samchain/econo-pairs-v1 huggingface dataset:
Thus, when the Monetary Policy Council makes interest-rate decisions, it bears in mind first the objective of preserving the purchasing power of the currency, for and on behalf of all French people, and second, its corollary, namely the creation of monetary, financial and competitive conditions that will allow our economy to achieve its full potential for sound and sustained growth, for job creation and therefore for combating unemployment. Central Banks cannot “command” growth. Growth is the fruit of the labour of men and women, of the efficiency of employees, workers and engineers, of the imagination and skill of business leaders, and also, more broadly, of the influence of European and international business conditions. It is stimulated, in the medium and long term, by structural reforms that liberate initiative, strengthen the dynamism of the economy, combat unemployment effectively and encourage the creation of the greatest possible number of jobs for a given level of wealth and growth. However, it is up to Central Banks to create the best possible monetary and financial conditions, through the credibility and stability of the currency. These conditions now exist in our country and the Monetary Policy Council is convinced that the time has come for firms and households to invest. In many sectors and firms, the financing exists. The self-financing rate of the entire French productive sector is above 100% overall. Interest rates as a whole are at historic lows. The French economy has substantial BIS Review 2/1997  -6-  potential for growth in the medium term.

The legacy of those losses has likely limited the banking sector’s ability to extend new loans during this expansion, as banks acted in a highly precautionary way to accrue capital that had been depleted as well as to add to their previous capital levels. The need for banks to repair their balance sheets following the financial crisis contributed to the far slower growth of outstanding bank loans during this expansion when compared to previous long expansions. Real outstanding loans to businesses, which are dominated by bank loans, declined more in this recovery than in previous recoveries (Figure 4). On the household side, real outstanding residential mortgages, which are largely originated by banks, have declined through most of this expansion while they grew steadily in previous expansions (Figure 5). Consumer credit has risen at a modest rate in this recovery – comparable to that of the last cycle (Figure 6). This category includes auto loans, credit cards and other consumer debts that are mainly originated by banks. But it also includes student loans where the federal government is the dominant lender. Student loans have risen robustly during this expansion, and have driven much of the rise of overall consumer credit. We will have much more to say about them later in today’s briefing. The U.S. financial system relies more heavily on capital markets than other advanced economies. Bonds and other negotiable debt instruments are an important source of funding to credit-worthy corporations.
Research tells us with a high degree of confidence that: •  In the Northern Hemisphere the last 30 years have been the warmest since AngloSaxon times; indeed, eight of the ten warmest years on record in the UK have occurred since 2002; 3  •  Atmospheric concentrations of greenhouse gases are at levels not seen in 800,000 years; and  •  The rate of sea level rise is quicker now than at any time over the last 2 millennia. 4  Evidence is mounting of man’s role in climate change. Human drivers are judged extremely likely to have been the dominant cause of global warming since the mid-20th century. 5 While natural fluctuations may mask it temporarily, the underlying human-induced warming trend of two-tenths of a degree per decade has continued unabated since the 1970s. 6 While there is always room for scientific disagreement about climate change (as there is with any scientific issue) I have found that insurers are amongst the most determined advocates for tackling it sooner rather than later. And little wonder. While others have been debating the theory, you have been dealing with the reality: •  Since the 1980s the number of registered weather-related loss events has tripled; and  •  Inflation-adjusted insurance losses from these events have increased from an annual average of around $ in the 1980s to around $ over the past decade. 7  The challenges currently posed by climate change pale in significance compared with what might come.

In any field, financial, scientific or other, the most effective disclosures are: •  Consistent – in scope and objective across the relevant industries and sectors;  •  Comparable – to allow investors to assess peers and aggregate risks;  •  Reliable – to ensure users can trust data;  •  Clear – presented in a way that makes complex information understandable; and  •  Efficient – minimising costs and burdens while maximising benefits. Meeting these standards requires coordination, something the G20 and FSB are uniquely placed to provide. The logical starting point is a co-ordinated assessment of what constitutes effective disclosure, by those who understand what is valuable and feasible. One idea is to establish an industry-led group, a Climate Disclosure Task Force, to design and deliver a voluntary standard for disclosure by those companies that produce or emit carbon. Companies would disclose not only what they are emitting today, but how they plan their transition to the net-zero world of the future. The G20 – whose member states account for around 85% of global emissions 28 – has a unique ability to make this possible. This kind of proposal takes its lead from the FSB’s successful catalysing of improved disclosure by the world’s largest banks following the financial crisis, via the Enhanced Disclosure Task Force. The EDTF’s recommendations, published in October 2012, were the product of collaboration between banks, analysts and investors.
Although there is a, by now extensive, literature on financial frictions, including attempts to incorporate them in New Keynesian models, it turns out that such extensions make little difference to the propagation of shocks, to optimal policy, or to the quantitative conclusion that overwhelmingly the most important objective remains inflation stabilisation. 12 There is no doubt that financial frictions such as asymmetric information, credit constraints, and costly monitoring of borrowers, to name but a few, are an important part of the story of how crises happen and why they impact on output. But those models do not provide a convincing account of the gradual build-up of debt, leverage and fragility that characterises the run-up to financial crises. 13  8  This specification of the objective function can be derived as an approximation to the maximisation of the welfare, defined over consumption and leisure, of a representative consumer with an infinite horizon (see Rotemberg and Woodford, 1997). 9  The frontier is named after the US economist John Taylor. 10  To implement such a policy reaction function requires an empirical judgement about the factors that drive the volatility of both inflation and output. In principle, these should include those factors in the banking and financial system, including movements in asset prices, that generate fluctuations in demand and output and affect the way in which shocks are transmitted through the economy. In practice, however, rather little attention was paid to the role of the banking system in determining inflation and output. 11  Brazier et al.

Their conversations during the 1930s, at the height of the Great Depression, are eerily reminiscent of the enormous challenges we face today, as you can see from the following exchange in 1930: KEYNES: Is not the mere existence of general unemployment for any length of time an absurdity, a confession of failure, and a hopeless and inexcusable breakdown of the economic machine? STAMP: Your language is rather violent. You would not expect to put an earthquake tidy in a few minutes, would you? I object to the view that it is a confession of failure if you cannot put a complicated machine right all at once. KEYNES: In my opinion the return to the gold standard in the way we did it set our currency system an almost impossible task ... If prices outside this country had been going up since 1925 that would have done something to balance the effect on this country of the return to the gold standard. STAMP: Hush, Maynard; I cannot bear it. Remember, I am a Director of the Bank of England. In some respects our experience today is no different: putting right our economic machine is proving a slow and difficult task. But in the 1920s the Government made the task substantially harder by reinstating the gold standard at a rate that left sterling overvalued. Today, monetary policy is part of the solution, not part of the problem. That is thanks, in large part, to the monetary framework we have had in place since 1992.
•  Financing restrictions – in the form of LTVs and caps on loan tenures – were imposed on housing loans and car loans to moderate demand and reduce price pressures. •  Over 2013–2014, inflation came down steadily as housing and car prices declined. So, monetary policy and macroprudential policy can potentially be complementary to help achieve both macroeconomic stability and financial stability. They can do this sometimes by acting in the same direction; sometimes in opposite directions. •  Charles Bean 7 gives a useful pedagogical exposition of how a restoration of price and financial stability could be achieved by a combination of instrument tightening and loosening, similar to employing an optimal mix of fiscal and monetary policies to influence the composition of aggregate demand. 7  Bean, C. (2015), Comment on Applying an Inflation-targeting Lens to Macroprudential Policy Institutions, International Journal of Central Banking, Vol 11, Supplement 1  BIS central bankers’ speeches  7  •  But we need to deepen our understanding of when to use monetary policy and when to use macroprudential policy and when to combine the two, if at all. Does tighter regulation weaken the efficacy of monetary policy? There is one other aspect of the interaction between monetary and regulatory policy that I would like to touch on. •  Just as monetary policy that is set to achieve macroeconomic stability can sometimes be inappropriate for financial stability, could there be a situation where regulatory policy weakens the transmission mechanism of monetary policy?

But whatever the explanation the resulting strength of sterling against the euro has contributed to the pressure on the internationally - exposed sectors of our economy, and a stronger euro would, from my perspective, help us towards better balanced growth in this country. It would also incidentally facilitate debate about sterling's possible entry into the single currency, in the sense that the undoubted attraction of nominal exchange rate certainty vis à vis our European trading partners, which is a major potential advantage of our adopting the euro, must depend to some degree on the likely exchange rate at which we might join. These then are the monetary challenges that we have faced over the recent period. The question now, of course, is where do we go from here? There has recently been encouraging evidence - in the US data particularly but also for example in many of the more forward-looking indicators of European economic activity - that we are now in the early stages of global recovery. We cannot be sure that the early momentum will be maintained; nor do we know just how strong the expansion will prove to be or how long it will last; but the signs are promising, and indeed far more positive than any of us would have dared to hope just six months or so ago in the aftermath of the terrorist attacks on New York and Washington.
15  Figure 7 Parities with the US dollar  Real exchange rate (3)  (change accumulated since 29 May 2017, percentage points  2  (índice 1986=100)  2  120  0  110  110  -2  -2 100  100  -4  -4  90  -6  80  90 Spot (09/06) 80  -8  70  70  Latin America (1)  0  120  2002-2016 avg 1997-2016 avg  TCR  Chile  Commodities currencies (2)  -6  -8 05-17 06-17 07-17 07-17 08-17  89 93 97 01 05 09 13 17  (1) Includes Brazil, Colombia, Mexico and Peru. (2) Includes Australia, Canada, New Zealand and South Africa. (3) Preliminary estimates for August 2017. Sources: Central Bank of Chile and Bloomberg. Figure 8 China: Indicators by sector (*) (annual change, percent)  25  30 Railroad freight traffic (right axis)  Retail sales  20  Electric power production  15  20 10  10  0  5  Manufacturing output  0  -10 -20  07  08  09  10  11  12  13  14  15  16  17  (*) Quarterly series. Source: Bloomberg. 16  Table 1 International scenario 2016  2017 (f) Jun.17 Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates United States China Eurozone Latin America (excl.

In general terms, it can be said that the need for action should be based on the outlook for domestic demand, the stringency of fiscal policy and international trends. In addition, inflation expectations play a key role as an overall indicator of inflationary pressures. In a situation where inflation risk premiums are low, an independent central bank with a price stability target can also contribute to stabilising the economy around its potential growth. How far does this responsibility extend? According to the way the Riksbank has explained the target, annual inflation measured by the CPI is normally to be restricted to 2% with a tolerance interval of ±1 percentage point. In the event of a deviation from this target, inflation is normally to be brought back on target within 1-2 years. In the event of a major deviation, caused for example by a major external disturbance, there may, however, be reason to extend the horizon of the target so as to limit fluctuations in production and employment. In other words, in these circumstances it may be too difficult or too costly for monetary policy to quickly bring inflation back on target. The “new economy” Let me now take up another question that is the subject of much discussion both in the media and in academic circles: the existence of a “new economy”. When people talk about this, their eyes are turned primarily towards the American economy. The concept seems to be capable of covering many phenomena.
In this regard, greater clarity about the large public investment projects will be crucial in putting both public and private investment back on track. The continued high capacity utilization and investment promotion applications to the Board of Investment have pointed to stronger appetite for investment once the investment climate becomes more favourable. During this period of uncertainties, monetary policy has become more accommodative in line with declining inflation and low risks of picking up going forward. Latest data for August showed headline inflation at 1.1 percent and core inflation at 0.7 percent. Set in this light, the Monetary Policy Committee cut its policy interest rate in total by 175 basis points since the beginning of this year. The aim is to stimulate the domestic demand to offset the expected slower export growth in light of the slower US economy and baht appreciation, though exports still remains an important driver of growth for next year. Latest economic forecast projects the economic growth to lie between 4.5-6.0 per cent in 2008, while core inflation is expected to stay comfortably around 1.0-2.0 percent. Given the appreciation trend of the Thai baht thus far, we cannot deny that certain industries, especially those who rely more on the high local content materials, have been affected far more than those who rely more on the import-content materials.

Specifically, the  4  BIS Review 104/2007  latter Act will stipulate prompt corrective action and grant the Bank of Thailand power to conduct supervision on a consolidated basis. The current Financial Sector Master Plan (FSMP) will move into its second phase, with an emphasis on increased competition and consideration on potential entry of new players to further enhance financial efficiency and resiliency. Our accession to the Basel II accord will upgrade the risk management of banks to the best standard and will further enhance financial sector stability. Ladies and Gentlemen, To end my talk today, I would like to emphasize that policymakers must avoid misplacing the focus of policies just on short-term issues. They must instead always weigh very carefully between short-term and long-term objectives toward achieving strengthened resiliency of the overall economy. Only with such resiliency, will a small open economy like Thailand be able to sail through the waves of global financial turbulence in the years ahead. BIS Review 104/2007  5
Patterns in these systems often self-replicate at different resolutions; they are “fractal”. 7 One interesting question is whether economic systems also exhibit self-replicating patterns. If so, this has implications for how we understand and model them. We consider these questions using a sequence of maps. Many of these maps are not new. For example, Philip McCann from the University’s Productivity Insights Network (PIN) has published an excellent book setting out a range of fascinating regional facts and maps. So too have others.8 These maps provide useful context when testing the Tip O’Neill hypothesis and when modelling and managing the economy. To provide the clearest visual guide, these maps are scaled by economic rather than geographic size – so-called cartograms.9 Each region is initially scaled to have the same geographic area and then rescaled in line with economic differences. This means some areas shrink (such as Scotland) while others expand (such as London) even without differences between them. This helps when visualising local differences. (a)  Differences between regions  To fix ideas, Charts 1a and 1b plot a map and an accompanying cartogram of population by region in the UK and, by way of comparison, Germany. It uses a resolution one-level below the national – administrative “regions” in England and each of Scotland, Wales and Northern Ireland. Comparing the map and cartogram suggests the UK has a significant demographic skew towards London and the South-East.

The current situation is very different, and while the pace of the recovery is yet to be seen, forecasts for the three-year period 20092011 point at the world economy growing by an average of 2.1% per year, 0.8% for the U.S. 11 In the 1930s, U.S. unemployment soared to 25%, much higher than the 10% projected this time. Also, the world faced a severe deflation in the early 1930s, in some cases sinking  8  Although the evidence shows that financial development is good for economic growth, excessive credit expansion can exacerbate a crisis, as happened during the debt crisis in Latin America (De Gregorio and Guidotti, 1995). 9  One example is the new households’ financial survey of the Central Bank of Chile, which seeks to strengthen the analysis of a sector that is becoming ever more important in our financial system. 10  Evidence provided by Eichengreen and O’Rourke (2009) shows that the first few months of the current crisis are pretty similar to the Great Depression, although in recent months they seem to diverge, because the current episode has begun to show signs of recovery while in the Great Depression the fall continued. 11  For the 1930s, the data come from Maddison (2009), while current growth projections come from Consensus Forecast and investment banks. BIS Review 112/2009  5  below -10%. We do not see that today, and while inflation has fallen dramatically around the world, it remains far from the levels seen during the Great Depression.
The US dollar series refers to US dollar-denominated bonds issued in the US domestic market, while the sterling and euro series refer to bonds issued in domestic or eurobond markets in the respective currencies. Chart 14: Stylised monetary policy responses  13  All speeches are available online at www.bankofengland.co.uk/speeches  13  Chart 15: Monetary policy trade-off lessening 4.0  Preferred trade-off if λ=1  Inflation (%)  3.5 November 2016  Preferred trade-off if λ=0.1  3.0 May 2017 February 2017  2.5 Output gap (%) 2.0  -2.0  -1.5  August 2016, no stimulus  -1.0  -0.5  0.0  0.5  1.0  1.5 August 2016, with stimulus  1.0  Source: Bank of England. Notes: the chart shows Inflation Report projections for inflation and the output gap at the year 2 horizon. A value of 0.1 gives an approximate lower bound on estimates of lambda over the post inflation targeting period. A value of unity would correspond to a “balanced approach” which weighs inflation stabilisation and output gap stabilisation equally. For more information, see ‘Lambda’, speech by Mark Carney at the London School of Economics, 16 January 2017, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech954.pdf. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14

For instance, a recent ECB study has shown that, following the introduction of a quantitative definition of price stability, inflation persistence has considerably diminished in the euro area, in Switzerland and in five inflation-targeting countries. 2 While a large component of the switch in expectations formation is due to the genuine regime change, the exceptional speed of the adjustment would not have been possible without extensive communication about the onset of a new regime. Communication in difficult times Central bank communication – if supported by an established strategy – might well be a quiet and uneventful activity. In difficult times, however, when the economic outlook darkens exceptionally and confidence falters, communication becomes even more important to explain how the central bank intends to gear its policy. We have, on the one hand, the need to take and communicate swift action in implementing the appropriate monetary policy and in refinancing commercial banks. On the other hand, we need to communicate clearly the adherence of the central bank to the long-term objectives of policy and the way it intends to steer the policy course back to a normal path once the abnormal circumstances and risks have subsided. Communication in difficult times is inherently challenging for all central banks. However, it is facilitated by two fundamental components of the ECB’s monetary policy strategy. The first is the quantification of a price stability objective. This grants a very significant level of predictability.