samchain/econo-pairs-v1 huggingface dataset:
The prospect of the monetary policy stance returning to normal has likewise been reflected in an upturn in long-term interest rates in the euro area. Specifically, the 10year OIS rate, which proxies the euro area risk-free interest rate, has risen by 170 bp since the beginning of the year. 6  Domestic fiscal policy Domestic economic policies also have a key role to play in the current climate. But fiscal policy headroom is constrained by high government debt and structural budget deficits. It is therefore important for domestic fiscal policy to exploit its capacity for highly granular action focused on the households, firms and sectors most vulnerable to this combination of shocks, many of which had not yet fully recovered from the adverse effects of the pandemic. In particular, fiscal policy action should target lower-income households, which bear the brunt of inflation, and more energy-intensive firms. Moreover, again with the aim of minimising their impact on budgetary imbalances, it is important that the fiscal policy measures be temporary so as not to further increase the structural deficit, and that the instruments used do not skew price signals, which would hinder the adjustment in demand. Likewise, averting any feedback into the current inflationary process is further reason to avoid an across-the-board fiscal impulse and the widespread use of automatic indexation clauses in expenditure items. This deindexation must be part of the incomes agreement to which I will return later.

This, in turn, introduces uncertainty over the behaviour of the incomes of these agents, which means they tend to postpone their consumption and investment decisions. The sharp decline in the consumer confidence indicator in March (the largest decrease in the historic time series, which goes back to July 1986) gives an indication of the magnitude of these effects. This fall suggests that the increase in uncertainty may have begun to adversely affect household spending decisions. The results of the latest edition of the Banco de España Business Activity Survey (EBAE) suggest that the war has begun to worsen the expectations of non-financial corporations regarding their turnover and also the duration of the global supply chain problems, which is now estimated to be longer. Third, the invasion of Ukraine will affect the Spanish economy through the trade channel, the direct impact of which is assumed to be moderate, as bilateral trade flows with the countries at war are relatively limited. In 2019, the last year before the pandemic, Spanish goods exports to Russia and Ukraine represented only 1.6% and 0.3% of the total, 2  respectively. Russian tourism, meanwhile, accounted for 2.2% of total spending by foreign tourists. However, the indirect effects on Spanish trade flows may be significant. The war will particularly affect central and eastern European countries, which are more exposed to Ukraine and Russia, and, therefore, the growth of Spanish export markets.
Unemployment is unlikely to rise much more, and the production gap should gradually disappear in the course of the coming year. I shall now describe the development of inflation over the past few months and explain our new inflation forecast in more detail. The dotted green curve in the graph shows our inflation forecast of December 2001. At that time, we assumed that the three-month Libor rate would remain stable at 1.75% and accordingly expected a slight general rise in inflation to approximately 1.5% by the end of 2004. The fluctuations in inflation predicted for 2002 reflect basis effects. Last December's forecast was based on the assumption that the US economy and the European economy would stagnate until mid-2002 and would then gradually return to their potential growth path. Our forecast of December 2001 slightly overestimated the development of inflation for the first quarter 2002 and at the same time slightly underestimated inflation for the second quarter 2002. The deviation from the forecasting path is due mainly to the development of oil prices and the changed time of collecting data on clearance sales prices for clothing and shoes. Year-on-year inflation, as measured by the national consumer price index, rose to 0.6% in the first quarter 2002 from 0.4% in the fourth quarter 2001. In April, inflation increased to 1.1%, while declining again in May to 0.6%. The distinct rise in April was largely due to yet again higher oil prices and higher prices for clothing and shoes.

In both cases, the National Bank would react with adequate means. To conclude my remarks, I would like to reiterate what role the exchange rate plays in our monetary-policy decision-making process. We live in a system with flexible exchange rates. Such a system is very advantageous for Switzerland, but once in a while exchange rate fluctuations have to be reckoned with. We are currently going through a period characterised by a strong Swiss franc. In the past, there have always been phases during which the Swiss franc tended to be very strong. Experience has also shown, though, that there have always been corrective phases as well. It is the National Bank's responsibility to maintain price stability in the medium term, thus creating a favourable environment for the development of all sectors of the economy. For monetary policy, the exchange rate is an extremely important measure, as it influences the price level directly via import prices as well as indirectly via capacity utilisation in the export sector, and thus via economic growth. Particularly the last nine months exemplify the strong influence of the exchange rate on Switzerland's monetary policy. We always neutralised the tightening of monetary conditions, which was brought about by the appreciation of the Swiss franc, and rendered Swiss franc investments less attractive. We are aware of the fact that these measures do not provide relief to all sectors of the economy at the same time or to the same extent.
Although this phenomenon is not as intense as it was in past decades, it is still significant. There is still the risk, however, that if wages remain high, the convergence of inflation may take longer. Another risk is that the evolution of wages may be reflecting a narrowing of output gaps with respect to the baseline scenario and, therefore, increased inflationary pressures. World economic data have shown lower growth in the US and a strengthening of the more positive outlook in the Eurozone. Although the worsened US data for the first quarter are believed to be mostly temporary, as I said, the moment when the market expects the Fed to begin adjusting the policy rate has been postponed. Nevertheless, long-term interest rates have risen, although with some reversal in recent days, and the yield curve has steepened in the US and several other economies (figure 5). This phenomenon is partly related to the change in the macroeconomic outlook-the recovery process in the developed world and higher inflation-, but also to the decompression of the low term premiums associated with portfolio reallocations. Still, external financing conditions remain favorable by historic standards. In Chile, with ups and downs, the peso has appreciated in nominal and real terms. The peso/dollar parity is around 615 as of the closing of the Monetary Policy Report, and has risen further to a little over 620 pesos to the dollar since. This, after surpassing CLP 640 in March and standing near CLP 600 in May.

In recent decades, however, growth in Norway and many other countries has slowed. 3/9  BIS central bankers' speeches  Chart: Norwegian productivity growth Since 1980, average productivity growth in Norway, as measured by growth in GDP per hour worked, has been only around one-third of what it was in the first decades after the war. One explanation is that we have invested less. Increased use of machinery and other real capital per worker long helped make labour more efficient, but since 1980 the contribution from capital has been smaller. With low investment in the business sector over several years, there is the prospect of a further decline in the contribution from capital. There is probably also less to be gained from raising education standards. If we go back a few decades, the potential was considerable. In 1950, seven in ten Norwegians had only seven years of compulsory schooling. Today, a similar proportion has at least completed upper secondary education, and around one-third have a university education. Those entering the labour force continue to be better educated than those retiring from it. This may provide a boost to productivity. But we cannot expect the same return on higher education standards as in previous periods. Productivity growth that cannot be explained by increases in real capital or education standards is what we economists call total factor productivity, or TFP. Technological progress, better organisation of work and gains from labour mobility across industries are key factors behind TFP growth.
From those assumptions are derived equations of motion for the behaviour of  4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  consumers and firms – which, rather revealingly, are often called the Euler conditions. Then, and only then, are these first-order conditions for behaviour taken to the data to be tested. These models, so derived, predictably exhibit the same damped harmonic motion as Newton’s pendulum. Let me give a couple of examples of this approach in mainstream practice in economics and finance. The most famous equation in finance is probably this one:  Figure 1: The Black-Scholes Formula  Source: Black and Scholes (1973). This is the Black-Scholes options pricing formula (Black and Scholes (1973)). Under a (relatively) small set of assumptions, it provides a (relatively) simple analytical description of how to price a financial option. It cannot rival Einstein for its simplicity and aesthetic beauty. But it nonetheless has many of the trademark characteristics of theoretical physics. That should come as no surprise because this equation was itself drawn from theoretical physics. In seeking a solution to their option-pricing problem, Fisher Black, Myron Scholes and Robert Merton drew an explicit link between their contingent-claims pricing problem and the heat transfer equation in physics (Churchill (1963)). If not quite a lift and shift from theoretical physics, the Black-Scholes formula was certainly a genetic mutation.

And, most striking of all, flows of information across agents and borders are occurring on an altogether different scale than at any time in the past. All of these trends increase the importance of taking seriously interactions between agents when modelling an economy’s dynamics. These benefits can perhaps best be illustrated by drawing out some of the key behavioural differences between ABM and mainstream macro-models. These differences should not be exaggerated: in practice, ABMs lie along a spectrum with micro-founded DSGE models at one end and statistical models at the other. But nor should they be overlooked. (a) Emergent Behaviour  In standard macro-models, system dynamics are fully defined by the distribution of shocks to the economy and the behavioural parameters determining how they ripple through the system. There is a classic Frisch/Slutsky impulse-propagation mechanism determining the economy’s fortunes. If the distribution of shocks and the parameters of the model are known and fixed, the dynamics of this system are well-defined and predictable. Complex systems, of which ABM are one example, do not in general have these properties. The Frisch/Slutsky decomposition is very unlikely to be stable, if it exists at all. The reason is that a complex system’s dynamics do not derive principally from disturbances arising outside the system but from interactions within the system. Dynamics are endogenously, not exogenously, driven. These feedback effects within the system may either amplify or dampen cycles.
Durmuş Yılmaz: Green shoots – how vigorous and how sustainable? Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the Conference on “Green shoots – how vigorous and how sustainable”, IMF-World Bank Annual Meetings 2009, Istanbul, 5 October 2009. *  *  *  Ladies and gentlemen, First of all, I would like to welcome everyone to Istanbul. It is a great pleasure for me to be here addressing such a distinguished audience as we convene for the 2009 Annual Meetings. “Green shoots” has been a popular metaphor to describe the recovery process. And today, I will try to elaborate on our path to build a career as a prudent gardener. I want to begin with discussing the path that brought us to this crisis. Then, I will talk about the recovery signals in both global and Turkish economy. I will conclude my speech with my thoughts on the solidity and sustainability of these signals. As is well known, financial strains originated in advanced economies abruptly mutated into a full-blown crisis and had a devastating effect on international capital markets. As the crisis intensified, measures of perceived risk escalated to record levels and major financial institutions suffered massive losses. At the same time, liquidity shortages, tighter credit conditions, and heightened uncertainty were associated with a sharp decline in both private consumption and investment spending. In fact, many economies fell into recession or have seen their growth rates decline sharply.

With the reversal of global developments fueling inflation in the last quarter of 2008, the Central Bank took prompt action to cut interest rates and adopted a pioneer role among emerging markets. The analysis conducted by the CBT indicates that policy rate cuts of a total of 950 basis points have alleviated the severity of excessive volatility in economic activity. The developments since November 2008 in domestic financial markets and falling inflation have confirmed the accuracy of our projections and the policy rate-cut decisions, increasing the confidence in monetary policy. As a consequence of the measures taken and the limited recovery in risk perceptions, the level of market interest rates today is below the pre-global crisis level in both nominal and real terms. Having neutral interest rates at lower levels during economic recessions is an expected development in well-functioning economies, but it has never been experienced in Turkey before. This development should be perceived as an indicator of the normalization of the Turkish economy. Despite the marked deterioration in economic activity in Turkey, there were at least three factors that prevented an outright depression. These factors were the soundness of the financial system, low levels of Turkish household indebtedness, and an assertive monetary policy stance, which aimed at mitigating the impact of the crisis on the domestic economy. Reviewing these factors, albeit briefly, would allow a better understanding of Turkey’s economic prospects. The Turkish financial system proved to be resilient to the financial crisis relative to many other emerging economies.
One of the many official reports on the lessons took a mandate about capital flows and turned it into a series of prescriptions on national balance sheets, including being attentive to vulnerabilities and to perverse incentives.1 The emphasis of the Draghi Report was hardly surprising. Brazil, Mexico, and Russia had suffered from mismatches in the maturity and interest-rate structure of their public debt. For Korea, it had been mismatches in the external funding of the banking sector. In Indonesia, the non-financial corporate sector had been overly reliant on short term, foreign-currency-denominated external debt. In each case, the country’s economy was eventually brought to heel by a run. It might have been easy for “developed” economies to ignore the Draghi Report. But efforts were made to draw wider lessons amongst advanced economies. Thus, in late 2000, the Bank of England ran the first of a short series of annual articles that tried to draw out the implications of the UK’s balance sheet for financial stability. It is worth quoting fairly extensively from that first article:2 “It is advisable for authorities to monitor a range of balance sheet indicators, focusing on variables and relationships that have in the past indicated financial fragility.....the size and structure of the economy’s foreign currency debt are particularly relevant, especially for countries on a fixed exchange rate regime. Sound risk management by the public sector warrants particularly high priority. National authorities need to adopt prudent strategies and practices in managing their own debt liabilities and financial and other assets.

We will continue to pursue investigations and enforcement actions into serious conduct breaches to the full extent of powers provided under laws administered by the Bank. Beyond the limits of the Bank’s powers, the Bank 2/3  BIS central bankers' speeches  maintains close cooperation with other authorities to facilitate investigations and enforcement actions. Conclusion Building trust is not easy. It takes hard work, a determination to do the right thing and confidence to make judgements in situations that are not always well-defined. Taken in this context, the work of the FSPB serves as an important anchor for decisions and actions that will engender trust in the financial industry. In a fast moving world, a strong commitment to a professional code of conduct provides the assurance that the public seeks – that financial institutions and employees are held to and will consistently demonstrate high standards of professional and ethical conduct. I hope that the industry will continue to lend its strong support to the FSPB’s work. Following today’s launch of the Professional Code, the Bank would urge financial institutions and professional bodies to reflect the standards set out in the Code in the values and conduct that you demand of your staff, agents and members. This needs to move beyond symbolic gestures, to the diligent implementation of policies and programs that promote the desired culture.
The financial transactions are derived from real economic activities, and hence risks are understandable and manageable, with lending to domestic companies accounting for 70 percent of loan portfolio and the rest is mainly mortgage loan. The direct exposure of Thai banks to European countries is also very small. Investments and loans made by Thai banks to Europe are only 0.3 percent of total assets, while claims on Thai banks by European countries are even smaller at 0.03 percent of total liabilities. Nevertheless, we will be watchful of the second round impact of the EU crisis, particularly via impact on exports that could impact asset quality. Apart from the existing solid fundamentals outlined above, Thailand is currently striving to develop a more efficient financial system to anticipate increased regional integration. The key driver and rationale behind this momentum is clear. ASEAN economies aim to increase competitiveness from increased economy of scale and scope, and technology transfer, with link up of supply chain of ASEAN and ASEAN plus 3, in particular. This, in turn, will help strengthen our competitive position in the global market. Thus, the vision of financial sector is that it should seamlessly facilitate this process, whilst safeguarding financial stability. It should be emphasized that economic integration in ASEAN is not aimed to reach the same level of integration as EU, as the single currency and monetary union is not on the agenda.

Forecasts for inflation, output, the interest rate and other variables are based on an assessment of the current situation and a perception of how the economy functions. Disturbances to the economy may result in changes in the forecasts. Our ambition must be to reduce uncertainty with regard to our own response pattern. That actual interest rate developments will deviate somewhat from Norges Bank's forecast must be expected to be the rule rather than the exception. There is, in other words, substantial uncertainty associated with future interest rates. I would draw your attention to the fact that the Executive Board, when providing a more precise indication of where the interest rate level should lie over the coming four month period, operates with an interval of around one percentage point. Uncertainty does not of course diminish as we look further ahead. This is a familiar situation for financial market participants, who are constantly changing their expectations concerning future interest rates as the economy is exposed to disturbances. Market participants’ interest rate expectations can be calculated on the basis of observed money market rates. The deviation between market expectations and the actual interest rate has been substantial in periods. One important reason for this is that the Norwegian economy has been exposed to  7  For more about these criteria, see Qvigstad, J.F.Q. (2005): “When does an interest rate path “look good”? Criteria for an appropriate future interest rate path - A practician’s approach”, Staff Memo 2005/6, Norges Bank, se www.norges-bank.no.
In Asia, Swiss direct investments amount to 35 billion Swiss francs, and Swiss firms employ 300,000 people, up 20% from 2000. In Singapore, to take an example, Switzerland is among the top European investors, ranking third after the UK and the Netherlands. The 250 Swiss companies here contribute 18% to total European investment in Singapore. Our trade relations with Singapore have developed rapidly in recent years. Since the late 1990s, total bilateral trade has increased by almost 50% to a new record of 1.9 billion Swiss francs last year. As a consequence of the rapid expansion of our trade with Asia, in general, and Singapore, in particular, the overall significance of Asian trade for us is now of the same magnitude as our trade with the United States. However, taking into account the relative size and the potential in Asia, there is still a lot of leeway for Swiss firms. A similar picture can be observed with respect to Swiss direct investment on the continent of Asia. Despite an increase of 30% between the late 1990s and 2004, Asia still only accounts for 7.7% of total Swiss investment abroad. Although Singapore commands the lion's share in this regard – 2.5% or 11 billion Swiss francs – it is evident that there is enormous potential for the expansion of bilateral economic relations between our two countries, and even more between Switzerland and other emerging Asian countries.

Jean-Pierre Roth: Switzerland and Singapore - small countries as platforms for global business Keynote address by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Swiss Business Association, Singapore, 18 September 2006. *  *  *  Once in a while, the Annual Meetings of the International Monetary Fund and the World Bank do not take place in Washington, as usual, but are held somewhere else in the world. The fact that we are meeting in Singapore this time is a welcome opportunity for me to return to the "City of the Lion". I am happy to be with you today and I would like to thank the Swiss Business Association and Ambassador Woker for hosting this Association lunch. For Swiss people, it is always a pleasure – even a delight – to spend time in this fascinating city. Since Singapore is often referred to as the "Switzerland of Asia" it is particularly interesting for them to make comparisons with their home country. As a matter of fact, I am one of some 50,000 Swiss who visit Singapore each year. 1 Singapore is a unique place with its beautiful skyline, its outstanding location, its pulsating life, and – most of all – its openness to the world. Interestingly, Singapore and Switzerland share many common features. In particular, both of our countries have to deal with surrounding neighbours that are much larger and more powerful.