samchain/econo-pairs-v1 huggingface dataset:
8 9  https://www.ukfinance.org.uk/sites/default/files/uploads/pdf/UK-Finance-UK-Payment-Markets-Report-2019-SUMMARY.pdf https://www.gov.uk/government/speeches/mansion-house-dinner-speech-2019-philip-hammond 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  Third, how should we respond to completely new systems for holding and transferring value which work not in central bank or commercial bank money but a new form of asset – a ‘stablecoin’? Under what regulatory conditions should they be allowed to operate – if they are allowed to operate at all? Fourth, and perhaps most fundamentally, if technology is able to offer new ways to store value and make transactions – two of the three core functions of money – where should the public-private sector boundary lie? Over the course of the last few centuries, the store of value for most citizens has increasingly taken the form of private, commercial bank, money. Over the last few decades, the same shift from public to private has happened for transactional money. The shift is accelerating and potentially new forms of private money are on the horizon. Against that backdrop, does technology offer us the chance to shift that balance back towards state money and, if so, should we take it? Central banks all over the world are grappling with these questions. These are not just national issues. Central banks and other actors internationally are also addressing the important and related question of how these technological opportunities could be used to improve the systems for transferring money and making payments across borders.

Our job is to ensure it works safely and reliably, through ups and downs, so that everyone in society can depend upon it. That means ensuring its value can be depended upon – monetary stability. It means ensuring that the banking system, which creates and issues most of the money we actually use, as well as the payment systems through which that money moves, are safe and can be relied upon – financial stability. It means ensuring that the physical money the Bank of England actually produces – the cash we use – cannot be forged and can be used with confidence. Money, of course, can be a slippery concept. It is, I think, best described as a social convention, the way we calibrate, exchange, store and settle claims we hold on each other in the economy. That convention has been expressed in very different ways at different times and in different societies. It can be expressed in different ways at the same time. At the moment in the United Kingdom, all money is denominated in one unit of account, the pound sterling 1, but it takes different forms. It can be expressed physically as actual claims on the state, in the form of the Bank of England: the banknotes we issue with the famous promise to ‘pay the bearer’. A very small proportion takes the form of physical tokens issued by the state that do not contain any claim – the coins issued by the crown.
Since its introduction in 1993, however, the inflation target has proved to be a good compass for achieving and maintaining price stability. Confidence in the monetary policy regime has gradually grown and now seems to be firm. Inflation and inflation expectations are low. Since the cyclical upturn in the summer of 1993, annual GDP growth has averaged almost 3 per cent, government finances have been rapidly consolidated and Sweden has begun to repay external debt. Important forecasting variable During lengthy periods of financial unrest and problems with confidence in Sweden’s economy the Riksbank judged that the krona was undervalued. At times, moreover, the exchange rate fluctuations have been relatively marked, even after it seemed that economic policy’s credibility had been established. In the period since the fixed exchange rate was abandoned the Riksbank has not targeted the exchange rate. For monetary policy, the primary consideration since 1992 has been the picture of inflation prospects in relation to the targeted rate of 2 per cent. But the exchange rate is still one important factor in the Riksbank’s assessment of inflation. An exchange rate movement that is judged to have consequences for inflation prospects will accordingly influence the formation of monetary policy, ultimately the level at which the Riksbank sets the repo rate. The exchange rate normally affects inflation through import prices as well as via foreign trade and resource utilisation. All else equal, a weak exchange rate will lead in theory to higher import prices and thereby to higher consumer prices.

The Government may therefore raise the question of membership of the fixed exchange rate mechanism when future participation in the monetary union is judged to be imminent. Government decides exchange rate system, the Riksbank its application As regards ERM2, what are the Government and the Riksbank, respectively, responsible for? The Riksbank Act, amended as of 1999, states that the exchange rate system is decided by the Government and applied by the Riksbank. This is the same arrangement as in virtually the whole of Europe. The decision as to whether and when the krona is to be linked to ERM2 is thus a matter for the Government. The Riksbank in turn determines how the exchange rate system chosen by the Government is to be applied, which involves setting the central rate and band width in a fixed exchange rate system and deciding any interventions. In practice, if Sweden is to participate in ERM2, the law requires the involvement of both the Government and the Riksbank. They must also agree on the conditions. Moreover, ERM2 membership would not be decided unilaterally by Sweden; it is something that has to be negotiated with the other EU countries. n the event of Sweden wishing to join ERM2, what would be the procedure? The negotiations would be conducted in the Economic and Financial Committee, which has succeeded the Monetary Committee. Each country is represented there at the level of under-secretary in the Finance Ministry and central bank deputy governor.
The conclusion of this point of view is, put simply, that more recent innovations have not been as significant as those during earlier industrial revolutions.4 Others, such as Andrew McAfee and Erik Brynjolfsson at MIT, say that the effects of digitalisation have passed under the radar and that we will see major productivity increases in the future when the new technologies are used more broadly in the business sector.5 Economic historian Joel Mokyr also points out that the productive potential in new technologies will lead to strong pressure for change in the economy.6 As you can hear, there are very differing views on the subject and the assessment of future productivity growth is a question we are constantly struggling with. We are in the “installation phase” Personally, I think that that model from Bart van Ark (2016) is useful when considering the different views. This distinguishes between an “installation phase” and a “deployment phase” for new technology. The first phase involves exploring new markets and growth is limited to a couple of companies. During the second phase the markets are consolidated and there is broad growth in the economy. One can imagine that Brynjolfsson and McAfee consider we are in the first phase, while Gordon thinks we have already passed the second phase. My assessment is that we are probably somewhere in the installation phase with regard to digitalisation.

Jesper Roine, professor at the Stockholm School of Economics has divided them up in a useful manner.3     Automation – a machine doing the work of a person. Digitalisation – converting information to a digital form. Technological advances – broader concept that covers the other two but also other things. The concepts are of course related. Digitalisation can enable automation and is an example of technological advances. In this speech I focus on digitalisation, but will also touch on the automation that follows on from digitalisation. I wish to include in the concept of digitalisation here machine learning, artificial intelligence, 3D printers and the use of cloud services and Big Data. A common collective name often used for several of these technologies is Industry 4.0 or the Fourth Industrial Revolution. Will productivity increase? How far have we come with regard to the digitalisation of the business sector? One hears an awful lot about technological developments in the media and in business journals. From what is written one might easily gain the impression that we can do more and faster. But official data on productivity does not confirm this. The fact that statistics and reality sometimes appear to be disconnected from one another is nothing new. In 1987 economist Robert Solow wrote “you can see the computer age everywhere but in the productivity statistics”, when describing the emergence of information and communication technology (ICT) and the relatively low productivity growth in the United States in the 1980s.
In view of the tightening taking place in the Swedish labour market, there may be reason to expect a reduction in the supply of labour from Sweden. Over the past six months, there have been steadily growing signs of labour shortages in the Norwegian economy. Unemployment has shown a marked decline and is now at a low level. Employment is still on the rise, while the labour force as it has been registered in current statistics has remained virtually unchanged in recent months. Seasonally adjusted, registered unemployment stood at 2.4 per cent of the labour force in September. The number of registered unemployed adjusted for seasonal factors was close to 59 000. Unemployment has declined for all occupational groups and has been most pronounced in manufacturing, the construction industry and in the engineering and ICT sectors. There are probably limitations to how much the supply of Norwegian labour can increase in the period ahead. Labour participation rates are high, particularly when taking into account demographic developments. Developments in the labour market are similar to the profile observed ahead of the period of accelerating wage and cost inflation that started in 1998, but wage growth has been fairly moderate since the upturn began. Several factors may have contributed to this.

House prices increased further this summer, and the twelve-month rise moved up to 17.7 per cent in August. Residential construction is still high. In 2005, the number of housing starts was the highest since the beginning of the 1980s. As the interest rate level gradually normalises, household interest expenses will increase. Combined with projected lower employment growth and higher inflation, this might reduce growth in household purchasing power in the years ahead. Higher wage growth would have the opposite effect. Overall, moderate growth in household purchasing power is expected to result in lower consumption growth ahead. A gradual increase in the interest rate will probably curb activity in the housing market. Housing investment is expected to grow through this year, albeit less rapidly than last year. Housing investment growth will thereafter moderate further, and may fall somewhat towards the end of the projection period. House price inflation is expected to slow. Household indebtedness has increased in tandem with high activity in the housing market. Growth in household debt (C2) has abated somewhat in recent months, but remains at a high level. Higher interest rates and lower house price inflation will gradually reduce household debt growth in the next few years. Growth in credit to mainland enterprises has also shown a sharp increase over the past year, partly reflecting increased fixed investment. With prospects of continued high capacity utilisation in the Norwegian economy, solid profitability, ample liquidity and a high level of optimism among enterprises, strong growth in investment is expected again this year.
Moreover, falling interest rates have lowered house mortgage interest costs. Then there is the Government’s proposed reduction of tobacco tax. However, the price shocks from the supply side are mainly transitory and tend to lower the CPI temporarily but not necessarily inflation’s underlying trend. It follows that these effects probably should not have much influence on monetary policy. This holds even though the CPI change figures are likely to move outside the lower tolerance limit for a time during 1998, mainly on account of the lower tobacco tax. How strong is the upward trend? As I mentioned earlier, the primary concern for monetary policy is inflation’s underlying rate and trend. In that the monetary conditions have been expansionary for some time and both economic activity and resource utilisation are rising, Sweden should be moving BIS Review 35/1998  ˝  -8-  towards a situation with some increase in underlying inflation. This phase may not be imminent or involve anything dramatic but rising resource utilisation will ultimately lead to it. But there are some factors which may defer it. They have to do with the momentum in the Swedish economy and the impact that may come from the crisis in Asia. Another central factor is the exchange rate’s underlying trend. In addition there is the increasingly discussed uncertainty about the sustainability of international share prices. To sum up, most of the evidence suggests that economic growth in Sweden will become stronger in the coming two years.

Zdeněk Tůma: Consolidation before expansion Summary of a speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, for the conference on "Modernising Germany - Gaining Competitiveness for Europe", Berlin, 1 June 2006. *  *  *  Do we really face the dilemma of choosing between consolidation and expansion? We should look at the integration process from both the political and economic perspectives. From the economic point of view, deepening and enlarging are both primarily spontaneous processes, but this does not necessarily hold for the political aspect. Unfortunately, these two perspectives are often confused, which can lead to misleading conclusions. Let me consider the economic perspective first. As a recent EU newcomer I can confirm that we observed spontaneous integration with the EU well before the timing of our accession had even been mentioned. Therefore, I do not expect the expansion of the EU to end just because there is a lack of political will for enlargement. Market forces will keep the surrounding countries “in the game”. The political and institutional framework can encourage or discourage this process, but it can hardly stop it. On similar ground, the deepening of the already integrated area is quite spontaneous from the economic point of view. For instance, we are seeing dynamic integration of the financial architecture and a growing number of cross-border mergers in both the financial and non-financial sectors. Here, too, an appropriate institutional framework would help, but the consolidation process is going on even without it.
Jessica Chew Cheng Lian: Financial inclusion strategies in ASEAN economies Speech by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the ASEAN Financial Inclusion Forum, Kuala Lumpur, 25 April 2017. * * * It is a great honour for Bank Negara Malaysia to host the first ASEAN Financial Inclusion Forum. We warmly welcome you to Kuala Lumpur. Let me also especially thank the distinguished speakers from Indonesia, Philippines, Singapore and Thailand; and experts from AFI, UNCDF and the World Bank for graciously taking the time to share your invaluable experience in pursuing financial inclusion strategies with participants of this Forum. ASEAN today is one of the fastest-growing and most dynamic regions in the world. We are home to 630 million people and a burgeoning middle class, with individual economies that are diverse in terms of demography, income level, resource endowment, financial sector development; and economic size, structure and systems. A vibrant SME sector contributes 50 to 80 percent of ASEAN’s workforce and accounts for 96 percent of enterprises in the region, linked by more extensive cross-border production networks and the intensification of intra-regional trade and investment activities. Growth for the region is still expected to outperform average global growth in 2017 and 2018, and this is expected to be sustained going forward.

Minister, this Loan Scheme being launched today provides a real opportunity for human capital development, which is necessary for national development. It enables children who would otherwise be excluded from the educational system have decent opportunities to receive education, as their parents can now access loans specifically targeted at meeting their educational expenses. Ladies and Gentlemen, a nation’s development depends on the levels of skills among its people and it is our expectation that the launch of this Scheme will contribute towards this noble cause. To this end, I would like to encourage parents and guardians to use the Student Loan Scheme in order to realise the vision of educating their children. Chairperson, what we are witnessing today represents an initiative by banks to respond to the needs of the community. As the Central Bank, we commend your bank for this initiative, which was borne out of the identified need to develop financial products that address problems in our society. Chairperson, Ladies and Gentlemen, let me end by reminding players in the banking sector that as new products and services emerge, different or heightened levels of risk also emerge. The challenges that financial innovation poses for public policy and the regulatory framework in ensuring financial stability are enormous and cannot be over looked. In this regard, let me call upon the management of Indo-Zambia Bank to not only look at the benefits, but more also on the risks that accompany financial innovation.
It continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. The ECB’s accountability arrangements The ECB has been able to deliver a strong policy response during the crisis thanks in part to its ability to act in full independence, as set out in the Treaty. This independence in turn relies on effective accountability mechanisms to ensure that the ECB fully pursues its mandate, as also enshrined in the Treaty. Delivering on the ECB’s Treaty obligations is a shared challenge for both the ECB and the European Parliament. While requiring effort and commitment from both sides, it is in both our institutions’ interest. To be effective in assessing the ECB’s actions and relaying people’s concerns, accountability practices need to meet three criteria. First, they need to be commensurate with the ECB’s tasks and responsibilities, implying that they have to evolve in line with the complexity and scale of the ECB’s measures. Second, they need to be underpinned by timely and adequate information and transparency arrangements. And third, they need to be based on mutual trust to ensure constructive discussions on critical and difficult issues. Over the years, our two institutions have worked together to build and strengthen their accountability relationship, well beyond the requirements of the Treaty. Indeed, I would argue that this relationship meets the three criteria I have just spelled out.

First, we have provided access to central bank liquidity at very favourable terms and over long tenors to help maintain the supply of credit from the banking sector. To this end, we have adjusted the terms and conditions of our targeted longer-term refinancing operations (TLTRO III), which strengthen the incentives for banks to lend to the real economy. For a year, banks will be able to borrow at negative rates, which can be as low as –1% on the condition that they lend to the economy. Largely in response to this recalibration, we have seen a very high take-up by banks. And second, we have launched the pandemic emergency purchase programme (PEPP) to ensure the smooth transmission of our monetary policy and to ease the overall monetary policy stance thereby helping to offset the downward impact of the pandemic on the projected path of inflation. The PEPP, launched with an initial envelope of € billion in March, was increased by € billion in June to a total of € billion. We will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over. In the current environment of elevated uncertainty, the Governing Council will carefully assess all incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook.
The fact that inflation has been running below target in most advanced countries suggests that this challenge is not due to factors specific to a single country. Instead, there are more systemic factors at play, with the root cause being a combination of low neutral interest rates and the lower bound on interest rates. Investors are increasingly viewing these low inflation readings not as an aberration, but rather a new normal. This is evidenced by a broad-based decline in market-based measures of longerrun inflation expectations since the mid-2000s, with the UK providing the exception, as shown in Table 1. This downward slippage of longer-run inflation expectations, if it persists, implies that in the future central banks start further from their inflation goals and have even less room to maneuver, making the problem of low r-star and the ZLB even more difficult. Conclusion The ZLB has been a topic of study for nearly two decades. But recent history and the outlook for the longer-term future, make it more relevant than ever. Low inflation expectations, very low r-star, and slower growth all point to a challenging world where policymakers need to make the best use of the tools at their disposal to achieve their goals of strong economies and price stability. The key lessons from this research hold today and in the future. First, take swift action when faced with adverse economic conditions. Second, keep interest rates lower for longer. And third, adapt monetary policy strategies to succeed in the context of low r-star and the ZLB.

The Global Economic Context Over the past quarter century, a great deal of research has gone into understanding the causes and consequences of the zero lower bound.1 The achievement of low inflation in the United States—which, all else equal, implied lower interest rates—coupled with Japan’s long period of deflation and near-zero interest rates, reignited concern about the ZLB back in the 1990s. And the experience of the global financial crisis and its aftermath—with many advanced economies facing, or in some cases, crossing the zero lower bound—has moved this from a mostly theoretical exercise to a very practical one. An added impetus to this research has been the growing evidence that the neutral rate of interest rate has fallen significantly. I, working with various coauthors, have devoted a significant chunk of my academic career to studying r-star, or the long-run neutral rate of interest, and its implications for monetary policy. Our current estimates of r-star in the United States are around half a percent. That’s actually now lower than at any time before the Great Recession.2 We’ve seen similar declines in r-star in other advanced economies, including in Japan and the euro area. As shown in Figure 1, the weighted average of estimates of r-star for Canada, the euro area, Japan, the United Kingdom, and the United States is now also half a percent, nearly 2 percentage points below where it stood at the turn of this century. These very low neutral rates are a result of long-term structural factors slowing growth.