samchain/econo-pairs-v1 huggingface dataset:
The two key geopolitical tensions in the world today – between Europe and Russia and between the US and China – are likely to persist over the medium term and lead to some degree of economic fragmentation. A weakening in globalisation in turn means less cost efficiency, less technology transfer, less innovation, and ultimately less productivity growth. The ongoing war in Ukraine could put Europe’s fiscal sustainability under growing strain. The continent is facing an energy crisis, with record high natural gas prices in the wake of the Ukraine war and hydroelectric energy production affected by widespread droughts. Governments across Europe are having to spend more to cushion households and businesses against high fuel and electricity prices and to accelerate investments in renewable energy. Europe is also entering a period of significantly greater defence spending in view of heightened geopolitical tensions. This will further strain public finances. The strategic rivalry between the US and China is deepening across multiple fronts, with increased decoupling in trade, technology, and finance. The US-China trade conflict has reduced bilateral trade and dampened global trade more broadly. The trade tariffs imposed by the two countries on each other have not helped either country, contributing to supply frictions and price pressures. More worryingly, the volume of global trade stagnated since the imposition of the tariffs in early 2018 until the eve of the pandemic in end-2019.

Finally, a rapidly aging population in many parts of the world could mean growing demand for goods and services that a shrinking workforce will struggle to meet. Third, the energy transition is likely to mean energy prices remaining on a steady upward trajectory. The imperatives of energy security and environmental sustainability are driving in the same direction – to reduce dependence on imported fossil fuels and switch to renewable energy. In the short to medium term, this transition to cleaner energy is likely to be inflationary. The Bank of England estimates that inflation will increase by nearly 0.6 percentage points in the 2020s in an orderly transition scenario and by as much as 2 percentage points by the early 2030s in a disorderly scenario. With the ongoing energy crisis. we are probably seeing a preview of a disorderly transition. And it is not just energy prices. Demand will surge for minerals such as copper, aluminium, cobalt, lithium, nickel, and rare earths, which are critical to various clean energy technologies, including wind turbines and electric vehicles. This could lead to what some analysts have referred to as greenflation, or rising prices for those metals and minerals that are essential to renewable energy and technology. Fourth, climate change could disrupt agriculture, driving food prices higher. Extreme weather conditions are becoming more frequent worldwide. Just this year, China and Europe have experienced one of their worst droughts on record, and Pakistan and India have seen devastating floods.
Ladies and gentlemen, On the 8th of May this year, only 15 days ago, Macedonia had the honor to represent its first preaccession economic program at the ministerial dialog between the ministries of economy and finance of the EU and the candidate countries in Brussels. The adopted conclusions that refer to our country, amongst other things, state that "generally, the document suffers from a lack of reliable statistics, impeding the analyses of the position of the country regarding the growth cycle...", which, you would all agree, has to do with the reliability, in such situation, with inflation calculations, particularly of the expected one. Furthermore, page 4 says that "in the area of economic statistics, top priority for Macedonia is to establish a capacity for regular production and submission of annual and sub-annual statistics", but, also, not failing to notice that "a certain progress has been made in the annual national accounts, following the ESA 95 concepts", and that we should move on in that area.

As long as the SNB can conduct an autonomous monetary policy, the Swiss franc will remain a crisis-resistant investment currency, and the interest rate bonus will be maintained. 4  BIS Review 60/2002  4. The euro's implications for the SNB's monetary policy  4.1. The monetary policy concept  With the euro now existing in its physical form, some cash transactions will tend to be effected in euros rather than in Swiss francs. This development will, in turn, have a negative impact on the demand for Swiss francs. But as I have set out before, there is no doubt that the large majority of domestic payments will continue to be transacted in Swiss francs. On the whole, the decline in seigniorage, i.e. the profit that central banks achieve with the circulation of money, is likely to be very limited. However, the main point I want to make here is that even if the creation of the European Monetary Union did have a significant impact on the demand for Swiss francs, this would not call the viability of the SNB's monetary policy concept into question. A possible change in the demand for money hampers monetary policy decisions especially if a central bank pursues money supply targets. The steering of the money supply as a monetary policy concept has by now been abandoned by many countries.
A negative figure implies output is below potential and a positive that it is above  In the opposite direction, growth could surprise on the upside, requiring monetary policy to be tightened by a little more, a little sooner than in the May conditioning path. For example, if business investment growth were to recover much more strongly than currently projected – perhaps because of improved in sentiment about progress on Brexit – then demand would grow well in excess of supply, pushing inflation above target throughout the forecast in the absence of tighter policy. 19  These scenarios illustrate how guidance, by revealing the MPC’s reaction function, allows people to anticipate how policy will adapt as the circumstances change. The Other Brexit Path Now consider a different Brexit path where the transition isn’t smooth and/or the final outcome is less open than the MPC’s conditioning assumption. The Bank is doing all it can to reduce the risks of the former. We are taking steps to reduce financial stability risks around Brexit, just as we did around the referendum when we engaged in extensive contingency planning with HM Treasury, foreign central banks, and private financial institutions. In particular, the FPC has identified the Brexit “cliff edge” risks and now publishes a quarterly checklist of progress towards their mitigation. Wherever it can, the Bank is reducing Brexit financial stability risks.

To understand the MPC’s potential response, businesses, households and market participants can draw on the Committee’s track record of managing the trade-off that emerged after the referendum, since exactly the same framework would apply. As then, the policy response would reflect the balance of the effects of a sharper Brexit on demand, supply and the exchange rate. Given the exceptional circumstances, the Committee would have to decide whether to extend the period over which inflation is returned to target in order to provide support to jobs and activity. Although the exact policy response cannot be predicted in advance, observers know from our track record that, in exceptional circumstances, we are both willing to tolerate some deviation of inflation from target for a limited period of time and that there are limits to that tolerance. Conclusion In recent years, the UK has faced a series of supply shocks and regime shifts that have created a series of difficult trade-offs for monetary policy. Brexit is the most recent and potentially the most important of these. It will soon be entering a critical phase. The paths that the economy, and monetary policy, could take from here are connected by the expectations of households, businesses and financial markets. Since the referendum was called, these have reacted at different speeds and to varying degrees to the prospects for the UK’s departure from the EU. Financial markets, particularly sterling, moved quickly and sharply.
In the following years the starting point for the monetary programme was the expected development of both real GDP and the inflation rate with the corrections for the envisaged changes in income velocity of money (in the Czech terminology the relevant aggregate M2 consists of currency and demand deposits, time and savings deposits and deposits in foreign currency). To be up-to-date, in 1997 we are targeting the increase of money supply by 8-12 per cent. The philosophy behind money supply targeting is well known. Without a deep reflection upon this theme I recall the message of famous equation of exchange: Total monetary expenditures have to increase proportionally, if the velocity is constant, to nominally expressed GDP. Nothing more and nothing less is required from monetary policy. Monetary policy should serve one goal only: to repress high inflation and provide for a stable currency. As a rule of thumb this reasoning is both understandable and acceptable but a more profound discussion must draw our attention to several points: Neglecting at this moment the different versions of the equation of exchange what can we understand under the heading “total physical volume of transactions” on the right side of this equation? For the economies in transition the difference between the total volume of transactions and transactions counted in national income accounting is important. A part of the transactions is used for intermediate-good or inter-business expenditures and is not counted in the GDP accounts.

A version of the equation of exchange suitable for transforming economies should therefore take into account on the left side not only money in the narrow and broader sense but also estimates of different kinds of quasi-credit. Textbook knowledge says that the constancy, or at least the predictability of velocity either in income or in transaction terms, turns the equation of exchange into the quantity theory of money. At this point, last year’s speaker, Dr Tietmeyer, had again a more favourable position, because he could rely on the predictable and the longer-term change in the income velocity of the German mark. In the Czech Republic the velocity is neither constant nor reliably predictable yet. In the first stage of economic transformation the income velocity declined in line with the increasing transaction demand for money. Only later on did velocity start to stabilise and recently we have observed some increase in velocity. Last but not least, one must point out that, even in the quantity theory applied in advanced market economies, there is a certain “black box” connecting the quantity of money on the one hand and its effect on prices and quantities on the other. Between a change in monetary aggregates and offsetting changes in other variables, there is a transmission mechanism, with its specific features determined by the institutional framework in which it operates.
I confess that I then felt the need to go to the vault and feel with my own hands the gold bars – Romania’s last tangible reserve in those days (in December 1990, gold reserves stood at 68.7 tonnes, amounting to approximately USD 850 million) – for a boost of confidence that the rather complex economic situation might be successfully tackled. It is hard to believe that this really happened, especially now, when Romania’s international reserves amount to approximately 38 billion euros. I will now move on to less amusing memories of those times. The avatars of economic transition rendered difficult the mission of Romania’s central bank. Monetary policy, a fundamental task of the National Bank of Romania, was facing numerous difficulties and constraints, as the process of lowering inflation was often undermined by the need to pursue conflicting macroeconomic objectives or avert a full-blown banking system crisis. This was because Romania’s path towards a functional market economy was anything but smooth. Quite on the contrary, the process often shifted between step-ups and slowdowns, that is when it did not stall altogether. A major feature of the domestic economy’s reform was the priority given, at the onset of the process, to ensuring the country’s social and political stability. In this context, the preferred choice was a gradual strategy, with reforms spread over many years, so as not to spark major social tensions.

Evidently, traditional banking has a series of tried and tested protocols that help fend off or allow for a prompt response to situations of fraud, which are well-suited to the current needs of these population segments. In any event, it is an inescapable fact that, going forward, digital customers will continue to grow in importance. And so too is the emergence of new competitors, known as BigTech and FinTech. Allow me to turn to these now. It is widely known that these new players generally do not try to offer a full range of financial services. Instead they harness the possibilities that new technologies afford to target very specific niches, while steering clear of other activities, such as the business of taking deposits, which entail more stringent regulatory and supervisory requirements. As the report indicates, this can prompt a disintegration of the value chain. We have shifted from a situation in which many users interacted exclusively with a single financial institution to one in which, for example, a user can have an account at a bank, order payments through another provider’s interface and use a third party’s payment instrument. This situation could potentially lead to some banks losing touch with customers, one of the main strengths of their business model, and being relegated to performing back-office tasks that generate scant value. This is detrimental for the bank in two ways: first, the relationship with the customer is weakened and becomes less stable.
6  Jan in’t Veld, Fiscal consolidations and spillovers in the Euro area periphery and core, European Commission Economic Paper 506, October 2013. 7  Dawn Holland and Jonathan Portes, Self Defeating Austerity, National Institute Economic Review No. 222 October 2012. 4  BIS central bankers’ speeches  I could elaborate on the financial dimension of EMU. The Banking Union, when completed, has the potential to move up to the highest level of institutional integration. Similarly, the Juncker Plan is a useful integrated instrument, although too weak and slow at present. I have stressed elsewhere the need for and the benefits of moving ahead with a much stronger “Financing and Investment Union”, incorporating these steps forward and going well beyond the proposed Capital Markets Union. Yet, today I prefer to focus on the fiscal and structural policy dimensions of EMU. In practice, our fiscal framework has been implemented as a fairly weak monitoring framework. Likewise, on the structural front, the MIP (Macroeconomic Imbalance Procedure) is clearly lacking teeth. An institution is clearly missing to develop a mandatory and, hence, full coordination of national policies in the fiscal and structural areas, an idea I will elaborate upon in a few moments. The highly political nature of the debate should not hide the strong economic rationale for such a reform. 15 years ago Peter Kenen 8 argued that a fiscal integration could make currency areas thrive, even though they did not meet all the features of an optimal currency area.

There are differences in economic, lending and asset price cycles, and there are also differences in economic history, crisis experience and institutional arrangements. The developments in recent years have exacerbated these dissimilarities and perhaps even created new ones. It appears to me that the success in combining the positive aspects of diversity and integration in the Nordic-Baltic region may serve as a model for the European Union. If cooperation and coordination has been possible in this region, there is reason to hope for the same in the European Union as a whole. Cooperation between the institutions responsible for financial stability in the region has a history of over 10 years. This cooperation has become considerably closer since the outbreak of the global financial crisis and the reversal of capital flows in our countries. Routine work is done in supervisory colleges, and there are high-level multilateral groups for coordinating macro-prudential supervision and crisis management. It has been very important that trust and open communication as well as mutual support and a willingness to take responsibility have remained in place when the financial stability of a Nordic-Baltic country is really at stake. A shared understanding of the need to deal with macroeconomic and financial stability risks at a national level has provided a solid foundation for Nordic-Baltic cooperation. 2014 will bring new challenges for Europe The year 2014 will bring new challenges.
7  The launch of the new ICO (Official Credit Institute) line of guarantees, recently announced by the Government and worth € billion, will significantly reinforce at a most timely juncture this important instrument for combating the economic effects of the pandemic. Against this backdrop, the findings of the latest Bank Lending Survey anticipate the possibility of a tightening of credit standards for European firms in Q3 this year. Should this be confirmed, prolonged or increased support measures for the financing of firms would be advisable, in order to sustain the recovery. In any event, in this second phase of the economic policy response, credit support mechanisms should focus on prioritising access to these funds for firms with sound viability prospects, with a view to providing for the necessary cross-firm and cross-sector reallocation of productive resources. Likewise, it is admittedly highly likely that a significant number of firms will emerge from this crisis with high debt levels and with diminished demand prospects, at least for some time. In this respect, it is also a pressing concern to review corporate restructuring and insolvency processes, with the aim of establishing pre-emptive, flexible and simplified administrative procedures enabling firms to pursue their business activity while they are still viable. The second decisive contribution of economic policies to alleviating the consequences of the crisis has been the use of furlough arrangements (ERTEs). This has also been a very important instrument for mitigating firms’ liquidity needs.

At this time, it may not be possible to move towards this system as there is not enough political support and many operational hurdles remain to be overcome. Nevertheless, it is important for the IMF to continue its work on how to broaden the use of SDR in all aspects of an international currency (i.e. store of value, medium of exchange and unit of account). Ladies and Gentlemen, 10. In closing, I would like to stress that the international monetary system is certainly in a period of transition. I do not expect a big bang, but a long and gradual process arising from macroeconomic and structural adjustments. Policy dialogue and cooperation between current and prospective reserve-issuing countries will play an important role in ensuring this smooth transition. As there are so many uncertainties along the way, it would take great leadership from some advanced and major emerging market economies to move the world forward towards a more stable international monetary system. Thank you  1  The Triffin dilemma is the conflict between domestic and international objectives of reserve issuing country. This is due to its duty to supply the world with extra currency, which may cause a loss of confidence in its currency. 2  BIS central bankers’ speeches
Indeed, there is no “one size fits all” solution, and individual countries must tailor their approach to their own conditions. Moreover, crises typically evolve in unpredictable ways, and policy must be sufficiently fluid to adjust to changing conditions. Nonetheless, past crises have taught us important lessons applicable to the current situation worldwide. First, it is imperative that bankers and authorities be realistic about the size of the problems they face. While it is often difficult to accurately gauge the scale of problems at the outset of the crisis, history shows that problems usually are much larger than they first appear, and estimates often are subject to frequent and significant upward revision. While pressures to muddle through may, at times, be almost irresistible, policymakers and bankers must realize that the costs of inaction and denial are substantial and that problems left unaddressed grow rapidly over time. Second, it is important to recognize that financial system distress typically encompasses weaknesses in many individual areas, and effective solutions need to be comprehensive BIS Review 64/1998  -3-  and multidimensional. Solutions usually involve complex tensions and trade-offs: improving the condition of the banking sector, for example, may have the effect of worsening the condition of the corporate and household sectors, which may, in turn, negatively affect the banks. Similarly, liquidating problem banking assets may put additional downward pressure on a broader range of asset markets and further exacerbate banking sector problems. However, asset retention more often than not erodes values and freezes market liquidity.

In view of the extent and risks of the current crisis, fiscal policy will need to consider and prepare the deployment of additional stabilisation measures alongside the automatic stabilisers. In addition to the increased focus on economic policy, business practitioners within the Swiss economy are also challenged. In the case of banks, it is essential that credit shortages for companies and private households be avoided. Moreover, interbank business needs to be strengthened in order to smooth out liquidity imbalances. Companies must enhance their innovativeness and use opportunities for opening up new markets. The Swiss economy has many structural strengths and this prompts confidence that Switzerland will overcome the crisis. BIS Review 5/2009  1