samchain/econo-pairs-v1 huggingface dataset:
While unlikely, an extreme scenario would see the entrenchment of disinflationary developments initiate a downward drift in the Phillips curve and unmoor inflation expectations. Empirically disentangling these factors is extremely difficult, so we need to be mindful of such considerations when discussing the relationship between economic slack and inflation developments, especially in an environment of uncertainty over the anchoring of inflation expectations. Our primary task as a central bank is to ensure that the reconnection of the real and the nominal sides of the economy – what I referred to before as the Phillips curve regularity eventually reasserting itself – occurs at a steady state rate of inflation that is consistent with our medium-term aim. We have not yet accomplished our mission, and so we must remain patient and persistent. In 2/3  BIS central bankers' speeches  light of this, the October monetary policy decisions were taken to preserve the favourable financing conditions that are still needed for a sustained return of inflation rates towards levels that are below, but close to, 2%. In particular, the recalibration of our asset purchases reflects growing confidence in the gradual convergence of inflation rates towards our inflation aim. 1 See, for example, the European Commission’s “European Economic Forecast – Autumn 2017”. 2 For more details, see the box entitled “The targeted longer-term refinancing operations: an overview of the take-  up and their impact on bank intermediation”, Economic Bulletin, Issue 3, ECB, 2017.

The so-called “U6 measure” captures unemployment, underemployment (meaning workers who would like to work more hours) and marginal attachment, namely those workers that are not competing very actively in the labour market, for example because they are not available to start a new job at short notice. This measure currently covers just below 18% of the labour force and is thus considerably higher than the unemployment rate.4 We are experiencing a solid and broad-based economic expansion that is contributing to a narrowing of the output and unemployment gaps. But there still appears to be a disconnect between growth and inflation. As slack in the economy continues to be absorbed, reflationary forces will gradually build up and the traditional Phillips curve relationship between inflation and the business cycle should eventually reassert itself. That being said, current estimates of the slope of the Phillips curve still appear to be flatter than in previous times, which could be interpreted as an indication that the relationship between economic slack and inflation has weakened. A mismeasurement of slack (because of structural changes in the labour market) or an unstable relationship between slack and inflation over time could be among the reasons. At the same time, this effect could also result from discrete parallel shifts in the Phillips curve. Such parallel shifts can arise due to temporary changes in wage and inflation mark-ups, or – more concerning from a central bank’s perspective – the incipient dislodging of inflation expectations.
Norman T L Chan: Domestic and international dimensions of unconventional monetary policy Opening remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Conference on “Domestic and International Dimensions of Unconventional Monetary Policy”, organised by the Hong Kong Monetary Authority and the Federal Reserve Bank of New York, New York City, 20 March 2014. *  *  *  Mr McAndrews, Professor Sims, Professor Woodford, ladies and gentlemen, 1. A very warm welcome to all of you for attending today’s Conference jointly organised by the Federal Reserve Bank of New York and the Hong Kong Monetary Authority. This Joint Conference is very timely, as it is neither too early nor too late to examine the effects of the Unconventional Monetary Policy (UMP) of the Fed, including its spill-over effects on the emerging market economies (EMEs). As we all know, the Fed has already started tapering and, if everything goes according to plan, would end the asset purchase programme by the end of this year. The Fed has made it very clear in its external communications that tapering is not tightening and that there would likely to be a gap between the end of QE and the actual tightening of policy interest rates. However, the market considers that we are now in the phase of “exit” from the UMP, which also marks the beginning of the normalisation of US interest rates.

But how do we explain the episode of the sell-off this January when the market already knew in December that tapering would proceed? 3. Conceptually, it is not very difficult to understand the spillover effects of the UMP on EMEs in the five years after 2009. There was the first phase of spill-over, which entails a period of heavy capital inflows, through the banking and bond market channels, to the EMEs. This was a “happy” phase of the spill-over of UMP because the EMEs basically enjoyed apparently pleasant outcomes in investment, consumption, job creation and economic growth. At the same time, EME currencies appreciated and their foreign reserves increased. However, this period also saw the build up of vulnerabilities in the EMEs. The inflow of capital, including the carry trade in search of yields, created easy monetary conditions, which encouraged rapid credit expansion amongst the households and corporates. While domestic consumption and investment became buoyant, most EMEs experienced a significant deterioration of their current account positions. Needless to say, inflationary pressure and overheating in the asset markets also built up in most EMEs. This was why some EMEs, Hong Kong included, have introduced macroprudential measures to tackle the spill-over  BIS central bankers’ speeches  1  effects of the UMP of advanced economies. While it is too early to tell whether these macroprudential measures were effective, the EMEs seem to be entering the second phase, which I would call the “unhappy” period, of the spill-over.
Moreover, any such subordination would imply that the objective of the Internal Market is superior to the objective of Economic and Monetary Union. This is not the case; these are equal and complementary objectives of the European Union. Moreover, as the ECJ made clear in the Pringle case, “[…] each institution of the Union is to act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them.”5 And third, there is a limitation: Article 22 cannot confer general regulatory competences on the ECB – it can only adjust the ECB’s monetary policy toolkit by clarifying that the competence for clearing and payments covers derivatives. The Treaty drafters made the ECB’s objectives and tasks very clear. As the European Court of Justice said, a measure falls under the responsibility of the ECB when it is intended to pursue an objective such as the consistency of monetary policy or the proper transmission of monetary policy. This objective, in turn, contributes to the primary monetary policy objective of maintaining price stability6. The reason why monetary policy needs to cover CCPs’ liquidity is that derivatives clearing has become a cornerstone of the financial system. We must not forget that ECB measures must also comply with the principle of proportionality. This means that any ECB actions in the field of clearing will have to be appropriate for attaining monetary policy objectives and cannot go beyond what is necessary to achieve those objectives.

The Statute is found in a Protocol to the EU Treaties. Such protocols form an integral part of the Treaties. This means that, in principle, the Statute can only be amended as part of a revision of the Treaties. However, some provisions of the Statute – like Article 22 – can be amended by means of a “simplified amendment procedure”. The ECB can recommend a change; the Commission can give its opinion; and the Council and European Parliament can then adopt a decision to amend the Statute by simple majority. Given that the simplified amendment procedure is an exception, we have to be very careful what we change in Article 22 and how we go about changing it. Any change must comply with the other provisions and principles of the Treaties, which enjoy a higher constitutional rank. For example, any change to Article 22 must respect the principle of central bank independence and the exclusive competence of the ECB to conduct monetary policy. Amending Article 22 of the Statute – substance But what does this mean for the substance of Article 22, which is part of Chapter IV of the Statute, entitled “Monetary functions and operations of the ESCB”? The Statute grants the ECB flexibility and autonomy over the instruments available for conducting monetary policy. The Treaty drafters provided for various instruments4, including the possibility to conduct open market and credit operations, and to make regulations to ensure efficient and sound payment and clearing systems. This means that the ECB can react effectively to unforeseen circumstances.
Therefore, monetary policy in catching-up countries – unlike that in advanced economies – must also foresee and take into account price convergence patterns in the long run and this is a challenge that still lies ahead of us. The years that passed since the adoption of inflation targeting in Romania were quite out of the ordinary. Until 2008, we had witnessed an economic boom and widening macroeconomic imbalances amid large capital inflows, only to move towards the subsequent bust in 2009 following the outbreak of the global crisis, with the plethora of problems related to correcting domestic and external imbalances. Over the last years, our economy has come a long way, and is now better prepared to deal with external shocks than it was at the beginning of the crisis. It seems that the “light” version of inflation targeting has been working fairly well for a catching-up economy as Romania, providing a combination of rules and flexibility to overcome such trying times. Of course, a coherent macroeconomic policy mix is needed to maintain the economy on an upward course without putting at risk the hard-regained balances. In general, irrespective of how well-designed the monetary policy may be, in the absence of adequate complementary policies, it is likely to achieve sub-optimal outcomes. I would like to end by trying to answer, based on my experience as a central banker, two simple questions related to inflation and real convergence that concern not only Romania, but also other catching-up economies.

With regard to inflation, one may ask “how much is too much?”. I  believe that the answer does not lie in pinning down certain numbers, but in the commitment to maintain a relatively low and stable inflation in the medium and long run. Experience has taught me that inflation is an insidious disease that should not be treated carelessly. With respect to real convergence, a question raised by many is “how fast is  fast enough?”. Again, I would not look for a certain figure; I would tackle this issue by approaching real convergence not as a race where the fastest track is also the right one, but rather as a complex process giving the steady runner (a marathoner rather than a sprinter) the opportunity to reap most of the potential benefits, while avoiding excessive risks. Much like the fable about the turtle and the rabbit, which we all know how it ends... Beyond targets and levels, and irrespective of the convergence gap an economy faces or the monetary policy regime a central bank opts for, what matters for both real convergence and price stability (as part of nominal convergence) is the consistency and the sustainability of the effort. In other words, being and staying on the right track. Thank you. 3/3  BIS central bankers' speeches
Essentially, the Principles seek to control money laundering by cutting across the multiplicity of jurisdictional issues and addressing the serious reputation damage they were suffering in the media because of money laundering. Ladies and Gentlemen, allow me now to discuss our local initiatives/responses to money laundering. Admittedly, there has been little activity in the areas of prevention of money laundering in Zambia, until quite recently. This exposed the country to the activities of money launderers because they always seek to operate in countries where there are lax controls. However, the major initiatives in the fight against money laundering, locally, have included: •  Enactment of the Prohibition and Prevention of Money Laundering Act. The Government of Zambia responded to the increase in drug trafficking and money laundering by passing the Prohibition and Prevention of Money Laundering Act in 2001. The Act provides for the disclosure of information by supervisory authorities and of regulated institutions if suspected of money laundering activities. The Act also provides for the forfeiture of property belonging to persons connected to money laundering offences as well as for the prosecution of persons connected to or charged with money laundering offences. The Money Laundering Act places certain obligations on the Bank of Zambia as the supervisory authority. One of these is the issuance of regulations to commercial banks as and when necessary in order to prevent money laundering. •  Regulatory responses.

Prices for Norwegian exports, such as oil, gas, metals, minerals and fish, rose markedly, while prices for imported goods fell. In the seven years leading up to the financial crisis, the volume of mainland GDP expanded at an average annual rate of 3.4 per cent. Exactly ten years ago today, Norges Bank was charged with the task of setting the interest rate with a view to keeping inflation low and stable. At the same time, new fiscal policy guidelines, also known as the fiscal rule, were implemented, charting a course for petroleum revenue spending. Norway’s sovereign wealth fund, which is now called the Government Pension Fund Global, was designed to prevent fluctuations in oil prices from feeding through to the mainland economy. 2  BIS central bankers’ speeches  A decade of inflation targeting The inflation target for monetary policy provides a sound anchor for inflation expectations. Over the past decade, CPI inflation has varied to some extent. Underlying inflation has naturally been more stable, but has been both higher and lower than the target. If we look at the ten-year period as a whole, inflation has been 2 per cent, that is to say close to the target. BIS central bankers’ speeches  3  Still, over the past ten years, the conduct of monetary policy has been tested. During this period, we have gained insight into the functioning of the Norwegian economy under an inflation-targeting regime. Let me touch upon some of these insights.
BIS central bankers’ speeches  3  A more expansionary monetary policy gives better target fulfilment My view of monetary policy implies that at each monetary policy meeting one should choose the repo-rate path that with the corresponding forecasts for inflation and unemployment best stabilises inflation around the target and unemployment around a long-run sustainable rate. It should not be the case that a lower or higher repo-rate path leads to better target fulfilment for both inflation and unemployment. In other words, it should not be the case that inflation and the inflation forecast are below the target while unemployment and the unemployment forecast are above a long-run sustainable rate. Based on Norwegian central bank deputy governor Qvigstad’s (2005) criteria for a good repo-rate path, this can be worded as: For monetary policy to be well-balanced, the inflation gap (the gap between inflation and the target) and the unemployment gap (the gap between the unemployment rate and the longrun sustainable unemployment rate) should have the same sign. My view is also that the target fulfilment for inflation and unemployment during the entire forecast period is what is important, not just the target fulfilment at the end of the forecast period. For an unemployed person there is a major difference between getting a job in one or two years’ time and getting one in three years’ time.

This is attributable to hikes in unprocessed food prices driven by supply-side shocks. 12  BIS Review 68/2010  CPI by Subcategories  Contribution to CPI Inflation in 2009  (Annual Percentage Change)  (Percentage Point)  25  Go ods exc l. Food and Energy 29%  2006 2007  20  2008  Foo d 40%  2009 15  Energy 11%  10  Serv ices 20%  5  0 Food  Energy  Goo ds e xcl. Fo od a nd En ergy  Services  Source: TURKSTAT, CBRT. 35. Source: TURKSTAT, CBRT. Despite having followed a volatile course during periods when temporary tax adjustments were effective, core inflation, which is useful for predicting underlying inflation, had a remarkable downtrend consistent with medium-term targets throughout 2009. Core Inflation Indicators and CPI Inflation (Annual Percentage Change)  12 10 8 6 4 2 0  CPI  SCA-H  SCA -I  Source: TURKSTAT, CBRT. 36. Recent data releases indicate that the pace of recovery in economic activity continues. Domestic demand rises gradually as the lagged effects of monetary policy implementations become evident, whereas, uncertainties regarding external demand persist. Accordingly, we expect that after following a volatile course significantly above the target for some period, inflation will be back on a downtrend by the phasing out of temporary effects as of the last quarter of the year and return to target-consistent levels as of early 2011.
Since 2004, we have lifted the Libor target range in ten steps to bring the interest rate to a level that is in line with price stability in the medium term. Thanks to this preventive approach, the inflation outlook has not deteriorated despite the inflationary bouts of recent months. Moreover, the performance of our monetary aggregates strengthens our belief that price stability can be maintained. Contrary to what we see in neighbouring countries, growth in Switzerland’s monetary aggregates has been compatible with stable medium and long-term inflation for a number of years already. Successive interest rate hikes have created the conditions for transfers from sight and savings deposits to term deposits, which generally earn better returns. Thus, in 2007, M1 and M2 continued declining, while M3 recorded only modest growth. Consequently, the money overhang which existed since 2003 has now dissipated – a development which bodes well for future price stability. Finally, the foreign exchange market has largely corrected the previous slide in the Swiss franc against the euro, which had made imports more expensive. The Swiss franc’s rebound creates a more favourable environment for the preservation of price stability in the medium term. This change in monetary conditions enabled us to leave interest rates unchanged at our monetary policy assessment in March. Mixed outlook for 2008 Even though Switzerland’s economic performance is still excellent, 2008 is fraught with considerable uncertainties. The situation on the financial markets has not yet stabilised, and the global economy is slowing.

Our economy, with its important financial sector and strong presence on the international markets, will not remain unscathed. In addition, the increase in commodity prices, in particular the price of oil, is triggering an inflationary effect. These different factors pose a predicament in terms of monetary policy, and the resultant uncertainty this causes is not exactly beneficial for Swiss companies. I have every confidence, however, that Switzerland will navigate these troubled waters without any major problems. On the one hand, our economy is very competitive. Thanks to the reforms implemented in recent years, Switzerland is well placed to adjust to the needs of the global economy and cope with pressure on the foreign exchange markets. On the other hand, our careful policy in favour of a gradual normalisation of interest rates, which we have been pursuing since 2004, has resulted in a steady tightening of monetary conditions and should ensure price stability in the medium term. On this positive note, I would like to close my remarks. Thank you for listening and, above all, thank you for supporting the National Bank in its efforts to ensure monetary stability in Switzerland. BIS Review 50/2008  5
Nevertheless, phases of low or negative interest rates also present monetary policy challenges and have economic side-effects, which must not be ignored and which I would like to address in the third part of my speech. I will stress that expansionary monetary policy is no panacea for growth in advanced economies. Only structural reforms and adjustments in the real economy can create the conditions for a sustained recovery – and thus for a normalisation of monetary policy. Expansionary monetary policy can make these necessary adjustments easier, but it cannot replace them and must not delay them. Before talking about the mechanism of negative interest rates in Switzerland, I would first like to examine the international environment and explain why global interest rates today are so low. Page 2/16  Low rates as a global phenomenon The current very low interest rate level is the result of a global secular trend. Interest rates have not just been declining since the outbreak of the financial crisis, they have been falling steadily in recent decades. Chart 1 shows that nominal yields on government bonds with a remaining maturity of ten years in Switzerland, Germany and the US are more than 6 percentage points lower today than they were back in 1990. Nominal interest rates are currently at a record low worldwide. But it is important to distinguish between nominal interest rates and real interest rates, which are ultimately relevant for most economic decisions.

When foreign market participants assess the situation and risks for Sweden and Swedish financial institutions, they also take into account to a large degree what is happening in the other Nordic countries and in the Baltic countries. The global financial crisis has affected financial stability in Sweden, although financial institutions here have coped better than those in many other countries. At the end of 2008 and the beginning of 2009 there was considerable international uncertainty and the market was particularly sensitive to consequences for Swedish banks resulting from the crisis in the Baltic. There was thus good reason for the Riksbank to take measures to stabilise the situation among the major Swedish banks in accordance with its task "to promote a safe and efficient payment system”. As the problems of the Swedish banks concerned mainly lay in the Baltic region, there was even greater justification for aiming the measures at strengthening these countries and thereby the banks there. The costs of these measures would probably be much lower if the problem could be dealt with at source rather than waiting until it had spread to the parent banks in Sweden, for instance through a dead stop in the liquidity supply from international markets. When the Riksbank made an assessment of the resources required to manage a widespread Swedish bank crisis, we took into account the fact that the Swedish banks’ balance sheets nowadays amount in total to 3.7 times Sweden’s GDP (which can be compared to 1.2 times GDP during the bank crisis in the 1990s).