samchain/econo-pairs-v1 huggingface dataset:
This also applies to the temporarily restricted autonomy and flexibility when a central bank must act resolutely in certain situations to maintain confidence in the inflation target. So far, it is my assessment that this is something transitory. Different theories behind the weak recovery from the financial crisis One notable theory for the reasons behind the low interest rates and the sluggish recovery from the financial crisis is the hypothesis of secular stagnation advanced by Summers (2013). The concept here is that a chronic surplus of saving has arisen in the world for various reasons, and that this has pushed the interest rate down. The problem, however, is that not even the current low level of interest rates creates a balance between supply and demand. The result of this is the risk that many countries will become stuck in a situation with too low aggregate demand, resource utilisation below normal and inflation that tends to be much too low. Rogoff (2015) instead argues that growth is being restrained by the world being in an adjustment phase of an unusually large debt cycle, a “debt supercycle”. Even if the level of interest rates is unusually low, this needs not mean that countries are stuck in a situation of chronic demand deficit. Demand and growth will start to pick up when the debt situation again normalises. Unlike a case of secular stagnation, which can be regarded as a structural phenomenon, the problems are thus assumed to be of a basically cyclical, albeit long-term, nature.

It can be imagined that inflation (the red curve) must lie within the interval marked by the broken blue lines in Figure 3 if inflation expectations are not to drift away. This interval thus depends on the agents’ expectations and is not something that can be observed. If inflation lies below the interval, expectations will fall, sooner or later, and will pull actual inflation down too, as illustrated in Figure 4. If the central banks now have fewer possibilities to bring inflation back to the target as quickly as before, they must find ways to “extend” the interval, as in Figure 5. 12  See, for example, Blanchard et al. (2010), Ball (2014) and Krugman (2014). In the review of the monetary policy framework which the Bank of Canada publishes every five years, for example, an increase in the target is one of the areas to be examined – see Côté (2014) and Kryvtsov and Mendes (2015). 13  For arguments against raising the inflation target, see, for example, Yellen (2015), footnote 14. BIS central bankers’ speeches  9  This will probably be a fairly serious challenge. It will not just be a matter of trying to convince economic agents that monetary policy needs to be more “flexible”.
Therefore, it is an opportune time that the boards and senior management of the financial service fraternity in Malaysia to begin to actively explore pragmatic approaches to assimilate IP into existing financing considerations. An important starting point is building a stronger knowledge base of IP issues within financial institutions. This includes identifying staff within your institutions to learn about these issues and providing them with local and international opportunities for training or exposure in IP. The industry, working together with relevant authorities, agencies and trade associations, should also come together to agree on specific initiatives to overcome barriers to the more effective use of IP assets in financing considerations. This includes developing practical guidance for both businesses and financial institutions in identifying, managing and valuing IP assets, and a way to include such assets within an institution’s existing credit assessment procedures. Such initiatives should also address the need for a clear and unambiguous legal documentation for a legal charge over IP. This promotes a cost effective and consistent approach in perfecting legal rights across the industry. In addition, processes to facilitate the continuous assessment and reporting of IP assets of borrower firms will also promote transparency on the performance of the assets and provide early signals of potential distress. Through such efforts, IP can be further developed as an individual asset class that supports lending decisions.

This is quite surprising when one considers that way back in the 1880s, IP was first used as collateral to secure funding by Thomas Edison with the incandescent electric light bulb. It was ground-breaking. It was a feat ahead of its time. IP is an ownership over an innovation. Innovation reflects an investment in a knowledge assets with an opportunity to make profits. Thus, understanding IP makes good business sense and offer fund providers a good opportunity for business growth and opportunities. Greater recognition of IP as a relevant factor in financing decisions is therefore a proven concept. Different financial players harness the potential of IP in different ways. The varying business models and risk appetites within the financing ecosystem will determine how IP fits BIS central bankers’ speeches  1  into financing considerations. For example, banks have to prioritise depositors’ interests and would not be expected to finance ventures with high risks. However, this is not true in all cases. SMEs with proven track records should be within banks’ sights, in such cases the value-add of IP should be more effectively leveraged. Indeed, in other emerging economies, progress has been evident. The Thai SME Bank, Chinese Bank of Communications and the Federal Development Bank of Brazil already take IP into consideration for financing. Malaysia’s financial services industry should also take this opportunity created by this new growth industry.
In a period of increased cross-border labour flows, substantial technological advances, changes in competitive conditions and new trading patterns, we may, with our very open economy, have to accept a somewhat greater variation in inflation and deviations from the target, as we have witnessed over the past two to three years. Even though economic growth has been strong over the past 15 years, economic cycles have varied. A clear upturn in the years from 1993 to 1998 was followed by a period of more moderate growth and  3  Interview in Adresseavisen, 27 December 1980. 4  Based on an analysis conducted by Norges Bank of price indices for more than 130 different groups of goods and services for the period 1980-2005. 5  Alan Greenspan: Testimony before the Committee on Banking, Finance and Urban Affairs, U.S. Senate, July 13, 1988. BIS Review 10/2006  3  a mild downturn in 2002 and into 2003. Since summer 2003, the Norwegian economy has again experienced a marked upturn. Wage developments reflect and influence business cycles. Strong employment growth in the 1990s resulted in a rise in labour costs, which in turn had a dampening impact on growth. Moderate wage growth in recent years is being accompanied by a strong cyclical upturn. The Norwegian economy has continued to exhibit high growth this year. Low interest rates, higher petroleum investment and strong global growth have been the most important driving forces.

The Government Pension Fund has a prudent investment strategy, with broad risk diversification, and a real return of 4 per cent is expected in the long term. There are examples of companies and investors that achieve a considerably higher return on capital over time. However, it is important to remember that for each successful investor earning high returns, there are many others with the same ambition and risk willingness, but with a record of poorer performance and bankruptcies. The Government Pension Fund cannot run the risk of ending up among the worst performers. The globalisation of financial markets provides the Fund with good opportunities for investing and diversifying risk. However, we cannot insulate the Fund from wide annual swings in the value of the  12  Most of the central government’s cash flow from the sale of oil and gas is derived from the extraction of wealth under the seabed (economic rent), while the remainder is a normal return on invested capital. 8  BIS Review 10/2006  investments. We invest in international equity markets where prices fluctuate widely. These fluctuations are the reason why equity investments generate a higher return over time. The best year in the Fund’s history so far was 2003, when it posted a real return of 11 per cent. This stood in sharp contrast to the previous year’s result, which was -6 per cent.
Ravi Menon: Singapore’s approach to the regulation of capital markets Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Thomson Reuters 2nd Pan-Asian Regulatory Summit, Singapore, 28 September 2011. *  *  *  What do capital markets do? Distinguished guests, ladies and gentlemen, good morning. And to all our guests from abroad, welcome to Singapore. Two thousand years ago, in ancient Rome, enterprises contracted with the government to build temples and collect taxes. The enterprises funded these ventures by selling ownership or equity stakes in the form of shares which were readily transferable among the Romans. Later, the Italian city states sourced for funds from their citizens in the form of bonds to finance wars, while merchants sought financing from individuals to procure better vessels for sailing over ever increasing distances. Over time, a market developed to enable holders of bonds and equities to sell their holdings to other interested buyers. Thus was born – what we now call – capital markets. Since those early days in Imperial Rome, capital markets have spread far and wide across the globe. But the fundamental function of capital markets has remained unchanged – to allocate capital to those who need it and transfer risk to those who are able to bear it.

Zdeněk Tůma: Education as investment in human capital Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, for the graduation ceremony, The New Anglo-American College, Prague, 20 June 2008. *  *  *  Ladies and gentlemen, dear colleagues, It is my pleasure to be here today and to share with you some thoughts that concern the role of education as an investment in human capital in the long-term development of our economy and society in general. Today it’s commonplace for politicians to swear by concepts like investment in education, knowledge-based economy or the effect of education on long-term economic growth. They are also quick to add something about the necessity to pay for university education, at least those on the right wing of the political spectrum. Don’t worry, we haven’t met today to assess individual political ideas, and we all know that sometimes it’s a long road from what politicians say to what they do. However, the fact that you are sitting here today indicates that viewing education as an investment has its place in today’s society regardless of political preferences. I would like to use this opportunity to point out that although the concept of investment in education may be somewhat misused and can have unfortunate overtones for somebody, it has a rigorous theoretical foundation and is of high empirical relevance.
The real-estate sector is adjusting after being very dynamic in 2015. New house sales in Santiago fell sharply in the first quarter of 2016, largely due to advanced purchases last year (figure 13). A substantial part of the sales of last year were accounted for by promised purchases of unfinished units, scheduled for delivery mainly this and next year. In this sense, one risk for real-estate companies stems from such promises not being honored if the economic outlook worsens. Finally, the vacancy rate in the office-space sector is around 10 percent, while rental prices showed a slight reduction at the end of 2015. In this context, the new house price index for Santiago as estimated by the Chilean Chamber of Construction rose 6.8 percent in real annual terms in the first quarter of 2016, slightly less than the 7.2 percent it showed in the third quarter of 2015. Meanwhile, in the third quarter of last year, the house price index for both new and used units calculated at the Bank rose by 9.4 and 9.7 percent in real terms nationwide and in the Santiago Metropolitan Region, respectively (figure 14). About households, aggregate borrowing – the debt to income ratio, RDI – continues to rise, in a context of weaker output and employment. The RDI reached 63 percent at the close of 2015, largely explained by an increased share of mortgage debt, which continues to expand at a real annual rate of nearly 10 percent.

Longer maturities have smoothed the growth of borrowers' debt burden in terms of monthly payments of a mortgage. Of course, looking at total loan servicing costs, the overall debt burden has increased. When we compare Estonia and other Baltic countries with more developed economies, there is obviously room for further credit growth: total bank credit as a percentage of GDP in 2004 was over 100 percent in the euro area, around 60 percent in Estonia, and only 20 percent in Lithuania. And although it is rapidly increasing, the debt burden of Estonian households, at 32 percent of GDP by end-2005, was still about two times lower than in the Nordic countries. Secondly, the increase in incomes enables people to upgrade their living conditions. For example, the number of square meters per capita in Estonia (at around 30) is relatively small compared to Sweden  2  BIS Review 81/2006  (45) or Denmark (50). Moreover, older housing stock needs quality improvements. Both these factors may indicate that real estate markets may continue to perform reasonably well over the medium term, even if some slowdown might be ahead. Indeed, the relative contribution of Estonia's construction sector to GDP is hardly exceptional if compared to many other EU countries. Are risk premia sufficient? However, this rapid growth poses important questions of sustainability and stability, especially in countries with shorter borrowing experience.
The intuition we think is that the lowest value note should be sorted most often, and the highest value note least often. The reason for this order is that the lowest value note will be nearest to a pure transactional instrument, and the highest value note nearest to a pure store of  BIS Review 162/2009  7  value instrument. As the chart indicates, the intuition holds for all denominations except the £ On average, at £ note passes through a cash centre for sorting nine times a year, a £ four and a half times, and a £ just under once a year. But the £ has seen a decline from five times a year in the mid-1990s to one and a half times a year now. This goes a long way to explain the problem we have with the £ We need to see more dispensed so that they are less scarce and therefore they return to cash centres for sorting more often. In the last few years we have had some success in increasing the total number of £ in circulation. The overall value of £ in circulation had been stuck at around £ since the early 1990s. In the last two years it has risen to £ But the evidence from turnover indicates that we have a lot more to do. Recently, we have therefore run two pilot schemes.

Let me say at the outset that my very clear objective in terms of Bank of England notes is to maintain the integrity of our banknotes, and an important part of that is meeting the public demand. I am not trying to promote or kill our notes. The trends in banknote circulation and use I am going to talk about trends in banknote circulation in the context of the roles of money, as a medium of exchange (payments) and a store of value. Chart 1 illustrates the pattern of the total value of Bank of England notes in circulation over the last forty years. The striking thing is the acceleration of growth over the last fifteen years. This may come as something of a surprise to the “cash is dead” lobby. This chart suggests that nothing could be further from the truth. The total value of our circulation was around £ in the mid 1990s, while today it is around £ As the chart also shows, this increase can for the most part be attributed to one denomination, the £ note. BIS Review 162/2009  1  But it is important to put this increase in notes in circulation into context. Chart 2 does this by plotting the value of notes in circulation as a share of the nominal GDP of the UK, again over the last forty years.
Moreover, the effect of an interest rate change will depend on whether the change is anticipated or comes as a surprise. For example, a lower-than-expected interest rate increase might easily be perceived as an expansionary monetary stance, even though the rate is actually being raised. Expectations may also result in a change in market interest rates well in advance of an actual adjustment in the key policy rate. This may influence how quickly an interest rate change feeds through to the economy. Furthermore, the impact will depend on the expected duration of the interest rate change. If the Bank were to embark on a totally new monetary policy course, we would have to assume that this would result in a different path for the economy than if an interest rate hike occurs one month earlier than planned. Chart: VAR model  5  Unemployment measured according to LFS. 6  Mainland hourly wage growth from quarterly national accounts. 7  Adjusted for tax changes and excluding energy products, seasonally adjusted figures. 4  BIS central bankers’ speeches  In order to analyse the effects of the interest rate, we need to study more than pure correlations. We need an analytical apparatus that allows the interest rate to be endogenous. A vector autoregressive model (VAR) model on Norwegian data quantifies how the interest rate has reacted historically to other key economic variables. The model is based on statistical relationships between GDP, interest rates, exchange rates and inflation, taking into account that variables may be interdependent.

Chart: Isolated effect on GDP of an interest rate increase in two different VAR models In order to further explore the extent to which the estimation period has a bearing on the results, we have estimated VAR models with successive starting points from 1986 to 19968. Each model is quantified on quarterly data up to 2009. In the analysis, the interest rate increases by 1 percentage point and then gradually falls back. The increase in the interest rate will result in a temporary decline in GDP growth. The chart shows the effect in two of the models, one that is estimated from the mid-1980s and the other where the estimation period starts ten years later. The impact on GDP occurs somewhat earlier, but is a little smaller when we start the estimation period later. This may reflect the change in monetary policy regime during the period or structural changes in the Norwegian economy. Chart: Maximum impact of a 1 percentage point interest rate increase, different estimation periods If we only look at the maximum impact of an interest rate increase in each of the models, we obtain a picture of how this has changed over time. Each point in the chart represents the impact on the level of GDP and inflation when the effect of an interest rate increase is strongest in each model (estimation period).
In addition to buying securities in the market, these companies can invest households’ savings in other funds with differing risk profiles. There is thus a larger number of agents involved. The opportunities today to divide cashflow into different types of securities with the liquidity, duration and risk that suit a particular investor are another example. This means, for instance, that the banks which lend money to a customer do not need to retain the credit risk this causes, but can sell the risk on to, say, a pension fund company. They do this by selling the loan to a special company, which then  1  The inspiration for this speech has largely come from a discussion at the Federal Reserve Bank of Kansas City's seminar "Monetary Policy in the Era of Alan Greenspan", based on an article by Raghuram G. Rajan "Has Financial Development Made the World Riskier?". 1/5  issues securities with the loan as collateral. The pension company can then in turn sell the risks to others looking for good investments, such as households or other investors. Derivative products also enable risks to be divided up and priced separately. However, agents in the Swedish markets use both credit derivatives and securitisation relatively sparingly as yet. Internationally, these markets have shown rapid growth. In the year 2004 the value of outstanding contracts for credit derivatives was almost six times higher than it had been in 2001.

This would be above the range which the SNB equates with price stability. The forecast shows that the current level of interest rates cannot be maintained once the economic situation normalises. Since monetary policy has been expansionary for a long time now, there is a greater threat of inflation in the future. If the economic outlook continues to improve, it will be necessary to make adjustments to monetary policy. With our decision to leave the three-month Libor unchanged, we are adhering to our previous monetary policy course for the time being. We continue to support the economy, using the leeway available to us. This policy should guarantee longer-term price stability. As mentioned before, the SNB will respond appropriately if the Swiss franc appreciates rapidly, and is keeping all its options open for this eventuality, as it has done in the past. Observed inflation June 2005  Inflation forecast on March 2005 with Libor at 0.75% and of June 2005 with Libor at 0.75%  Inflation forecast of June 2005 (53 kb)