samchain/econo-pairs-v1 huggingface dataset:
The most uncertain element of the recoverable amounts is the estimation of the outcome of the sale of Catalunya Banc, currently under way, and of the divestment of BFA/Bankia and BMN. However, it is likely that these disposals will entail an appreciable lessening of the cost that the restructuring of the financial system has involved for taxpayers. In any event, the figures are sizeable. However, in terms of GDP they are not higher than those recorded in other European countries during the financial crisis despite the fact that, in most of them, banks have not had to face a real shock with an impact on the scale of that of the collapse of the real estate sector in Spain. As discussed earlier, the banking industry – via the Deposit Guarantee Fund – has also contributed notably to stabilising the financial sector. This contribution has been possible thanks to the maintenance at all times, despite the severity of the economic and financial crisis, of appreciable financial soundness at most institutions, representing more than 80% of the sector as a whole. The DGF’s support was in the specific form of direct injections into CAM, UNNIM and CCM (for a value of € million), the APSs granted to these institutions (whose estimated cost as at 31.12.2013 was € million at present value) and the potential losses caused by the acquisition of shares in NCG and CX, provisionally evaluated at € million. 4.

Progressive recovery in the Spanish economy  Allow me to begin with a brief overview of the current situation of the Spanish economy, which is far different from that two years ago, when the extreme tensions on the capital markets derived from the institutional crisis of the euro area, the vulnerability of public finances and of part of the banking system, and the recession under way drove the Spanish government to apply for financial assistance. At present, the economy, after beginning to show moderately positive growth rates in the second half of 2013, is set on a path of recovery. The information available indicates that year-on-year growth rates might draw close to 2% late next year. Positive figures can likewise be seen in the labour market. Following a process of job destruction that ran for over five years, the incipient recovery in the market observed in the closing months of 2013 has gained in momentum in the first half of 2014, providing for a slight reduction in the unemployment rate which, however, remains at unacceptably high levels. The firming of the improvement in the labour market is crucial for driving the expansion of domestic demand and, thereby, making the incipient path of recovery sustainable. Contributing factors here must also include the adjustments made by the economy, which have seen an appreciable moderation of the main imbalances in public finances, the external balance, private-sector debt and the real estate market.
These online tools would be a mechanism for speeding-up the process of technological diffusion to the long tail. One practical way of doing so is by pairing up companies, frontier and non-frontier, to enable the sharing of best practices. This is effectively a mentoring scheme for firms, the like of which is already common among individuals. What would be in it for frontier companies? A more productive supply chain is clearly in their interests. The public sector could also play a useful nudging role in its procurement practices. 62 63 64  Big Innovation Centre (2017a). HM Treasury and Department for Business (2017). Mayfield (2016). 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  A more ambitious idea still, which I have been considering with Philip Bond, is to develop a virtual environment which would enable companies to simulate changes to their business processes and practices. These platforms are already used by many frontier firms to assess the impact of new technologies and processes on their business. These tools can be created, and tailored to companies’ circumstances, at relatively low cost. This makes them a potentially cost-effective way of facilitating diffusion to the long tail. Policy measures such as these are valuable in boosting living standards and narrowing the dispersion of incomes across households. As a by-product, they also potentially offer benefits to monetary policymakers. Structural measures to boost investment will tend to raise the interest rate in the economy which equilibrates investment opportunities and savings plans.

Classical growth dynamics appear for some reason to have stopped operating, with the gap to the frontier widening the more so the greater the distance to it. It is possible to quantify this slowing in convergence using a similar approach to that used to measure output convergence in the cross-country growth literature. 39  Specifically, a country’s productivity growth can be  linked by a convergence parameter to its productivity gap to the frontier country. This parameter can be estimated econometrically and tracked over time. 40  Chart 12 shows a time-series of this convergence coefficient estimated using a rolling regression. In the 1980s, this coefficient averaged 0.8. That is to say, every 10 per cent productivity gap relative to the frontier country resulted, on average, in productivity growth being 0.8 percentage points higher than in the frontier country. By 2000, that convergence coefficient had roughly halved. By the end of the sample, the coefficient is statistically insignificant from zero. Convergence had not just slowed but stalled. One of the key determinants of international technology transfer has been found to be cross-border flows of goods and services, people and money and capital. 41  While they have waxed and waned historically, all of th  these have tended to rise rapidly since the middle of the 20 century. Other things equal, that would have been expected to increase the speed of diffusion of innovation across countries over that period. In practice, the opposite appears to have occurred.
MPRA Paper No 33464. 3  practice this ratio normally exceeded 100%. As capital controls were eased, interest rate policy was increasingly set with an eye on the spread vis-à-vis interest rates offered on the basket currencies (and, later, the euro). More profoundly, maintaining the exchange rate peg required discipline in domestic wage and price setting to safeguard Malta’s external competitiveness. Despite an element of wage indexation, the labour market was fairly flexible, with relatively low coverage of collective bargaining in the private sector and with wage negotiations being handled at the level of the individual firm. Broadly speaking, fiscal discipline was also maintained. The government debt to GDP ratio remained below 60% until the late 1990s, peaked at around 72% in 2004, and is now just at about the 60% threshold again. This discipline helped establish the credibility of the exchange rate peg, which became embedded in the decision-making process across the economy. For this reason, the Bank never adopted policy options that would have entailed greater exchange rate flexibility, even when this became possible, for instance in ERM II. Subsequently, this internal discipline also served in good stead after euro adoption, which, as we have seen before, entails the loss of the exchange rate and interest rates as a policy tool. Despite the several shocks that have hit the euro area since 2008, the Maltese economy has performed well.

At the same time, the monetary policy stance of the ECB, while fully oriented towards the price stability objective, does influence the exchange rate. From a theoretical viewpoint, one can argue that the member countries of the euro area have chosen to go beyond a fixed exchange rate by adopting a single currency. The adoption of the euro implies the irreversible abolition of national currencies and, hence, of national exchange rates themselves. This choice involves a trade-off. On one hand, a single currency, as we have seen, eliminates the volatility of exchange rates within the monetary union. The euro, as a freely-floating currency, helps protect the economies of its member countries from external shocks. The single currency also facilitates trade between them, deepening economic integration. However, the elimination of national currencies implies that market signals regarding domestic economic imbalances are lost, allowing such imbalances to build up. More importantly, the absence of national currencies also implies that a valuable tool for stabilising the economy in the short term in the face of asymmetric shocks is no longer available. The sovereign debt crisis in the euro area has brought home the implications, both positive and negative, of membership of a single currency area. It remains my firm opinion, however, that the gains outweigh the losses. It is also my firm opinion that greater efforts need to be made to reduce and eventually eliminate internal imbalances within the monetary union in order to protect its sustainability.
Jean-Claude Trichet: How can we increase growth potential in Europe? Speech by Jean-Claude Trichet, President of the European Central Bank, at the Suomi Areena 2007, Pori, Finland, 20 July 2007. *  *  *  Dear Governor Liikanen, I would first like to thank you very warmly for inviting me on the occasion of the “Suomi Areena 2007” event. It is a pleasure and a honour to be here today and to share with you my views on “How can we increase growth potential in Europe”. In light of the partly disappointing euro area economic performance in the past, it is a major policy issue. By contrast, the impressive performance of the Finnish economy, with output and productivity growth over the second half of the 1990s among the highest in the European countries, [Real GDP and hourly labour productivity grew on average by 3.8% and 2.7% respectively between 1996 and 2006], offers a good illustration of what could be done to increase growth potential in Europe. The transformation of the Finnish economy over the last decades represents one of the examples of the “knowledge based-economy” taking hold in Europe. Against this background, I will first review the past economic growth performance of the euro area in comparison to the US and focus on some of the underlying factors of potential output growth. Then I will elaborate on the reforms which I consider essential to increase the potential growth rate of Europe.

Cambridge, USA: MIT Press. Friedman, M., 1948. A Monetary and Fiscal Framework for Economic Stability. American Economic Review, 38(3): 245–264. Ilzetzki, Ethan, Enrique G. Mendoza and Carlos A. Végh, 2010. How Big (Small?) are Fiscal Multipliers? NBER Working Papers 16479. IMF, 2008. World Economic Outlook. Financial Stress, Downturns, and Recoveries, October 2012. Jordan, Thomas J., 2011. Auswirkungen der Staatsverschuldung auf die Unabhängigkeit der Geldpolitik. 21. Internationales Europa Forum Luzern. Luzern, 8 November 2011. Jordan, Thomas J., 2012(a). Kein Ende der Schuldenwirtschaft ohne Stabilitätskultur. NZZ Podium, Zurich, 28 February 2012. Jordan, Thomas J., 2012(b). Speech given to the General Meeting of Shareholders of the Swiss National Bank. Berne, 27 April 2012. Klomp, Jeroen and Jakob de Haan, 2010. Inflation and Central Bank Independence: A Meta-Regression Analysis. Journal of Economic Surveys 24: 593–621. Kydland, Finn E. and Edward C. Prescott, 1977. Rules Rather Than Discretion: The Inconsistency of Optimal Plans. Journal of Political Economy 85(3): 473–91. Poterba, James M., 1994. State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics. Journal of Political Economy 102(4): 799–821. SECO, 2012. Evaluation der Stabilisierungsmassnahmen 2008–2010. Die Volkswirtschaft 5-2012. Summers, Lawrence H., 2007. The State of the US Economy. Presentation at Brookings Institution Forum, 19 December 2007. BIS central bankers’ speeches  13
In terms of growth stability, we have been on the low end of the balance. We observe Thailand’s average growth to be near zero in the past three quarters, and currently we are still well below the long-term trend. The underperformance was contributed to by political uncertainty and drawdown from earlier accelerated spending encouraged by previous government policies. The long stretch of low growth calls for the central bank to step in with policy that shores up demand. The Bank of Thailand has implemented accommodative monetary policy since the beginning of the year, while price and financial stability were also carefully monitored to ensure they were not compromised. BIS central bankers’ speeches  1  The accommodative stance has shored up demand up until now, with businesses gradually upgrading and adding capacity during the downturn, and as we enter recovery, they have retained the ability to resume production at normal levels. Continuation of monetary policy accommodation will benefit further investment through the availability of funds, especially now that the recent political clarity helps restore confidence both domestically and internationally. Revival of confidence is vital to recovery and restoration of growth towards potential. Recent economic data is supportive, showing that consumption and tourism have started to pick up and stimulus measures from the government have risen. On the external front, the steady recovery of the world economy, especially the U.S, will bolster the export sector. All these positive prospects point to on-track economic recovery and movement towards fulfilling the growth stability objective.

The prospect of Brexit and our future relationship Let me say from the outset that Brexit is and remains bad news, not only for the United Kingdom, but also for Europe. But we respect the British choice, whatever it turns out to be. At this stage, both the British and Europeans are faced with great uncertainty surrounding the outcome. We are still hoping for a deal, but we have to be ready for a no-deal and all the risks it entails. Supervisors both at national and European levels have encouraged and monitored the implementation of contingency plans by the financial industry: on our side, we are ready. Let me add one word on the future relationship between the UK and the European Union. After Brexit, we will obviously no longer belong to the same European club, but we will hopefully remain close partners and friends. The UK will continue to participate in international forums – such as the G7, G20 FSB, BIS, etc. – where cooperation will be much needed to face our common challenges such as financial stability, digitalisation and the regulation of Bigtechs, as well as the challenge of green finance. In a context where the multilateral order is being put at risk, let me express the wish that the UK, together with the EU, may resolutely strive to renew multilateralism.
But one cannot rule out the possibility that it would have some effects on, for instance, consumption, and would thereby also contribute to strengthening demand, even if the effects were not substantial. The Riksbank and monetary policy The Riksbank’s task is to use all this information on what is happening in the Swedish economy and abroad to make a forecast of future inflation. The aim is normally to attain the inflation target within two years. The fact that we have this horizon is because monetary policy has an effect on economic developments after a time lag. We also want to have the opportunity to adjust the interest rate  BIS Review 54/2007  3  gradually to take into account developments in what economists call the real economy. This refers to basic economic concepts such as growth and employment. In the long run, monetary policy cannot affect either growth or employment. These are instead governed by factors such as population growth, technological developments and the way various markets function. But by setting the interest rate at the right level we can ensure that fluctuations due to variations in economic activity are slightly smaller. At the same time, we must not forget that the interest rate is a blunt instrument. It cannot be used to fine tune the economy. The development of the repo rate Last year we raised the repo rate by a total of 1.5 percentage points to 3.0 per cent.

If shareholders know that they have to absorb potential  2  Barry Eichengreen and Michael D. Bordo: “Crises now and then: What lessons from the last era of financial globalization?”, NBER working paper 8715, January 2002. 3  “Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience”, April 2008, and the recommendations and principles to strengthen financial systems that the FSB published on 2 April 2009. 2  BIS Review 115/2009  future losses rather than passing them on to taxpayers, they will likely become less willing to let management engage in excessively risky activities. Ultimately, this incentive effect can help make future crises less likely. Strengthening capital requirements The crisis has nakedly exposed the dangers of excessive leverage. It also revealed a number of fundamental weaknesses of existing capital requirements. While model-driven risk-weighted capital requirements are sensible and should be maintained, they are not perfect and very likely never will be. Most of us have had to learn the hard way that the modeling of risk involves substantial risks itself. Despite risk-weighted capital ratios that in most cases exceeded the regulatory minima, leverage was a key source of vulnerability going into the crisis. Excessive leverage not only intensified the impact of mistakes on the financial situation of individual banks. It also amplified the crisis as ongoing deleveraging in the industry inevitably put downward pressure on financial markets and on the real economy. It is now also clear that banks were undercapitalized at the start of the crisis.
As the extent of the effect of wage developments on production costs, aggregate demand and inflation depends on the fiscal policy and the change in employment, we monitor the interaction between the rise in minimum wages and the fiscal policy closely. Our mediumterm projections are based on an outlook that tax adjustments and administered prices, excluding those already announced in January, will not exceed the inflation target and will remain consistent with automatic pricing mechanisms. The medium-term fiscal policy stance is based on the Medium Term Program projections covering the 2016–2018 period. Conditional on this outlook, we expect inflation to improve gradually and reach the 5-percent target in the medium term. 3. Inflation and the monetary policy outlook  Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Given a decisive policy stance that focuses on bringing inflation down, the 5-percent target is expected to be achieved gradually; inflation is likely to stabilize around 5 percent as of 2018 after falling to 7.5 percent in 2016 and to 6 percent in 2017. In this context, inflation is expected to be, with 70 percent probability, between 6.1 percent and 8.9 percent (with a midpoint of 7.5 percent) at end-2016 and between 4.2 percent and 7.8 percent (with a mid-point of 6 percent) (Chart 20). 8  BIS central bankers’ speeches  Chart 20. Inflation and Output Gap Forecasts  *Shaded region indicates the 70 percent confidence interval for the forecast.

Furthermore, we will monitor closely the effects of the adjustment in minimum wages on overall wages and on inflation (Chart 14). Chart 13. Chart 14. (Seasonally Adjusted, Annualized 3 Month Average, Annual Percentage Change)  (2003 Prices, TL)  Core Inflation Indicators SCA-H and SCA-I  Source: TURKSTAT, CBRT  Real Gross Minimum Wage  *Real gross minimum wage is obtained by dividing the average gross minimum wage at current prices to the consumer price index in a given year. Consumer price index is taken as 2003=1. Consumer prices in 2016 are based on January 2016 Inflation Report projections. Source: Ministry of Labor and Social Security, TurkStat, CBRT. In sum, annual inflation increased in the fourth quarter due to an ongoing rise in food prices as well as the lagged effects of the Turkish lira depreciation throughout 2015. We believe that the upcoming inflation outlook will depend on both the volatility in energy and unprocessed food prices and the effects of the global market uncertainty on inflation expectations. In addition, the large adjustment made to net minimum wages for 2016 will have an impact on inflation. Therefore, we expect inflation to remain elevated for some time. At this juncture, in addition to maintaining our tight monetary policy stance, fighting against the structural elements of inflation also remains important. Notwithstanding the significant external shocks in recent years, we were able to limit the worsening in inflation and inflation expectations thanks to our current policy framework, but price stability is yet to be achieved.
A recent estimate of the number of unemployed is an appalling 30 million.” Except for the phrasing and style, that speech could be cut and pasted from that address in 1933 to describe the situation today. The queues of the unemployed that we used to see in 1930s-vintage black-and-white photographs we are now seeing on television in living colour. Youth unemployment in southern Europe is especially high. The Red Cross is setting up food banks in Spain. The middle class is being hit by higher taxes, lower pensions and unemployment. Political scientists tell us that this is a recipe for social and political unrest.3 In May 1945, the work began to rebuild our country after the Second World War. At that time, Friedrich Georg Nissen was the highest-ranking official in the Ministry of Finance. Nissen trained in the law, and the photograph of him in Einar Lie’s book on the history of the Ministry of Finance shows a man formally dressed in a three-piece suit. He believed that the central government budget should be balanced each year. Fiscal policy was conducted based on this principle, which leading politicians also agreed with.4 Tax revenue was to be spent, but not a penny more. Broadly speaking, the prevailing paradigm up until the Great Depression of the 1930s – both in economic policy and in economic theory – was that the authorities’ role should be limited to keeping domestic order and ensuring a stable and predictable regulatory and operating framework.

Sakvithi episode is a classic example of the ability of shrewd persons to exploit society’s desire for accumulating quick wealth by skipping the hard path which it should normally take. Hence, it is also an exploitation of people’s desire to become rich. This desire is embedded equally in both the poor and the rich: the poor to get out of poverty quickly and the rich to become richer and more influential. Hence, the schemes of quick high returns are craftily designed to satisfy this psychological desire. Many schemers who pose as micro-financiers too resort to this tactic and the poor unknowingly fall victim to their schemes. BIS Review 82/2009  1  The modus operandi of such schemers has been the same. They would form a microfinance institution because it is in high vogue today and the society is ready to accept it as social responsibility which one should perform for community’s benefit. This explicit social legitimacy allows them to operate under the umbrella of microfinance which is artificially boosted by appropriate marketing and fitting propaganda. In this manner, savings are mobilised from the poor and funds are raised from the donors. Eventually, the end-use of resources is not for helping the poor, but for siphoning for other activities. When such activities do not generate a continuous income sufficient to meet the obligations to depositors, the micro-financier is not left with a choice, but to default the savers who had placed their trust in him.