samchain/econo-pairs-v1 huggingface dataset:
Clearly, the demand for labor is very strong—we hear that from employers who are finding it hard to fill all their openings—and a lot of people are getting hired. At the same time, the numerous people leaving their current jobs contribute to the recordhigh level of postings as employers look to fill newly vacant positions. We won’t see all the vacancies filled overnight—it takes time for employers to fill open positions. With the strong, sustained demand for workers and progress on hiring, I am confident that we will see continued strong job gains going forward. The last aspect of the outlook that I’ll speak about is inflation. Recent inflation data have moved up sharply, which has garnered a great deal of attention. My view is that the spike in inflation mostly reflects the temporary effects of the surprisingly rapid opening of the economy. Given the importance of this issue, I will explain my thinking in more detail. With the economy reopening, people are once again enjoying activities, such as travel, that they postponed during the worst days of the pandemic. With the return of these activities, prices for things like airfares and hotel rooms have rebounded. But we must keep in mind that many of these increases are simply reversals of the large declines we saw last year when the pandemic first took hold. Once these prices have fully adjusted to the reopened economy, they shouldn’t continue to increase at recent elevated rates, and their effect on overall inflation should subside.

John C Williams: Good day sunshine Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Midsize Bank Coalition of America, 21 June 2021. * * * Hello, everyone. It’s a pleasure to speak with you today. The summer solstice was yesterday evening, making today one of the longest days of the year. But please rest assured that I won’t take advantage of that and go on for too long. That way, there will be plenty of time for me to answer your questions. The good thing about virtual meetings like this one is that I get to speak with people from across the country with the click of a button. But I also know that there is nothing more heartwarming than when families and friends are finally able to get back together in person after all this time. Indeed, we are starting to see “the smiles returning to the faces,” and I mean that now quite literally. Today I’m going to talk about three things: first, I’ll briefly discuss the transition away from the London Interbank Offered Rate (LIBOR), a topic of particular relevance to this audience; second, I’ll talk about the outlook for the economy and where we are in the recovery; and finally, what that means for monetary policy.
Germany has nothing like the same skew, with the cartogram and map little different.10 A key focus of work among economic geographers is the importance of agglomeration effects – that is, increasing returns to economic scale at the spatial level.11 If those effects are powerful, and if workers are one of their most important sources, we would expect cartograms to have similar properties when looked at by population, income (per head) and wealth (per household). More should not only be merrier but wealthier. 6  For example, Case and Deaton (2017). For example, Viscek, Shlesinger and Matsushita (1994). McCann (2016), Centre for Cities (2019), What Works Centre for Local Economic Growth (2018). 9 See Dougenik, Chrisman and Niemeyer (1985). 10 Put differently, the correlation between geographic area size and population in the UK is in fact slightly negative (-0.05) while it is relatively high and positive (0.7) in Germany. 11 Viladecans-Marsal (2004) and Rosenthal and Strange (2003), example. 7 8  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Chart 1a: Map (LHS) and cartogram (RHS) of population in the UK  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Chart 1b: Map (LHS) and cartogram (RHS) of population in Germany  Sources: Eurostat and Bank calculations. Notes: Charts show population in 2018 for NUTS 1 regions. Cartograms resized by population. As Charts 2 and 3 show, broadly-speaking that is the case. The income per head cartogram suggests a shrunken North and a swollen South.

The gains are shared between owners and workers. Real wage growth in Norway has been considerably higher than productivity growth. But the economic picture for Norway may be changing. We cannot assume that Norway’s terms of trade will continue to improve. Investment in the petroleum sector is levelling off. Output growth in the mainland economy has slackened. When activity in the petroleum sector eventually declines, there will also be a need for economic restructuring in Norway. The business sector will have to seek new markets, where competition may be intense. Restructuring may prove particularly demanding given Norway’s high cost level. Although restructuring will be a gradual process and may lie some years ahead, Norway may find that sustaining growth and keeping unemployment low in the coming years may become a challenge more on a par with that facing other economies today. The economic policy framework matters. Fiscal policy follows the fiscal rule, which aims to ensure a sustainable level of petroleum revenue spending over the long term. In the event of  2  BIS central bankers’ speeches  major aggregate demand shocks, fiscal policy, in line with the fiscal rule, can be used to alleviate the situation in the short term, as evidenced during the recent financial crisis. But an imbalance arising from a cost level that is too high and weak competitiveness cannot in the long term be addressed by means of an expansionary fiscal policy. This approach could, on the contrary, amplify the problem by crowding out businesses.
The theme of this Conference, Building resilience in uncertain times: safeguarding financial stability, encouraging investments, is particularly timely. Today we are going to debate a number of challenges that our countries are currently facing: from the role of central banks in the current uncertain environment to the reforms needed to improve the business climate in the region, as well as the impact of digital finance on financial and economic integration and the role of sustainable infrastructure and connectivity in fostering regional value chains. Allow me to take advantage of chairing the first session of this conference that focuses on the impact of digital finance on the economic and financial outlook to briefly reflect on what are, in my view, some of the key challenges our respective institutions face as a result of the profound and relentless process of digital transformation that the global financial system is currently engaged in. This is certainly a topic that has gained much attention in both policy and academic circles, thus giving rise to a significant amount of research that touches upon the causes and factors underlying the changing landscape, including the extent to which the pandemic has contributed to accelerating this phenomenon.1  1  For example, according to a McKinsey & Company study, due to Covid-19, businesses’ digital offerings leapfrogged about seven years in a matter of months during 2020. In their view, this trend is likely to continue in the near future albeit at a slower pace. This study is available at: https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/ourinsights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever.

The US  2  BIS central bankers’ speeches  economy was in many senses the epicentre of the financial crisis. There are a number of problems that need to be dealt with. First, many households in the United States have fallen into difficulties because their debts exceed the value of their homes. The households have therefore needed to increase their saving, which they have done. As a result, private consumption has grown slowly for some time but does have the potential to recover in the period ahead. Second, public finances are weak in the United States too (see Figure 9). The situation became more dramatic in the summer when the country’s credit rating was reduced. The political deadlock in the US Congress was one of the main reasons for this. A major advantage in the United States is that, so far, government bond rates have remained very low (see Figure 2). However, it is important that these problems are resolved so that this positive trend can continue and so that interest rates do not begin rising as they have done in several countries in southern Europe. There are, however, a number of bright spots with regard to the US economy. One is that the companies are making good profits. We have to go all the way back to the early 1950s to find as high a level of profits in relation to GDP as there is now. When confidence returns there is therefore every chance that investment and employment will recover.
Moreover, our assessment was that fiscal policy in the United States and the euro area would probably need to be tightened much more than in Sweden, which meant that these areas would need to hold their interest rates lower. Another reason for beginning to raise interest rates was to clearly mark that interest rates will in the long run be much higher than they are now. Otherwise there is a risk that companies and households will base their economic decisions on too-low long-term interest rate expectations, which can lead to unsustainably-high loans and distorted investment decisions. This can in turn entail negative effects on production and employment. Unrealistic expectations of interest rates The low interest rate we have had over the past year has probably held back expectations of interest rates in the longer run, too. According to Prospera’s surveys, expectations of the repo rate five years ahead have fallen by around one percentage point since we began making large cuts in the repo rate in autumn 2008. (Figure: Repo rate and expected repo rate). Market expectations in June were well below the interest rate path, and the gap was also unusually large. This implies that monetary policy was in practice much more expansionary than we had intended. (Figure: Monetary policy expectations). The National Institute of Economic Research’s surveys of expectations of variable mortgage rates moreover implied that households were expecting relatively low interest rates in the longer run. In June, households were expecting a variable mortgage rate of 4.3 per cent in five years.

Svante Öberg: The current economic situation Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at Swedbank, Stockholm, 20 August 2010. *  *  *  In this presentation I shall begin with an account of the Riksbank’s assessment of the economic situation abroad. I shall then discuss our assessment of economic developments in Sweden. These are the assessments we made at the monetary policy meeting on 30 June and published in our Monetary Policy Report on 1 July this year. I will also comment on new information received during the summer, but I will not make any new overall assessment of economic developments. We members of the Executive Board will not do this until the next monetary policy meeting, which will be held on 1 September. Finally, I shall report how the majority of Executive Board members and I personally viewed monetary policy at the end of June. My presentation of the current economic situation can be briefly summarised in three points:   The Swedish economy is developing strongly after the deep recession we have experienced. Inflationary pressures are currently low, but inflation is expected to rise as resource utilisation increases.   At the most recent monetary policy meeting in June the members of the Executive Board decided to raise the repo rate to 0.50 per cent, and assessed that it would thereafter need to continue to rise towards more normal levels. The earlier extensive lending to the banks is being phased out.
On the one hand, if the equity cushion proves to be too thin, the system might well fall over. On the other hand, if banks are forced to hold too much equity, there is a risk of choking off the truly valuable liquidity services that deposit-taking banks provide to the economy. Looking ahead, this analysis points to the general shape of a richer regulatory Capital Accord for the future – one that distinguishes more carefully between the different phases of a bank’s life and death. Regulatory intervention is plainly required to set a minimum level of equity to provide sufficient going-concern loss absorbency. That is the core purpose of the existing Basel 3 Accord. But it is not enough. We also need to regulate for a minimum level of term bonded debt to provide gone-concern loss absorbency.11 In effect, in return for the private cost saving due to the tax regime, the authorities would be mandating term bond issuance of a minimum quantity from prescribed parts of banking groups in order to make resolution feasible. Contrary to some of the academic literature, this gives value not to short-term debt on the basis that it can run and so acts as a disciplining mechanism, but rather to longer-term bonds. They can absorb losses, helping to recapitalise the firm in resolution; and can thus be a source of market discipline through price and rationing.12 That might be enough.

Resolution regimes: rolling back the implicit subsidy from the state The most fundamental effects prospectively flow from making orderly resolution credible for the largest and most complex firms. Funding costs for any banks where bailout was STILL confidently expected would be heavily subsidised, as in the past. Where there was uncertainty, there would tend to be somewhat subsidised funding combined with a bias to shorter-term financing which could run at signs of trouble. But such “regimes”, if they merit that description, are unsustainable. Policy is clear: taxpayers should not provide solvency support to banks. Instead, losses exceeding a bank’s equity base should fall on bondholders and other uninsured creditors, in line with the creditor hierarchy that would apply in bankruptcy.1 Other things being equal, exposing the holders of bank bonds to risk will tend to increase the overall cost of finance for banks during normal times compared with the past. Earning a fixed return but exposed to downside risk, investors in, especially, longer-term debt will be a source of market discipline. That is likely to incentivise banks to be better capitalised than in the past – through some combination of less levered balance sheets and less risky business activities. For society at large, the counterpart is that, with a lower probability of failure and credible plans in place to resolve banks without recourse to public funds, government bond yields should be lower than otherwise and the public finances more resilient.
This is not a reference to a 70s rock band – we do have some rockers in the PRA but they seem mainly to be Status Quo fans. It’s also not a homage to the song by Prince or the London radio station. Still less is it a breach by the PRA of social distancing guidelines. Rather, Lord Mayor, instead of “keep it simple, stupid”, in the PRA we say: keep it strong and simple! 9 See for example: https://www.osfi-bsif.gc.ca/Eng/fi-if/in-ai/Pages/SMSB20_cp.aspx#fnb19 10 Community banks meeting a 9% leverage ratio criterion can opt into a different regime. 11 See for example: https://www.federalreserve.gov/aboutthefed/boardmeetings/files/tailoring-rule-visual-20191010.pdf 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  Figure 1A: Predicting distress by setting regulatory thresholds To help us understand the need for a tailored approach for smaller banks and building societies, we’ve been testing how well some of the metrics in our current regime would have performed if we’d used them to identify vulnerable banks in 2007. We’ve done this by applying to historical data about banks’ leverage ratios, risk-weighted capital ratios, and net stable funding ratios, a technique used in existing Bank research.12 What we’re looking for is combinations of these balance sheet ratios which help us separate banks which got into trouble during the succeeding crisis from those which didn’t. Good combinations produce high hit rates and low false alarm rates. Our findings suggest that these metrics are not as well-suited to identifying small banks that are headed for trouble. Source: Bank of England and Bank calculations.

BIS Review 146/2008  3  To name just a few developments in the past 12 months: a new Dow Jones Islamic Market Index was launched to track China-related equities listed on the Hong Kong Stock Exchange; Islamic mutual funds were introduced by a local bank and an asset management company featuring China-related equity investments through the stock market platform in Hong Kong; and an exchangeable sukuk linked to the shares of a Mainland company listed in Hong Kong was issued in March, enabling investors to gain exposure to China’s growth story. The response so far has been highly encouraging: for example, the sukuk was 10 times oversubscribed. Likewise, positive progress is achieved in the development of Islamic banking in Hong Kong. Following the first Islamic banking window introduced three months ago, I’m glad to witness yet another market player who is set to launch its Islamic banking window in Hong Kong at this auspicious occasion today. The increasing number of banks taking part in Islamic banking activities will add further momentum to the development of an Islamic capital market in Hong Kong by providing an important tool for funding and liquidity management. The Hong Kong Monetary Authority will continue to give full support to the HKSAR government in its initiative to develop Islamic finance in Hong Kong by acting as a market enabler and infrastructure provider. The HKMA has taken important steps and devoted considerable resources to promote the industry in Hong Kong.
Let us begin by looking at the data and seeing how inflation has developed since the target was introduced. As you probably know, the target was announced in January 1993, but began to apply officially to the annual increase in the CPI with effect from 1995.1 To obtain an inflation series that better corresponds to the one the Riksbank had access to when making its repo-rate decisions, one has to take into account the fact that the calculation method for the CPI was changed in 2005. Inflation has varied substantially during the period, both overshooting and undershooting the target, but it has been 1.4 per cent on average during the period January 1995 to December 2012, that is six tenths of a percentage point lower than the inflation target of 2 per cent. Some critics seem to assume that this is all the information one needs to assess monetary policy. They argue that each tenth of a per cent below the target has entailed major costs to the real economy, and this is enough to draw the conclusion that monetary policy has not been able to deliver what it should. Do not forget how things were in the 1970s and 1980s! My view is that one must look at the development of inflation in the right perspective and remember how things were before the target was introduced. Let us compare inflation and economic developments in general during the twenty years the inflation target has been in place with the twenty years prior to its introduction.

Sørensen, Peter Birch (2013), The Swedish Housing Market: Trends and Risks. Report to the Fiscal Policy Council (Finanspolitiska rådet) 2013/5. Woodford, Michael (2012), Inflation Targeting and Financial Stability, Sveriges Riksbank Economic Review, 2012:1. Sveriges Riksbank. 14  BIS central bankers’ speeches  Figure 1. CPI Annual percentage change 16  16  14  14  CPI Mean  12  12  10  10  8  8  1995Mean 1.3 Sd 1.2  6  6  1971-1992 Mean 8.3 Sd 3.0  4  4  2  2  0  0  -2  -2 70  75  80  85  90  95  00  05  10  Note: CPI inflation does not refer to real-time data, but is calculated using the current method. The average for the period from 1995 is therefore one tenth of a percentage point lower than with real-time data. Sources: Statistics Sweden and the Riksbank Figure 2. Actual and expected inflation Per cent 5  Inflation expectations  5  CPI  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 94  96  98  00  02  04  06  08  10  12  14  16  18  Note: Inflation refers to CPI.
Malaysia has trading and investment relations with many nations. We therefore, cannot look at movements of any particular currency pair as a basis for determining the appropriate valuation of the ringgit. A longer-term perspective to exchange rate policy is taken, looking at the relationship between the exchange rate and economic fundamentals. Of greater importance is to focus on enhancing our overall productivity and competitiveness against all our major trading partners. The pegged exchange rate has served Malaysia well. It continues to serve Malaysia well. This is manifested in terms of the significant growth in the volume of trade and the steady inflow of foreign direct investment. In trade-weighted terms, the exchange rate is not misaligned. Since the ringgit peg to the US Dollar, the ringgit real effective exchange rate (REER), which is the trade weighted value of the ringgit against our major trading partners’ currencies after taking into account changes in our inflation relative to those of our trading partners, has fluctuated within a range of plus or minus 7%. This is well within an acceptable range. More importantly, the ringgit REER has not experienced a sustained trend towards increasing appreciation or depreciation. The ringgit has essentially gravitated around its fair value and has not experienced misalignment. Finally, the Malaysian economy has both external balance in the form of a sustainable current account and internal balance in the form of price stability. This again supports the ringgit being fairly valued.

The education and training sector will play a critical role both in developing entrepreneurial mindsets and in equipping future entrepreneurs with the skills necessary to successfully position new enterprises and manage their development and growth. Ladies and Gentlemen, it is a fact that a thriving entrepreneurial culture has the potential to make a substantial contribution to our economic and social development and to achieving a balanced economic growth. The key therefore, is for businesses to be innovative and competitive at all times. To achieve this we need to develop outstanding young men and women who can be leaders in their fields and who are ambitious with a mindset to be successful and to compete at the highest level. Mr Chairman, I have no doubt that awards like yours can be hugely influential in fuelling the entrepreneurial urge and in inspiring youths to emulate the achievements of those whose enterprising dreams will be rewarded this evening. The award will also be key in raising public awareness on the need for continuous innovation among our youths. As you are aware, the engine of the fast growing economies such as China and India is the innovation and creativity of the young entrepreneurs in those economies. It is incumbent upon us therefore to also encourage our youths to take up their rightful place and contribute to the country’s development.