samchain/econo-pairs-v1 huggingface dataset:
Over the past year, there has been  4  BIS Review 14/2003  extensive restructuring and downscaling, especially in the ICT sector and the airline industry. With the prospect of continued weak developments in the global economy and an uncertain stock market, reductions in capacity may still be necessary. The fall in share prices reflects weaker expectations concerning future earnings. This may prompt enterprises to postpone or cancel investment plans. When share prices are low, companies may also find that raising capital by means of new issues is not an attractive alternative. Strong growth in private consumption has contributed to sustaining activity in the Norwegian economy. Sharp wage growth, combined with reductions in direct and indirect taxes, resulted in close to 5% growth in household real disposable income last year. Real income growth will be considerably lower in 2003 and probably lower than projected earlier. Imbalances in the Norwegian electricity market have resulted in a sharp increase in electricity prices. This implies a considerable reduction in household real income growth. The interest rate reductions this winter will have the opposite effect. In addition, developments in employment are expected to be weaker and wage growth somewhat lower this year than previously projected. During the last six months, households have become less optimistic about the economic outlook. Increased uncertainty in the labour market and lower confidence point to heightened caution and increased saving in the household sector. Lower interest rates have the opposite effect. Household saving behaviour may also be affected by high electricity prices.

The letter says: “The rise in the cost of living in the past three years has been larger than has been seen in many other countries that compete with us in foreign markets. When the cost of living rises, so wages should also rise and consequently so too production costs, with the result that our competitiveness declines. Do we not have to fear this?” Unfortunately we do not know what advice Nurkse gave to Jaakson, and within only a couple of years the question was no longer of any great relevance for Eesti Pank. During the second world war, Ragnar Nurkse focused in his work on inflation and exchange rates. The research that he published on these topics has led many writers to call Nurkse one of the main architects of the Bretton Woods system. After the war Nurkse taught for thirteen years in the prestigious Columbia University in New York. There he mainly focused on development economics, earning a great reputation as an international advisor on the subject. He died unexpectedly and still relatively young at only 51. The view of Ragnar Nurkse of the time notes his thorough knowledge of economic theory and practice, his original ideas, and his clear vision. He was the sort of man who is clearly needed in the world today. When Estonia regained its independence it chose the path of reform, with a unique combination of conservatism, innovation and a recognition of its own limitations. Estonia chose once again the road to Europe.
Another area that is wide open for innovation is the integration of takaful with elements of waqf, sadaqah and zakat to fund the provision of takaful coverage to the poor. I understand that a microtakaful waqf product to help out those in the low income segment was launched a few weeks back. I look forward to seeing more products such as these in the future. There is strong potential for takaful to take the lead in solving development challenges facing the world, including poverty and environmental degradation. Takaful can also be the missing link for businesses. The potential is enormous just by looking at the list of large infrastructure projects being undertaken. In Malaysia, just to name a few, there are the two new MRT lines, the ECRL and the KL-Singapore High Speed Rail in the pipeline. Internationally, there is the Belt and Road Initiative. All these entail large protection needs. Capturing these opportunities would require much greater capacity to underwrite large and specialised risks than currently exists in the industry today. This calls for greater retakaful capacity. Given the absence of such retakaful operators, alternative arrangements for the industry to come together to pool their capacity, expertise and business need to be seriously explored.

On the demand side, the relative importance of China and the US in powering the world economy may help to explain why world oil demand grew quite so strongly relative to world GDP last year. This year, however, the sharp rise in prices owes at least as much to supply factors. Allowing for these caveats, this is still a much stronger world economic background than, say, 2001. But there are several important risks to this outlook. The first concerns oil prices. So far the world economy has apparently taken a tripling in oil prices in its stride, thanks to the much lower oil intensity of output, and the greater flexibility in labour markets, in most advanced economies compared with a generation ago. It is also true that the short term capacity of oil producing countries to spend their increased revenues is now much greater than it was in the 70s. This helps to explain why consensus forecasts for world GDP growth next year have remained remarkably steady. But there is a very high level of uncertainty about future oil prices. Judging by the oil futures curve, the central view is that prices are likely to remain high, at around $ per barrel for the next few years at least. This is in contrast to 2000, when the oil futures curve was downward sloping. But the range of current Consensus forecasts is very wide – from around $ and $ per barrel.
And what has become obvious, given the present scale of public spending derived from the deterioration in employment, is that the viability of any credible budgetary consolidation strategy in the Spanish economy depends on swift and far-reaching changes to the trends currently prevailing in the labour market. Without a significant reduction in unemployment it will be very difficult to reverse the course of public spending and ensure a sustained recovery in the tax authorities’ capacity to raise revenue. The downturn in employment and the rise in unemployment are the most serious problem facing the Spanish economy, and that most hampering the recovery and fiscal consolidation. Unavoidably, then, reforms to labour institutions must be promptly undertaken that draw our unemployment rate closer to that of the more developed countries, thus checking flows to unemployment and enabling workers who have lost their jobs to return as soon as possible to an active working life. The reforms should encompass a wide range of institutions. Innovation in hiring arrangements is needed to provide for maximum job creation. We must rectify the pronounced segmentation currently characterising a labour market with a high temporary employment ratio, with most adverse consequences for job stability and for efficiency and fairness in the economy. In turn, collective bargaining needs reforming. This is so as to allow wage settlements to be tailored to a greater extent to each company and to the business cycle, but also to equip companies with the necessary flexibility to increase productivity and wages wherever possible.

In parallel, the illusion of progress may unquestionably have led us to be somewhat naive in failing to properly assess the potential adverse consequences that globalisation and, above all, the rapid parallel process of technical change may have had for certain segments of the population, and for free-market structures and institutions. Rising inequality within countries, including the developed economies, has dented citizens’ confidence in the ability of the political and economic system to respond to their yearning for generational improvement. That is contributing to reconsideration of certain key elements behind the functioning of our open societies. Thus, a second lesson to be drawn from globalisation is that we should design instruments and policies aimed at increasing opportunities for all and ensuring that the defining features of our societies, such as individual and collective progress, are strengthened. a. Strengthening and re-designing multilateral institutions Because I am firmly convinced that the globalisation of economic relations goes hand-inhand with enhanced overall well-being, I consider it a priority to strengthen the workings of multilateral institutions and, in particular, of the WTO. Here, too, we should acknowledge that, when assessing the capacity of the WTO to absorb changes, we have perhaps underestimated the risks associated with the – at times rushed – opening up of certain emerging economies, especially China’s entry on the international stage.
The point is that there has been increasing recognition that it is the complex interaction of policies across the board - often involving difficult political judgements as to how best to reconcile economic and other social objectives - that influences the supply-side capacity of the economy. And it is that which determines the underlying rate of growth that can be sustained and sets the limits to what can be achieved through macroeconomic demand management. Against that background our recent economic performance has improved. In fact, since the broad monetary policy framework of inflation targeting was adopted in the UK some seven years ago, the United Kingdom as a whole has in fact achieved the longest period of sustained low inflation we’ve BIS Review 33/20009  2  known for a generation. Retail price inflation, on the Government’s target measure, has averaged around 2.7%. But alongside low inflation we’ve had the lowest nominal interest rates that most of us can remember. Short-term rates have averaged some 6¼% compared with some 11¼% over the preceding decade. And 10-year government bond yields have fallen, with inflationary expectations, to around 5¼% which apart from a brief period last year is the lowest they’ve been for nearly 40 years. Much more fundamentally we’ve enjoyed the longest period of uninterrupted, quarter by quarter, economic growth since records began some 45 years ago - with annual growth averaging 2.8% between ¼ and ½% above most estimates of our underlying trend rate. The number of people in employment is the highest on record.

Its members, individually and collectively, are publicly accountable for the way in which that responsibility is exercised. The supply-side agenda, under successive governments has inevitably been more diverse. It has included a strong commitment to free markets and competition as the motive forces for productive efficiency, and as the essential means of allocating financial and real resources. It includes an equally strong parallel commitment - both regionally within the European Union but also more broadly - to international free trade in goods and services and to the global free flow of capital. The supply-side agenda has included an extensive program of “privatisation”, bringing market disciplines to bear on commercial activities previously undertaken within the public sector, but often involving new forms of regulation in areas of activity that might otherwise be dominated by natural monopolies. It has included extensive deregulation - for example in relation to financial services, including banks and building societies, though this has been accompanied by improvements in the financial infrastructure and by enhanced prudential supervision. It has included measures of labour market deregulation and Trade Union reform. And it has included increased emphasis on education and training; measures to encourage business enterprise - especially among smaller businesses; and reforms to the welfare system to improve incentives to work. The list could go on.
It should be realised that the delegation of monetary policy to an independent central bank is a way of generating confidence that the declared policy of the Riksdag and the government will in fact be implemented. In the coming years the rule system for monetary policy will be changed. As an adherent to the Maastricht Treaty, Sweden has undertaken to make changes in, for example, the status of the Riksbank’s governor. He or she shall not be dismissed except on explicit grounds of serious misconduct, etc. Neither is the Riksbank to be given instructions from third parties, e.g. government, except in a statutory form. It also looks as though the objective of the Riksbank is to be formulated in law and will be price stability. The question of eligibility to serve on the governing board will have to be reviewed. Active members of parliament are delegates in Sweden, which is entirely contrary to traditions in central Europe. The Riksbank differs from most central banks in Europe in that we are formally responsible for exchange rate policy. The Government sees this as a problem in EU cooperation and has therefore instituted an enquiry into exchange rate competence. In the light of what I have just said, these conclusions are not sound.

[13] This presents a challenge when considering implications for policy – and highlights the importance of continuing to plug the kinds of capability gaps I discussed earlier. As the results publication sets out, the Bank will engage with firms individually and collectively to help them target their efforts, and share good practices identified in this exercise. Implications for policy I hope it’s clear by this point that the CBES will be a valuable tool for helping us and financial firms to understand the challenges ahead. This exercise is not going to be used to set capital requirements for banks and insurers. But it clearly sheds light on that debate. The CBES results make clear that climate risk is a first-order strategic issue for the firms we regulate. But in my view it is not yet clear that the magnitude of transition costs require a fundamental recalibration of capital requirements for the system. [14] A persistent drag on profitability would be very nasty for firms, but so long as they are able to continue to make sufficient profits to maintain their capital buffers, its impact on safety and soundness might be less material. Had the results of this exercise suggested a fundamental threat to the solvency of these firms, our response would of course have been quite different. Set against that high level view, though, a world with climate change is without doubt riskier than one without.
Then, maybe you round off the day by some visits to your favourite online shops paying by choosing among the methods on offer. It is a complex piece of machinery that allows those payments to be made. In Sweden, this machinery is now undergoing what appears to be the largest overhaul in generations. The banks are working on modernising the entire retail payment infrastructure, harmonising it within the Nordics. And during next year, the  * I would like to thank Anders Mölgaard Pedersen and André Reslow for their help with writing this speech, and  Ann Börestam, Gabriela Guibourg, Eva Hellström, Elizabeth Nilsson, Tommy Persson, Björn Segendorff, Marianne Sterner, Johanna Stenkula von Rosen and Gary Watson for valuable comments. 1 To be precise, this speech is not only about payments, but touches upon also security settlement infrastructures. Not to bother you further with strenuous terms, I will be a little relaxed about my terminology and use ‘payment infrastructures’ also when I mean ‘financial market infrastructures’, etc. 1 [15]  Riksbank is launching a new service for settlement of instant payments that we call RIX-INST. Also, very recent, the Riksbank made a decision to take preparatory steps to connect Swedish krona to T2 and TARGET2-Securities, T2S. The latter are the Eurosystem’s platforms for large-value transfers between banks and settlement of security transactions, respectively. We will now perform an in-depth analysis of all relevant aspects that will provide the basis for deciding whether the Riksbank should enter into contractual negotiations with the Eurosystem.

Joining T2 and T2S is expected to benefit the participants of the Riksbank’s current settlement services. For instance, they will gain from increased cost-efficiency and harmonisation, that is, alignment with European standards and practices. In the end, that should also lead to improvements for banks’ customers. Importantly, a decision to connect to T2 and T2S should be taken into account by the Swedish banks in their future business and investment planning. My speech today will be about the Riksbank initiatives just referred to and the motives behind them. First, however, I plan to take you on a short tour of the history of payments. This is because I believe there are lessons to be learned here. Lessons that over time have formed the way that we at the Riksbank think about payments and the financial infrastructure in general. As such, they have played into also our recent decisions, of course. Looking at the past, the key observations that I make are the following:         Firstly, for a well-functioning monetary system the trust of money is key. A credible issuer can ensure this. Moreover, converging on one monetary unit in a given country, what economists refer to as the uniformity of money, increases simplicity and efficiency. Secondly, technological developments, often far away from payments, are an important driver of change. This goes hand in hand with innovation of ideas, humanity’s ability to react creatively to recognised needs. Sometimes this can even lead to the emergence of new types of business.
That’s the most pessimistic view. I don’t take that view, I think it’s extreme. Indeed, after our communication at the last Governing Council meeting in Malta, you have seen that inflation expectations, five-years-five-years, have recovered – which is not the case for oil prices. It’s not a “normal” recession followed by a “normal” recovery. We have a cyclical recovery, but recently we have additional downside risks to our scenario unfortunately. Is there a point at which the ECB’s assessment of risks to the economy starts to actually erode confidence? We say clearly that we have a cyclical recovery, which is moderate. The investment cycle is quite weak still. We know the recovery is fragile. There are a number of geopolitical issues that weigh on confidence in general. This fragility is a fact of the environment. I think what is different about the recovery is that this is the aftermath of what some have called a balancesheet recession, and that starts to be better understood now. It’s a stock adjustment, there are legacy problems which our societies have big difficulties in addressing. You have still in a number of countries non-performing loans weighing on the balance sheets of a number of financial institutions. We also see that insufficient changes in the way that European institutions function have been weighing on the recovery. What do we still need in terms of European reform? We have gone a big part of the way with the banking union, but there the last miles are very important.

Can you explain the ECB’s assessment of how inflation is developing? Looking at incoming data, I would say that data are more or less in line with our expectations. But this has to be seen in a context where we had repeatedly overestimated future inflation rates. In the last years, we have repeatedly lengthened the horizon over which we would get back close to 2 percent. Mechanically updated projections suggest that the risk is present that we may again have to extend this horizon. And even if it’s slightly, it’s a repetition of a past pattern. And then you go into the question of credibility of monetary policy. BIS central bankers’ speeches  1  If you observe for example, that the price people are ready to pay for protection against inflation is zero, or very low, that’s not necessarily a good signal, as it suggests that they are not convinced there’ll be inflation. And that could be related to scepticism about the ability of the central bank to influence inflation even five years ahead – which would be quite serious. You cannot just reject that. Markets might be signalling that there could be some second round effects related to the fall in oil prices. Inflation expectations would then be hit at some point. Finally they could also reflect a very pessimistic view on the future, and that’s the more secular stagnation scenario where the falls of oil prices would be more the reflection of deep structural problems in the global economy.
Rising demand and printing money When a country rearms and fights a war, inflation can also rise in the whole economy for the same reason, that is, demand rises in relation to supply. A sharp increase in public expenditure as a result of rearmament or war effort increases capacity utilisation in the economy and can therefore lead to higher inflation. In connection with the Second World War, the US economy approached full capacity utilisation, which contributed to a rise in inflation. Some economists argue that it was the US rearmament in connection with the war that finally put an end to the 1930s depression.3 The way in which a rearmament or war is financed is also of great importance to the way in which inflation develops. The financing can entail increasing taxes or decreasing expenditures other than military, by raising loans or by making the central bank print more money. If a war is financed by increasing taxes or decreasing other expenditure, public purchasing power will be reduced. This counteracts  1 Goldstein (2003). 2 Englund (1993). 3  See, for example, Vernon (1994). However, others, such as DeLong and Summers (1988), instead argue that the recovery was essentially completed even before the war. 2 [14]  the inflationary effect of increased public expenditure.

2 2 See Alternative Reference Rates Committee, Second Report, March 2018 3 3 See remarks by William C. Dudley, Restoring Confidence in Reference Rates, October 2, 2014 4 4 See remarks by William C. Dudley, The Importance of Incentives in Ensuring a Resilient and Robust Financial  System, March 26, 2018 5 5 See, for example: 6 William C. Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry, October  20, 2014 7 William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry:  Expanding the Dialogue, October 20, 2016 8 William C. Dudley, Remarks at the Culture Imperative – An Interbank Symposium, January 11, 2017 9 William C. Dudley, Reforming Culture for the Long Term, March 21, 2017 10 Michael Held, Reforming Culture and Conduct in the Financial Services Industry: How Can Lawyers Help?,  March 8, 2017 11 Kevin J. Stiroh, Misconduct Risk, Culture and Supervision, December 7, 2017 12 6 See remarks by William C. Dudley, Lessons from the Financial Crisis, November 6, 2017 13 7 See Alternative Reference Rates Committee, Second Report, March 2018 14 8 The U.K. Wheatley Review led to changes in many areas of LIBOR, including statutory regulation of LIBOR,  selection of a new administrator, new governance and oversight regimes, and a code of conduct for submitters.