samchain/econo-pairs-v1 huggingface dataset:
The benchmark prices of traded goods in the European market will be set in terms of euros, reflecting the fact that this is the currency in which most European producers will have their costs and revenues denominated. So when the pound falls against the euro, producers will tend to raise their prices in sterling terms to maintain euro revenues, creating a positive UK-euro area inflation differential, as we have seen recently. By the same token, the weakness of the euro against the pound in the first half of the last decade created a negative UK-euro area differential with UK inflation running below continental European countries. Chart 6 Euro-Area/UK inflation differential and exchange rate Euro/ sterling  %  0.3  2.0 1.5  0.2  1.0 0.1  0.5 0.0  0  -0.5 -0.1 -0.2  -1.0 Euro-area/UK CPI differential (RHS) *  -1.5  Euro-Sterling exchange rate (LHS) **  -2.0  -0.3  -2.5  -0.4 -3.0 1997 1998 1999 2000 2001 2002 2004 2005 2006 2007 2008 2009 2011  *: Euro-area CPI minus UK CPI. A negative differential implies higher UK inflation. **: Expressed as the deviation from its average over the same period. Source: Thompson Datastream  Chart 6 suggests that this inflation differential can be quite persistent as it takes time for prices to adjust. That is not surprising, as companies know that foreign exchange markets are volatile and so the initial response of prices to an exchange rate change is likely to be relatively small.

A clear parliamentary majority supports the Government long-term strategy for the use of petroleum revenues. At the same time, the Government stresses, with the support of the Storting, that fiscal policy must also be used to stabilise economic developments. The annual budget resolutions will provide an indication of the emphasis placed on this consideration. BIS Review 74/2001  1  The Government was also of the view that there was a need for a clearer anchoring of monetary policy to underpin economic stability. Norges Bank was thus given an operational monetary policy target, which means that the Bank is to use instruments to maintain low and stable inflation. The inflation target is set at 2½ per cent. The inflation target is linked to the annual rate of increase in consumer prices. The monetary policy regulation explicitly refers to factors that the Bank shall in general not take into account, such as the direct effects on consumer prices resulting from changes in interest rates, taxes and excise duties. The regulation further stipulates that Norges Bank shall regularly publish the assessments that form the basis for the implementation of monetary policy. Report no. 29 2001 "Guidelines for economic policy" also states: "Consumer price inflation is expected to remain within an interval of +/-1 percentage point around the target " This must not be misconstrued to mean that the inflation target is an interval. Norges Bank aims at an inflation rate of 2½ per cent two years ahead.
Migratory problems and those arising from unstoppable urbanisation have also become priorities given their implications for economic, social and environmental development. With all these ingredients, the author’s main line of argument in the book is that globalisation, bound up with intense technological changes and the deregulation of economies, has contributed to generating uneven economic growth, a prevalence of the financial over the real economy, a concentration of market power in major corporations (which has stifled competition) and a deterioration in the environment. These are the “excesses” to which the title of the book refers. And, according to Professor Ontiveros, they must be tackled by reformulating the capitalist system and the multilateral governance framework. With this reformulation, Professor Ontiveros suggests governments and public institutions should play a more active role when regulatorily mitigating market failings and oversee compliance with the rules. In his view, that would also serve to ensure the use and efficient, but fair, distribution of resources along with more inclusive and sustainable growth. 2. Some thoughts I would like to delve now into some of these aspects which, admittedly, are essential for preventing the threats so rightly identified by Professor Ontiveros from materialising. We should not forget that the Bretton Woods Agreements, and the principles of universality and cooperation underpinning them, were the multilateral and cooperative response to the unilateral protectionist measures pursued in the 1930s and which exacerbated a situation of severe economic contraction.

Experience of previous financial crises shows that they are usually followed by long periods of weaker growth, higher unemployment and seriously weakened public finances.10 GDP fell in both the United States and the euro area in 2009 and unemployment increased. Inflation fell rapidly, mainly because the earlier increases in the prices of energy and food turned into price decreases. However, there were other parts of the world that were not affected by the crisis to any great extent. Countries such as China and India continued to enjoy high rates of growth. The financial crisis mainly affected Sweden through the fall in the international demand for Swedish exports. GDP fell by 5.9 per cent between 2007 and 2009, but then increased by 5.5 per cent in 2010. Already a year after the downturn had bottomed out, production had returned to more or less the same level as before the crisis. But GDP was still far below the level that a postulated trend increase without the crisis would have led to (see Figure 11). Unemployment peaked at almost 9 per cent at the turn of the year 2009/2010. The increase in unemployment was much less than predicted in the Riksbank’s earlier forecasts and much less than indicated by normal Okun links between GDP growth and unemployment.11 This is probably because the crisis primarily affected the industrial sector with substantial effects on GDP but smaller effects on employment, while activity in other parts of the economy was kept up by expansionary monetary and fiscal policies (see Figure 12).
It should also be developed as our knowledge of the functioning of the financial sector increases. With financial companies operating in several countries, the division of responsibilities among authorities in different countries will become an important issue. In Europe, a process has begun to line up a division of labour between central banks and other authorities as well as between the national central banks and the ECB. For the new structure to be efficient and stable, it is important that the roles and objectives of different actors are well defined. There are risks inherent in this process, however. The new system may prove too bureaucratic, stressing stability at the cost of efficiency. Also, it is important to prevent turf wars from dominating rational discussions about new challenges. Not only is it important that the objectives of central banks are clear. It is also vital that the necessary means are available and can be applied. The advantages of delegating monetary policy to an independent central bank have been analysed fairly extensively in academic research. The main argument for delegation is that politicians can avoid the temptation to use monetary policy for short-term stimulation of output and employment. The collective experience of previous years - and from academic research - is that such stimulation often runs the risk of leading to wage-price spirals, which in the end can have severe implications for welfare in society. A parallel argument can be made concerning policy for financial stability, although it is still a rather unexplored topic in economic literature.

In this context, it should be borne in mind that in the long term, central banks can affect inflation and can have a corresponding impact on the nominal exchange rate, but they cannot affect the real exchange rate in the long run. If the real exchange rate rises because of an increase in the equilibrium real exchange rate and the Central Bank halts the rise in the nominal exchange rate, the real exchange rate will ultimately rise in any case, through larger wage increases and inflation. If the Bank had halted the rise in the exchange rate at all costs, inflation would probably be well above the target already, and it is very unlikely that inflation expectations would be at target. This would also have been inconsistent with the Bank’s legally mandated price stability objective. It would also have been quite costly, as the credibility of monetary policy would have been gone and interest rates in the future would need to be higher in order to restore that credibility. If there is the will to impede the rise in the real exchange rate and mitigate the crowding-out effect that tourism has on other sectors, which is certainly needed, but without sacrificing price stability, it must be done with policy instruments that can have a lasting impact on the real exchange rate, such as tighter fiscal policy.
All of them apply a forward-looking perspective; they produce forecasts and try to adapt interest rates in good time to ensure that inflation will be in line with a target  BIS Review 39/2003  1  that is formulated with varying precision. The ECB now says that inflation should be below, but close to, 2 per cent, which does not differ greatly from our symmetrical 2 per cent target, given the prevailing error margins. In addition, we usually say that we focus on inflation 1-2 years ahead, while the ECB says it applies a medium-term perspective. There is no great difference here, either. When it comes to communication and accountability, the similarities also outweigh the differences now. This is perhaps not so surprising. Greater independence leads to a natural increase in demands for central banks to clearly explain and account for their actions. It is also natural that it should be possible to assess these actions. To this end, those who appoint the Executive Board at the Riksbank and at the ECB have the opportunity to attend important board meetings. Both institutions are also accountable to their respective parliaments. However, there are also a number of differences. For instance, our target is more precise and we regularly publish inflation reports containing forecasts that show how our analysis work develops and changes over time. We also publish separate minutes of our monetary policy discussions. Neither monetary policy theory, nor its practical implication is written in stone. Changes occur over time.

Andrew G Haldane: On microscopes and telescopes Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at the Lorentz centre workshop on socio-economic complexity, Leiden, Netherlands, 27 March 2015. *  *  *  The views are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Thibaud de Barman, Lucy Canham, Chiranjit Chakraborty, Jeremy Franklin, Rashmi Harimohan, John Hill, Bradley Hudd, Ben Kempley, Lu Liu, Katie Low, Anna Jernova, Carsten Jung, Damien Lynch, Yaacov Mutnikas, Tobi Neumann, Paul Robinson and David Ronicle for their assistance in preparing the text. I would also like to thank Stephen Burgess, Oliver Burrows, Pavel Chichkanov, Nicholas Fawcett, Bob Hills, Ronan Hodge, Glenn Hoggarth, Catrin Jones, Vas Madouros and Simon Whitaker for their comments and contributions. Accompanying charts and the table can be found on the Bank of England’s website. At least since the financial crisis, there has been increasing interest in using complexity theory to make sense of the dynamics of economic and financial systems (Newman (2011), Arthur (2014)). Particular attention has focussed on the use of network theory to understand the non-linear behaviour of the financial system in situations of stress (Gai and Kapadia (2011), Haldane and May (2011), Gai, Haldane and Kapadia (2011)). The language of complexity theory – tipping points, feedback, discontinuities, fat tails – has entered the financial and regulatory lexicon.
7 Another early reference, which presents a more theoretical description of the concept is Eckstein (1981)  4 [19]  Some calculations had been published earlier, but from 1978 the Bureau of Labor Statistics (BLS) started regular reporting of monthly figures for the consumer price index and the producer price index that excluded food and energy prices. At the same time, the Bureau of Economic Analysis (BEA) began to publish monthly figures for the consumption deflator (PCE) excluding food and energy prices. 8 Back in the early days of the inflation targeting regime, it was part of the Riksbank's monetary policy strategy not to allow effects assessed as temporary to influence the actual policymaking to any great extent.9 Since then, various ways of measuring underlying inflation have been designed and used in inflation reports, in-depth articles, commentaries and speeches, for instance. Their purpose has been to describe the inflation process and chisel out an assessment of future inflation.10 Various employees at the Riksbank have also written articles of a more theoretical nature on this subject. 11  Two different ways of calculating core inflation Despite the concept of underlying inflation often being used in central bank communication, there is no unequivocal way to describe it. The most common methods can be divided into two main lines. 12 The first involves using different statistical methods to exclude, or dampen, the effect of temporary price changes over time. 13 The second involves excluding predetermined goods and services whose prices usually vary a lot.

For shareholders, this implies not only retention of profits in the bank, but also adding new capital in case of need. Remember that it also represents a more general trend in the banking industry globally, with a number of new forthcoming standards that provide for improving the quality of bank capital and increase of its size. Our banks should gradually begin to adapt to these new standards. For senior managers, strengthening the control systems of the bank activity remains a primary objective, especially for those activities that generate the main revenues and expenses arising from the activity. Risk management structures should be really empowered and have a stronger voice in decision-making. Banks should continue to further improve the efficiency of their operations, including the establishment of a better control over the costs of the activity. Setting priority activities for your institution will allow you to identify new investment needs as well as those activities that use bank resources inefficiently; they should, in turn, be restructured. This process will positively affect the financial performance of the institution, and will allow the implementation of other active policies in areas that benefit the activity of the bank. We all know that banking is an activity based on trust. For this reason, the bank’s services to customers should be “first class” across the entire bank network. This means that customers should be served correctly, timely and transparently.
Joseph S Tracy: Testimony on Housing Finance Reform – essential elements of a government guarantee for mortgage-backed securities Testimony by Mr Joseph S Tracy, Executive Vice President of the Federal Reserve Bank of New York, before the U.S. Senate Committee on Banking, Housing and Urban Affairs, Washington DC, 31 October 2013. *  *  *  Chairman Johnson, Ranking Member Crapo and members of the Committee, thank you for the opportunity to appear before you today. My name is Joe Tracy. I work at the Federal Reserve Bank of New York. Today I will be discussing research1 in the area of government support for housing finance that colleagues and I at the New York Fed have conducted. It is important for me to emphasize that my remarks today, and the conclusions of the research that I will share with you, represent my own views and are not official views of the New York Fed or any other element of the Federal Reserve System. I commend the Committee for focusing on the elements necessary to constitute a robust housing finance system in the United States. By “robust” I mean that such a system must provide for the uninterrupted flow of credit to housing markets even in periods of market stress. In the wake of the financial crisis, significant progress is underway to improve the resiliency of financial markets. Nevertheless, we must plan ahead for the risk of future market stresses.

In my view, the government must determine its exposure net of the loss absorption capacity provided by the private sector. This includes evaluating the counterparty credit risks generated by any risk-sharing transactions. Risk-sharing must require a payment of cash from the private sector and oversight of the capital and overall risk profile of any participants in risk sharing. Of course, the required private capital should be of high quality and should be determined relative to the total risk associated with a given set of mortgage underwriting standards. This may sound complicated, but it is not brain surgery. The government should bear only the cost of extraordinary systemic risks and the private sector must bear losses associated with  1  The Capital Structure and Governance of a Mortgage Securitization Utility, Federal Reserve Bank of New York Staff Report, Number 644, October 2013. BIS central bankers’ speeches  1  the normal business cycle. If this can be arranged, then the largest portion of the overall guarantee fee will be priced by the market and not by the government. An important design decision for a housing finance system is whether the government backstop will apply directly to mortgage-backed securities, their issuers, or some other legal entity. An institution-based program could erode private sector discipline, while a securitybased backstop would pick up the idiosyncratic and cyclical risks that are better left to the private sector.
Economic and financial cycles: five important patterns  The financial crisis in 2007–08 has induced a change in the hierarchy of central bank goals. The concern of central banks for business cycles and economic growth has moved far beyond the extent to which those did, or did not, generate inflationary (or deflationary) pressures. Price stability has proven insufficient to deliver financial stability and the lack of  1  Haldane, A. (2015): How low can you go? – speech given at the Portadown Chamber of Commerce, Northern Ireland, 18 September 2015 (http://www.bankofengland.co.uk/publications/Pages/speeches/2015/840.aspx). BIS central bankers’ speeches  1  the latter has once again disclosed the overwhelming economic and social costs generated by the episodes of financial instability 2. This has altered our view of financial stability issues, inaugurated the notion of systemic risks, and subsequently led to the broadening of our policy mandate. The establishment of the dual mandate for central banks implied that the traditional monetary policy function was “supplemented” by macroprudential policy as a response to the interplay of financial cycles and systemic risk. The broadening of the central bank mandate and the need to add new measures and instruments to the policy toolkit have opened several avenues for central banks to expand on their knowledge. We need to re-examine the phenomena of regular disturbances, or cyclical processes taking place with different frequencies, as well as their inherent structures.

Losses were low on loans to the household sector compared with loans to the enterprise sector during the banking crisis at the end of the 1980s and beginning of the 1990s. Despite high real interest rates and a decline in income, households were largely able to service their debt. High interest expenses and a decline in income, however, led to a reduction in household consumption. This led subsequently to lower turnover in the enterprise sector and weakened profitability and debt-servicing capacity. In this way, households contributed to an increase in banks’ losses on loans to the enterprise sector. The higher the household debt burden is, the stronger the spillover effect can be from households to enterprises. 4. The stability of the financial system  Given the current picture, a sharp increase in bank losses is not likely in the near future. This is also the assessment of the IMF, which recently evaluated the Norwegian financial system. The IMF concluded that the Norwegian financial system is solid and well managed, and that short-term vulnerabilities are low. Even with a strong negative shock to the economy, losses are expected to be far lower than during the banking crisis. This is probably because of the increase in the share of loans to households, for which losses are normally not very high, and because enterprises are now in a far stronger financial position than they were at the end of the 1980s and beginning of the 1990s.
9 Global systemically important banks. 10 Constâncio, V. (2016), “Margins and haircuts as a macroprudential tool”, remarks at the “ESRB international  conference on the macroprudential use of margins and haircuts”, Frankfurt am Main, 6 June 2016; Constâncio, V. (2017), “The future of finance and the outlook for regulation”, remarks at the “Financial Regulatory Outlook Conference”, Rome 9 November 2017. 11 ESRB (2017), “Sovereign bond-backed securities”, ESRB High-Level Task Force on Safe Assets; for the original  proposal referring to ESBies see Brunnermeier, M., L. Garicano, M. Pagano, R. Reis, T. Santos, D. Thesmar, S. Nieuwerburg and D. Vayanos (2011), “European Safe Bonds”, The Euronomics Group. 12 Monti, M. (2010), “A New Strategy for the Single Market”, report to the President of the European Commission,  José Manuel Barroso, May 2010. 13 For a good analysis of these and other proposals see Leandro A. and J. Zettelmeyer (2018), “The search for a  Euro area safe asset”, Peterson Institute for International Economics Working Paper 18–3. 14 van Ark, B., M. O’Mahoney and M. Timmer, (2008), “The Productivity Gap between Europe and the United States:  Trends and Causes”, Journal of Economic Perspectives 22:25–44. 15 Fernald, J. (2015), “Productivity and Potential Output Before, During, and After the Great Recession”, NBER  Macroeconomics Annual 29:1–51. 16 Mokyr, J. (2014), “Secular Stagnation? Not in Your Life”, Geneva Report on the World Economy, pp. 83–89.

Still other tasks have been added on, such as capital controls surveillance and the recovery of claims that reverted to the Bank after the crash. The Central Bank has gained strength as an institution in recent years, as it has grappled with older projects and newer challenges. In order to deal with them successfully, it has been necessary to expand our staff, but nowhere near as much as one might expect or as much as might have been done in other countries. We have been able to contain our staff levels because we have an exceptional team of highly qualified employees. If the Central Bank is to succeed in its role of safeguarding monetary and financial stability, it is of key importance in the changes that may lie ahead for the Bank that it remain professionally strong and productive. A competent and dedicated staff is vital in this regard. I wish to thank the Bank’s employees for their excellent work in recent years. Honoured guests: In closing, I would like to thank the Central Bank’s many collaborators for a successful cooperative relationship over the past year. First among them are the Financial Supervisory Authority and the ministries with which the Bank works most closely – in particular, the Ministry of Finance and Economic Affairs, which now administers the affairs of the Central Bank on behalf of the Government. I would also like to thank the financial institutions with which the Bank interacts for their cooperation.