an increase in employment, albeit with lags that will vary according to the categories of occupations, sectors and activities involved. Thus, it is likely that, with the lifting of the strictest sanitary measures, employment in sectors such as construction and trade will show a significant upturn, as will self-employment. However, in activities more permanently affected by social distancing, changes in production methods or technology, the lags may be last much longer. In the short term, the expected recovery in consumption would be more biased towards goods—with a higher proportion of imports and a lower relative intensity of employment—than towards services. Thus, after rising by 6.8% in 2021, total consumption will reduce its expansion to 1.7% in 2022, considering that the temporary stimulus to household spending provided by the various income support measures will have dissipated and that 2021 will leave a higher basis for comparison. Gross fixed capital formation (GFCF), in particular its construction component, will recover as quarantines are lifted, especially in those works that were shelved.
The truth is that questions of European financial solidarity will mainly come in the post-crisis period, which I shall now address. 2.2 Initial strategic thinking on the post-crisis environment Beyond the present emergency and consensus, we must start to consider “postcrisis”. It raises some very open questions, some of which are premature. Let me begin, very simply, with what we know and what we do not know:  Page 5 of 8  We know that growth will be strongly negative in 2020, then positive in 2021. However, we do not know the numbers involved: they depend on the peak lockdown period – 1.5% of GDP is lost with every two weeks –, our ability to bounce back afterwards, and the chain of events with regard to public health and the economy in the rest of the world.  We now know that despite our initial hopes, we will not suddenly go from the current phase of general lockdown to a final phase of complete freedom of movement. Between, there will be a phase 2 of relative lockdown, which will gradually be wound down, potentially over a long period of time. However, we do not yet know how: this is where the interaction between the battle for public health and the battle for the economy will have to be optimised, and where public debate will have to bring together doctors and economists. Their opinions may converge more easily than we believe.

 Lastly, we know that we will emerge from this crisis with significantly higher levels of debt. This is clearly the case for government debt, with an increase of between ten and several dozen percentage points of GDP. But it is also the case for business debts: the longer the economic hiatus lasts, the more their problems will evolve from simple cash requirements to lasting balance sheet challenges and losses to be covered through capital increases. In financial terms, several businesses will go from facing liquidity constraints to solvency constraints. And the current cash flow problems will become stock problems. Relatively speaking, the economic agents generally least affected by this crisis are households, which experience high levels of “forced saving” during the period. Of course, this does not mean that, on a micro-economic level, some low-income households and financially vulnerable people are not already feeling the effects of lost income; and these households, which struggle to make ends meet, have no precautionary savings. *** This leads us to consider the lessons that history can teach us about recovering from crises, starting with the post-war years. This has become a particular focus of economic research today, even though, fortunately, our situation is less  Page 6 of 8 dramatic: the three "classic" themes – which give rise to so many questions – are the return to growth, debt treatment, and the proper use of monetary policy. 1/ How to support growth?
Shortfalls have been recorded in every year but one since at least 1995. The deficit widened again in 2009 to 6.9% of GDP from 5.7% the previous year. A current account deficit indicates that we spend more than we produce. It also implies that domestic savings are insufficient to finance investment, even though, as we have seen, the rate of investment is relatively low. The only way in which current consumption levels can be sustained, therefore, is by raising incomes. This, in Malta’s case, requires a more dynamic export performance. For a start, this means that efforts to attract foreign direct investment, much improved in recent years, need to become even more focussed and supported with a strengthened infrastructure. The domestic private sector, meanwhile, needs an incentive to switch to producing for markets abroad. This incentive is relative profit. Export-oriented activity must become relatively more profitable than production for the domestic market alone. In a small island economy, where transport costs impose natural barriers to trade, it is easier to set up and defend monopolies. This was especially true before the liberalisation of product markets at the time of EU accession. But this is not to say that elements of monopoly power – and the attitudes this engenders – have not survived. For example, a survey carried out by  9  Securing a sustainable future for higher education, 12 October 2010, http:// www.independent.gov.uk/brownereport.

In this framework, it is worthy to note that during the five years of its existence, crucial results have been achieved, most noteworthy the approval of the National Retail Payments Strategy (2018–2023). The insofar findings clearly evidence the low financial inclusion of the Albanian population, not only compared with the European Union, but also with regional countries. All these are reflected in a high use of cash in the Albanian economy. Empirical studies by the Bank of Albania in collaboration with the World Bank Group show that the use of cash in economy, beyond the diminishing effects on the mechanisms of the Bank of Albania used for maintaining price stability and safeguarding financial stability, and supporting economic development, has a real cost from its use as a means of payment, amounting to more than 1% of GDP. Furthermore, the use of cash may be seen as a promoter of informality in economy. Hence, this strategy aims to establish a contemporary and comprehensive retail payments market, supported by safe and efficient infrastructures, as well as by a wide range of payments instruments and services that fulfil the needs of financially capable users across the country. This strategy, compiled with the valuable support of the World Bank Group, is the outcome of a long and analytical study and aims to best address the needs of the domestic market. The realisation of this vision is assessed to be materialised through a set of legal, regulatory and infrastructural developments, which promote technological developments and innovation in the payments market.
The Fund, which has since changed its name to the Government Pension Fund Global (GPFG), has grown to almost NOK 3 000 billion. Its rapid growth was neither expected nor planned and was due to the sharp improvement in government finances during the economic upturn from the late 1990s. After the turn of the millennium, the rise in oil prices also provided a boost. The size of the Fund is now equivalent to approximately 18 months’ mainland GDP and may double in the next five to ten years. Total public expenditure is equivalent to less than half of total GDP. If the government spends 4 per cent of the Fund annually – the expected real return – this will finance close to 20 per cent of public expenditure ten years ahead. The return on the Fund will by then have become such an important source of funding that it is difficult to imagine that the government authorities would find any sound arguments for drawing on the accumulated capital. It is also a flow of revenues that does not have an adverse effect on private sector production capacity, unlike taxes. (See Chart: Pension obligations and the Government Pension Fund.) However, only a share of future pension payments will be matched by revenues from the Government Pension Fund. The Government Pension Fund is estimated to cover around half of the national insurance scheme’s retirement and disability pension obligations. 16 (See Chart: Pension costs and expected fund returns.)

Financial union is essential in a single currency area where cross-border capital flows can lead to credit booms and other imbalances – and where the negative effects of a bust can spread rapidly to other members. One essential part of financial union is a single banking supervisor. As you know, the European Commission has recently proposed that the new supervisor should be based at the ECB. This is important to ensure consistency across the euro area and to prevent regulatory capture. Day-to-day tasks, however, would remain with national supervisors who have the competence and resources to implement them. But financial union does not have to imply the pooling of deposit guarantee schemes, an issue that I know is of concern in this country. Organising and funding deposit guarantee schemes can remain a national responsibility, with comparable effectiveness. In the longer term, all four pillars are equally important. They are the bedrock for the enormous potential of the single currency for Europe’s citizens. Completing economic and monetary union would give citizens greater security against any future crisis. It would create the foundations for sustainable growth and employment. For all citizens of the euro area, it is therefore essential that Europe’s leaders stay on course. Thank you for your attention. BIS central bankers’ speeches  5
Muhammad bin Ibrahim: Monetary policy autonomy – intricacies, instruments and independence Luncheon address by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at Bank Negara Malaysia's Monetary Policy Conference 2017 "Monetary Policy Autonomy: Intricacies, Instruments and Independence", Kuala Lumpur, 24 July 2017. * * * Monetary policy was thought to be a relatively simple and straightforward business. It was widely concluded that all that the central bank needed to do was conduct monetary policy in a way consistent with the inflation-target and ensure that employment levels are satisfactory. Life should have been easy for central banks. The holy grail of monetary policy was achieved. Central banks had finally understood how monetary policy should best be conducted. This was one of the primary explanations for the Great Moderation – the period of prolonged macroeconomic stability that preceded the 2007–2008 Global Financial Crisis. Today, the situation is markedly different. Conducting monetary policy is anything but easy. For the advanced economies, despite almost 10 years of easy monetary policy, inflation is still persistently below target and economic recovery remains slow and fragile. The latest enigma is strong growth devoid of inflationary pressure. For open economies, especially in emerging markets, we are left to manage the spillovers of extraordinary policy measures implemented in the advanced economies.

In this environment, it is imperative for policymaking to also be agile and pragmatic. One aspect of pragmatism is the need to be bold and timely in introducing new policy tools, even unconventional ones when it becomes necessary. When a new crisis occurs, it is likely that the factors causing it are unprecedented. It goes without saying, that the solutions required to remedy the problem requires new measures as well. Using conventional and ‘consensus thinking’ are unlikely to be an effective remedy. Policy-making is also increasingly characterised by shorter time horizon. With the rapid developments in the financial markets, the window of opportunity and effectiveness for policy has shrunk considerably. Gone are the days when policy-making can take months to formulate and implement, let alone years. As financial markets evolve, the shelf-lives of policies have also become shorter as policies can become ineffective very quickly. Such an uncertain environment necessitates the deployment of new and untested policies. The “audacity of pessimism” – as Mervyn King calls it – a situation when policymakers start scrambling to address problems only when things have gone terribly wrong – may prove too little too late to salvage the situation. Constant, holistic and courageous assessments of implemented policies are therefore crucial in ensuring that policies remain relevant. Another area of policy pragmatism that seldom gets discussed is the ability and conviction in reversing policies when deemed appropriate.