samchain/econo-pairs-v1 huggingface dataset:
Whatever the outcome, it will be important to maintain flexibility to respond to new data and events. The flexibility the MPC has had to pursue its target independently since 1997 has brought great benefits. The MPC has also shown flexibility in developing new instruments such as QE to achieve its goals. Similarly, as monetary policy begins to tighten, the MPC will be focussed on Bank Rate as the marginal tool of monetary policy, given it’s more flexible in nature than QE. And occasionally, we might also consider tyre tread depth, just to see if the post crisis economy reverts to pre-crisis patterns or whether we need to think about the future a bit differently. 6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  References Alesina, A. and Summers, L. (1993) “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence,” Journal of Money, Credit and Banking, Vol. 25, No. 2, pp. 151-162. Brainard, W. (1967), “Uncertainty and the effectiveness of policy”, American Economic Review 57, 411–425. Broadbent, B. (2015) “The MPC’s forecasts and the yield curve: predictions vs promises,” Speech given at Reuters. Dison, W. and Elliot, D “Mean and modal Bank Rate expectations,” blog available on http://bankunderground.co.uk/ Evans, C. Fisher, J. Gourio, F and Krane, S (2015) “Risk Management for Monetary Policy Near the Zero Lower Bound.” Brookings Papers on Economic Activity.

4  BIS central bankers’ speeches  have some effect within the first year. Comparisons between the US and the UK indicate that the transmission mechanism may be a bit quicker in the UK than in the US, perhaps reflecting the prevalence of longer term fixed rate mortgages in the US. However, these estimates are generally based on the experience of changing policy when rates are positive – relatively little is known about the transmission of negative interest rates which have only begun to be used quite recently in parts of Europe. As for QE, we can be confident that it was effective in reducing the severity of the impact of the financial crisis. For example analysis by Bank staff suggests that QE had a peak impact on the level of real GDP of around 2.5%, 8 and helped limit the long term impact of the recession on the economy. However, our knowledge of how QE affects the economy is based only on what we can learn from its use since 2009 – a much more limited sample than that available for changes in Bank Rate. And it may well be that were it used in different circumstances its effect could be quite different. In light of the uncertainty about the transmission of unconventional monetary policies, the MPC has expressed a preference to use Bank Rate as the marginal instrument for monetary policy when the time comes to tighten.
Swedish inflation 1900–2022 Annual percentage change 60  60 First World War  50  CPI  50  40  40  30  30  20  Second World War  Wars in the Middle East and oil crises  Korean War  20  10  10  0  0  -10  -10  -20  -20  -30 1900  1910  1920  1930  1940  1950  1960  1970  1980  1990  2000  2010  2020  -30 2030  Note. The figure for 2022 relates to the average of January-April. Source: Statistics Sweden  4 [14]  There are some occasions when it has been higher than 10 per cent, sometimes much higher. All of them occur in connection with war or some other type of conflict. Some periods are short peaks, where inflation rapidly falls back again, while inflation in the 1970s and 1980s was fairly high over a longer period of time. Although inflation did not always exceed 10 per cent, I have chosen to regard this as a continuous period. I intend to go through each of these periods – why inflation rose, why it fell back again, and how economic policy-makers thought and acted. Highest inflation in connection with the First World War So let me then begin with the First World War. The inflation during the First World War is by far the highest in the whole period and peaked in 1918 at 47 per cent.

Back in 500 BC Sun Tzu, Chinese general and author of a book on the art of war, observed: “Where the army is, prices are high; when prices rise the wealth of the people is exhausted.”1 What this refers to is, of course, that an army of perhaps tens of thousands of soldiers requires a lot of resources just to stay alive and these can be difficult to raise in a geographically restricted area. Demand simply rises in relation to the available supply of food and other necessities, and this causes inflation to rise. If, as has often been the case throughout history, the army supports itself by looting, it may be able to survive for a while, but for the civilian population, prices will rise because supply decreases. Of course, an army could not survive indefinitely in one place, because resources sooner or later run out. In his book “Ofredsår” (“Years of Trouble”), Peter Englund has likened the Swedish army during the Thirty Years’ War to a shark that must be constantly on the move to avoid succumbing.2 Once a war had started, the armies of the time lived partly their own lives, separated from the state, and largely organised their own supplies, especially of course during campaigns abroad. Inflation therefore increased more locally depending on where the armies happened to be, as a result of the demand for food and other necessities exceeding supply.
Stock, J and Watson, M (2003), ‘Has the Business Cycle Changed and Why?’, NBER Macroeconomics Annual, Vol. 17. Surowiecki, J (2004), The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, Doubleday Books. Taylor, M (2018), ‘What Democracy Needs Now’, Royal Society for the encouragement of Arts, Manufactures and Commerce, RSA Chief Executive’s Lecture 2018. Tetlock, P and Gardner, D (2016), Superforecasting: The Art and Science of Prediction, Broadway Books. Tucker, P (2018), Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State, Princeton University Press. Tuckett, D (2011), Minding the Markets: An Emotional Finance View of Financial Instability, Palgrave. Tuckett, D and Nikolic, M (2017), ‘The role of conviction and narrative in decision-making under radical uncertainty’, Theory & Psychology, Vol. 27, No. 4, pp. 501-523. Turner, M and Pratkanis, A (1998), ‘Twenty-Five Years of Groupthink Theory and Research: Lessons from the Evaluation of a Theory’, Organizational Behavior and Human decision Processes, Vol. 73, Nos. 2/3, pp. 105-115. Wagner, C and Vinaimont, T (2010), ‘Evaluating The Wisdom of Crowds’, Issues in Information Systems, Vol. 11, No. 1, pp. 724-732. Van Reybrouck, D (2016), Against Elections: The Case for Democracy, Bodley Head.

Despite a communications revolution, public understanding of central banks remains low and public trust in central banks has fallen. Improving both calls for a second revolution, focussed on educating and learning from the general public. The Age of Innocence may be over, but the Era of Engagement has only just begun. st  This new era may mean 21 century central banks becoming more disbursed and personalised in their communications, creating new infrastructure to interact with the public and extract their folk wisdom. Thomas Jefferson said democracy is something you can only learn by doing. The same is true of central banking. For the Bank of Estonia entering its second century, and for the Bank of England in its fourth, there is much still to learn and even more to do. 24  All speeches are available online at www.bankofengland.co.uk/speeches  24  References  Akerlof, G and Shiller, R (2009), Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism, Princeton University Press. Bailey, M, Cao, R, Kuchler, T and Stroebel, J (2016), ‘Social Networks and Housing Markets’, NBER Working Paper, No. 22258. Baker, S, Bloom, N and Davis, S (2016), ‘Measuring Economic Policy Uncertainty’, Quarterly Journal of Economics, Vol. 131, No. 4, pp. 1593-1636. Bank of England (2013), ‘Monetary policy trade-offs and forward guidance’, August 2013. Barnes, L, Feller, A, Haselswerdt, J and Porter, E (2018), ‘Information, Knowledge, and Attitudes: An Evaluation of the Taxpayer Receipt’, The Journal of Politics, Vol. 80, No. 2.
Moreover, will the enlarged EU capital market suck in capital from Asia to Europe? In the first four months of this year, for example, BIS Review 95/1998  -3-  Japanese net purchases of European securities totalled $ billion, while net sales of bonds and stocks in Asia totalled $ billion. Extended diversion of capital to Europe would undermine Asia’s growth prospects as well as Hong Kong’s position as an international financial centre. This could also happen if the European banks are tempted to consolidate their business in Asia to focus their efforts on their enlarged home market. This is not the occasion to be pessimistic. Overall, I believe that the euro will be a good thing for Europe and for the world economy. But as with any major change in the world financial architecture, Hong Kong will need to monitor developments closely and respond quickly to emerging threats as well as opportunities. Let me now turn to the HKMA’s regulatory response to the euro in Hong Kong. First, banks in Hong Kong need to be prepared to handle and account for the euro, particularly during the awkward transitional period before the legacy currencies disappear entirely. If they are not ready, many of the potential benefits of the euro for Hong Kong will simply not materialize.

Moreover, uncertainty over  1  See the Financial Stability Board (November 2020): The Implications of Climate Change for Financial Stability  1  these processes could undoubtedly have a profound impact on the financial sector in the medium to long run. In parallel with physical risks, the transition towards an environmentally sustainable economy entails a sweeping change in production technologies and a reallocation of activity across sectors and companies. Actually, such restructuring will mean that, in the short run, some sectors will increase their profits while others will incur losses, with obvious implications for the financial system and its stability. These changes in profits may come from the need to adapt towards greener ways of producing, owing to shifts in consumer and investor sentiment, from public regulation or taxation. In this case, for estimating transition risks, the most relevant factors are the carbon footprint and the environmental impact of the sectors and companies to which financial firms are exposed. The impact of climate change on inflation Beyond its effect on the financial sector, climate change could have a fairly direct impact on central banks’ ability to stabilise inflation. Policies aimed at promoting the transition towards a carbon-neutral economy – such as carbon taxes – are likely to affect the volatility of headline inflation, which includes energy prices. Most inflation-targeting central banks, including the ECB, target headline inflation, because it is more representative of the citizens' consumer basket than other notions of inflation.
The latest projections by international agencies place GDP growth for the euro area countries as a whole at around 1% in 2014 and 1.5% in 2015, with this naturally against a background of price stability. With specific regard to the Spanish economy, two positive indicators have just been released. First, on the flash estimate available, GDP is expected to have grown by 0.1% in the third quarter compared with the second quarter. This is the first positive figure after nine consecutive quarters of contraction. The primary explanation for this figure lies in the contribution of the external sector, underpinned more by the export performance than by the containment of imports. As to the composition of domestic demand, some changes are appreciable: private consumption spending is estimated to have grown slightly, albeit still against a backdrop of great weakness, the result of the decline in disposable income, the loss of household wealth and high household debt. BIS central bankers’ speeches  1  The second positive indicator stems from the latest Labour Force Survey, with a reduction in the number of unemployed, an increase in numbers employed and a significant fall in the rate of increase of unemployment, at 2%, compared with 16% a year ago and almost 5% in the second quarter. These signs of a possible change for the better in our economy must be placed against the background of the correction of the serious imbalances built up during the previous expansion.

Some analysts estimate – and at the Banco de España this appears to be a technically reasonable estimate – that, owing to the labour reforms, the economic growth threshold for job creation may have been lowered, which should impel the start of a correction in the unemployment rate with what are still moderate GDP growth rates. As regards private-sector debt, Spanish households strongly increased their debt in the expansion preceding the crisis; their debt ratio rose from less than 70% of gross disposable income in 2000 to close to 130% in 2007 and 2008. Non-financial corporations moved on a  2  BIS central bankers’ speeches  similar path, which lasted longer over time, with their debt ratio climbing from over 60% of GDP in 2000 to a peak of over 140% in 2010. Here, too, there are signs of correction. Since 2010, households’ and firms’ debt has fallen by almost 10 pp and 20 pp, respectively. Admittedly, though, such restructuring is slow as a result of weak nominal growth in household and corporate income. But the soundness of the recovery will unquestionably also depend on the progress made in normalising financing flows. Since 2009, outstanding credit extended by our banking system to Spanish non-financial corporations and households has been contracting uninterruptedly. As at September 2013 it was 5.4% lower than a year earlier, but the decline was more marked for firms than for households: a decline of somewhat more than 9% for the former, and of 4.5% for the latter.
Indeed, this attitude has, in many respects, proved highly advantageous for the country. Nonetheless, it doesn’t change the fact that international competition has increased and that the Swiss are making the most of the growing number of possibilities to avail themselves of goods and services from abroad. BIS Review 69/2004  1  Of course, we can’t talk about Switzerland without also talking about the Swiss franc. The Swiss franc forms the basis for the Swiss National Bank’s monetary policy autonomy and for price stability. It also underpins the efficient Swiss capital market, which is characterised by a low interest rate level, when compared internationally, and which represents an important locational advantage for the country. The European political and economic environment - of which Switzerland is an integral part - has, however, gone through a great deal of change. It is therefore not surprising that our relationship with Europe is a topic of much discussion in my country. 2. Switzerland and the European scene  For almost six years now, Switzerland has been surrounded by the single European currency. And for six years we have been trying to make it clear to our friends abroad that Switzerland is nevertheless not an island, but is in fact deeply integrated into Europe. Approximately 20 percent of our workforce comes from EU member states. A total 60 percent of our exports go to the EU and 80 percent of our imports come from there.

Accordingly, we envisage inflation to decline until September, and increase slightly in September due to base effects. Then, following a fluctuating course, we project that it will reach 6.9 percent in the year-end. In addition to these forecasts, we discuss alternative scenarios on the inflation outlook and the global economy in the Risks section of the Inflation Report. You can examine the Report for details. While concluding my remarks, I would like to thank all my colleagues who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11
st  Looking into the future, we must direct our resources to ensure that banking supervision in the 21 century is more dynamic, more preventive, more flexible, more inclusive, and more transparent. We should continue adapting and learning. I believe the ultimate objective of financial stability increasingly  BIS Review 45/2006  3  requires co-operation and properly aligned incentives on the part of the industry, markets, central banks and supervisors. Let me close by saying that the Committee welcomes the work being done in a number of nonmember countries and believes that continued outreach is essential. Dialogue with countries outside the Basel Committee played a critical role in the development of the revised framework, and I am personally committed to continuing such dialogue in the future. Thank you very much. 4  BIS Review 45/2006

Philip R Lane: Interview with RTÉ (Ireland’s National Television and Radio Broadcaster) Interview with Mr Philip R Lane, Member of the Executive Board of the European Central Bank, and RTÉ (Ireland’s National Television and Radio Broadcaster), conducted by Mr Robert Shortt on 13 February 2020 and broadcast (in part) on 13 February 2020. * * *  There has been some criticism of ECB policy when it comes to quantitative easing and negative interest rates. Some people have described it as an experiment in monetary policy. There’s been this assertion that interest rates are no longer an effective tool for stimulating economic activity. People have painted the scenario of the Japanification of the eurozone economy. What’s your response to all of that? We don’t agree with that analysis. If you go back to 2014, which is when this policy started, since then ECB monetary policy has been very effective. We have seen very low interest rates for firms and households. We have seen a big increase in employment in the euro area economy. And we do see inflation moving upwards. Without these policies these disinflationary pressures would be more severe. We would not only have lower inflation: we could even have the risk of deflation. And without these policies the recovery in Europe we have seen in the last five or six years would not be so far advanced. So we think ECB policy is still effective.
However, our situation is by no means unique, and both the emerging, and more developed economies have felt the effects of what has turned out to be a global recession. The challenges presented to our economy in general and the financial sector in particular, brings to the fore the critical role that the Zambia Institute of Banking & Financial Services is expected to play in equipping young men and women with the much needed capacity to strengthen the financial services industry. We shall no doubt be confronted with such and many more similar challenges as we strive to achieve economic growth and poverty reduction in our country. Ladies and Gentlemen, in order to be well prepared for such trying times ahead, we need to groom our best talents to assume leadership positions in all sectors of the economy especially in the financial sector. To achieve this vital task of nurturing our future leaders, the Government is trying its level best to provide education to all Zambians. However, providing support to education for the benefit of all citizens is never an easy task. It is for this reason that the Government recently classified Education and Health as economic sectors. This entails that private investors are now provided with incentives to invest in the area of Education. This policy is expected to provide the much needed investments in institutions such as the Zambia Institute of Banking and Financial Services. Looking around in this gathering, I see people who are very well connected to private investors.

Experiences during the pandemic with historically low defaults will also not be representative for the present downturn because of the unprecedented role that monetary and fiscal policy support played during the pandemic. Indeed, the health and resilience of banks has increased significantly as they have built on the regulatory reforms and supervisory efforts that followed the great financial crisis. This has enabled them to support households and firms through the economic hardships stemming from the pandemic. We need banks to be able to do the same in the context of the current macroeconomic and climate challenges. We want banks to thrive. And we need them to play their role in the economy, now and in the future. This is why we continue to push them to assess whether their risk management tools and practices are still fit for purpose, and to improve them where necessary. And it's why we insist that banks should remain prudent and not take favourable developments in net interest income for granted. Let me conclude. As banking supervisors, much of what we have to do echoes the mindset of monetary policymakers. We have to remain on our guard. We are committed to delivering on our mandate of keeping the banking system safe and sound. We will make sure that the banks under our supervision remain mindful of and resilient to the risks that may emerge. And we will use all the instruments at our disposal. This goes beyond our formal supervisory measures.