samchain/econo-pairs-v1 huggingface dataset:
The growth of domestic demand is likely to be held back by the relatively tight fiscal policy as well as by the monetary policy tightening since May; and the effect this year of “windfalls” as a result of building societies’ demutualisations will be very much smaller. And we expect a deterioration in our net external trade position as a result of the strength of sterling’s exchange rate and now, too, as a result of the recent developments in Asia. The difficult questions for policy relate to the timing and the extent of the slowdown that is necessary on the one hand and likely on the other. These are difficult judgements at any time. They are particularly difficult when the economy is already close to full capacity. It is not surprising BIS Review 3/1998  -3-  that commentators differ in degree in their assessments. Economics is not - as I say - a precise science. Neither we at the Bank nor anyone else know with any great precision exactly where we are in relation to full capacity or exactly how fast capacity is growing; and we don’t know precisely either how demand will in fact respond to the policy tightening that is already in place. Our own best - and very carefully informed - guess is embodied in the forecasts that we publish each quarter, and we monitor immensely carefully the new information that becomes available day by day in the light of that forecast for early warning signs of emerging imbalance.

We can, and have, and I hope will, take account of the exchange rate in our tactical approach to monetary policy. But with the best will in the world, what we cannot sensibly do, is to ignore the strength of domestic demand in order to shelter the exposed sectors. That would put the whole of the economy at risk to accelerating inflation - including those sectors we were seeking to protect. And it would not be of much help to them in anything other than the short term. The monetary policy option is - as I say - not whether or not, it is sooner or later, and ultimately less or more. The elements of hope that I can hold out to you - and central bankers can never give guarantees on this kind of thing - are first, that as we move into the euro process the markets will become increasingly persuaded that the ECB will, in fact, be committed to the stability of the new currency, as I am sure it will: and, secondly, that relative monetary conditions will change as activity picks up on the Continent and domestic demand moderates in this country. Our present exchange rate dilemma, Mr. Chairman, illustrates rather well the conflicting arguments about the euro project itself. The strengthening of sterling and its effect on the exposed sectors of the economy point up very vividly the very real advantages of the exchange rate certainty across the European Union area which only the euro can provide.
The euro deepens and completes the single market  a)  The euro makes the completion of the single market possible. It enables the productive sector and companies to achieve significant economies of scale, and all European savings to be allocated to the most efficient investments. It also enhances the transparency of the market and boosts competition and innovation to the benefit of consumers. However, the ultimate objective of the single market could not be fully achieved while monetary barriers continued to prevent the free flow of goods, services and capital by imposing unpredictable and erratic exchange rate movements and transaction costs. The last step in this process will be the euro cash changeover at the end of this year; it will enable not only companies but all our citizens to enjoy all the benefits of using the same monetary instrument throughout Europe, just like Americans do today with the dollar throughout the United States. b)  Moreover, the introduction of the euro brings about a significant change in the economic and financial environment. The introduction of the euro has been a strong catalyst for mergers and acquisitions in the euro area. The European M&A market has been in 2000 one of the most dynamic in the world with operations totalling around one trillion euro. The single monetary policy encourages structural changes in the financial sector, in both the euro area money market and longer-term capital markets. This gives euro area investors greater possibilities and improved financing and investment conditions.

Pre-euro economic policy required careful monitoring of the balance of payments and the foreign exchange and interest-rate markets. The authorities received constant feedback on key indicators affecting national economic performance and could then react accordingly. These indicators were sensitive, multiple and very reactive. At present, with the advent of the single currency, economic managers must monitor the relevant competitiveness indicators with even greater vigilance, as economic policy errors  BIS Review 96/2001  5  could have slower and more insidious repercussions, such as rising unemployment and weak growth. The rules of a market economy continue to apply to all euro area countries. Jobs are created by consumers – totally free to purchase whatever they wish – when they choose the goods and services that they deem to be best value for money. Companies – totally free in their investment choices – locate their business according to the relative competitiveness of the different possible sites. It is therefore necessary to monitor competitiveness even more closely than before, in particular unit production costs, and the tax and regulatory framework. The multilateral surveillance carried out in the context of the Eurogroup, will help monitor competition trends in each euro area country and in the zone as a whole and, where necessary, suggest appropriate adjustments. III. A smooth changeover to the Euro will also be a determining factor for Europeans’ confidence in their new currency  Of course, the Eurosystem is at the heart of the euro cash changeover process.
if a member has views which are consistently adrift of the rest of the Committee, leading them to believe that rates are significantly too low/high, then they may repeatedly – and unsuccessfully – vote for a change without being ‘activist’ in the sense of wanting to change rates frequently in response to news.

How far do our forecasts appear to drive interest rate decisions? And is there any evidence that this has helped to make policy more or less predictable? Finally I want to end by commenting on some of the issues raised by forecasts as a means of communication. Why the MPC has always been involved in forecasting The MPC’s early involvement in the forecast process is firmly rooted in the kind of committee it is, as well as the nature of the remit it has been given. The objectives of UK monetary policy have been expressed in terms of an annual inflation target since 1992, but responsibility for achieving the target initially lay with the Treasury, acting on the Bank’s advice. In 1997, as part of a wide ranging restructuring of the Bank of England’s role, decisions about interest rates were delegated to the Bank’s new MPC. Its nine members – five internal Bank officials and four external members chosen for their relevant knowledge and experience – are individually, and publicly, accountable for meeting the inflation target. The Government remains responsible for setting the annual inflation target, within the context of legislation that requires the Bank of England to achieve ‘price stability and subject to that to support the government’s objectives for output and employment’. Under its current remit, the MPC is required to achieve 2% consumer price inflation ‘at all times’.
Accordingly, these structural impediments have caused the natural rate of unemployment to increase. The structural impediments scenario sounds plausible to many, but I do not find it compelling. As best I can tell, it rests on lots of conjecture about economic forces and outcomes that are not confirmed by the evidence at hand. As an economist seeking firm quantitative explanations, I am not aware of any rigorously studied economic models1 that both match critically important time-series properties of the data and support the notion that today’s high unemployment rate arises from special structural impediments.2 Even generous estimates of the impact of structural reallocation and other factors on today’s equilibrium, or the so-called natural rate of unemployment, do not come anywhere near the current 9 percent rate of unemployment. Nevertheless suppose this scenario were true. In this case the role for additional monetary accommodation is modest at best: the economy faces a supply constraint that monetary policy simply cannot address. Accordingly, those subscribing to this view think that additional easing would likely raise inflation without having a sizable impact on unemployment. In this scenario, our running a more accommodative monetary policy potentially risks repeating the stagflation of the 1970s. At that time, the Fed did not understand that the changing structure of the economy had caused the natural rate of unemployment to rise. In an effort to reduce the unemployment rate, it provided too much accommodation that only served to raise inflation and inflation expectations.

Charles L Evans: A risk management approach to monetary policy Speech by Charles L Evans, President of the Federal Reserve Bank of Chicago, at the Ball State University Center for Business and Economic Research Outlook Luncheon, Muncie, IN, 5 December 2011. *  *  *  Introduction It is my pleasure to be here in Muncie today to speak to you about my views on the progress of the recovery and on the course of monetary policy. I would like to thank Steve Smith, president of the Muncie Forecasting Roundtable, for that kind introduction. For those of you who follow monetary policy deliberations, you will certainly be aware that I was the lone dissenter at the last policy meeting held in early November. So it should come as no surprise when I say that the views that I am presenting today are my own and not necessarily those of the Federal Open Market Committee (FOMC) or my other colleagues in the Federal Reserve System. Real output gap Four years ago the U.S. economy entered what developed into the deepest recession since the Great Depression. Two and a half years ago the recovery began. Yet, despite both accommodative monetary policy and fiscal stimulus, the pace of improvement has been agonizingly slow. Real gross domestic product (GDP) is only just back to where it stood at its pre-recession peak in 2007, employment growth is barely enough to keep pace with natural growth in the labor force and the unemployment rate remains extraordinarily high.
Figure 16 Output gap (1)(2) (level, percentage points) Mar-21 Report  4  Jun-21 Report  0  -4  -8  -12  -16 19  20  21  22  23  (1) Historic estimates of the gap have changed because of recalculation of Potential GDP. The forecast uses the Multivariate Filter, which factors in the new Non-mining trend GDP (20212030 average: 2.9%). (2) Dotted lines show forecast. Source: Central Bank of Chile. Page 22 of 27  Figure 17 Inflation forecast (annual variation, percent) 5  CPI  MP Report Jun.21  Core CPI (*)  MP Report Jun.21  4  3  2  1  Forecast  0  20  21  22  23  (*) Measured by the CPI minus volatiles. Sources: Central Bank of Chile, National Statistics Institute (INE), and Health Ministry of Chile. Figure 18 Total factor productivity (TFP) growth in Chile (*) (percent) 6  TFP  5  1997-2019 mean  2011-2019 mean  4 3 2 1 0 -1 -2 -3 1997  1999  2001  2003  2005  2007  2009  2011  2013  2015  2017  2019  (*) Annual growth in TFP for non-mining GDP. For details, see the monetary policy meeting's minutes released together with this Monetary Policy Report. Source: Central Bank of Chile.

This is particularly true in the euro area, where the gap between savings and investment is huge: the current account surplus reached EUR 350 billion on a yearly basis in August 2016,  2 which is more than 3% of GDP.i I believe that the solution to closing the gap is not to diminish savings, but to increase productive investment – and savings can be instrumental in doing so. Let me delve further into this issue by answering three questions: what is the evidence? What are the causes? What is the remedy? ** First, what evidence do we have? The total investment to GDP ratio offers a first glimpse of the current investment dearth (slide 4). The 2007-08 crisis caused the total investment ratio to fall sharply. In many countries, it has not yet returned to its pre-crisis level. This is particularly the case in the euro area, where the total investment ratio has dropped by around 3 points since the 2007 peak and has only slightly recovered since. By comparison, the pace of the recovery is significantly faster in the United States. Now, (slide 5) let’s dig deeper into the composition of this investment dearth: real estate and public investment have contributed to the post-crisis decline in total investment, but what matters the most for our economy is the contraction in business investment.
As we move forward with developing the framework and standards, we are reviewing current and emerging laws, regulations and guidance; further researching best practices; and identifying gaps in current assessment efforts. As we do this, we have identified a set of issues that are top of mind: 1. This is not just an IT issue  As I mentioned earlier, cyber isn’t just an IT issue. I don’t think I can say this enough. It is a business issue first and foremost and needs to be tackled as such. Cyber needs to be owned by the business leaders in the firm – partnering with the experts of course. There needs to be a foundational shift in thinking at the top of the house: it needs to be a regular topic on the agenda for the board of directors; it needs to be at the top of the priority list for senior management of the firm; and it needs to be on the mind of every employee, to some extent. It needs to be part of everyone’s vocabulary and recognized as a valid threat at every level. 2. Good risk management is the foundation  Good risk management and good IT practices set the foundation for a solid program to address cyber-related risk. It’s hard to imagine that a firm that doesn’t manage its IT risk well is ever going to be able to manage cyber risk well.

As we review all published guidance, assess the broad volume of research that is already out there and come to consensus on an evaluation framework, we encourage firms to look at the fundamental commonalities across all best practices and build them into your ongoing/current activities. BIS central bankers’ speeches  5  7. Assessing the threat  To fully assess a threat or risk to a firm, we must first understand where the risk lies, who it affects, how it is defined, and what the associated costs are. In the case of assessing the risk and impact of cyber-attacks, I believe firms need to be cognizant that every business decision, every process, every change a firm makes ultimately has a cyber-related element to it. To add to the complexity of this, the firm’s self-awareness must extend beyond the four walls of their company and must also take into account the impact critical service providers have on the firm. You can outsource the service, but not the risk. Everyone should be using threat intelligence as we go about our day-to-day activities – using the potential of a cyber-attack as another filter through which we view every decision. As we think about the variables to be considered in the decision-making process, we must build in the potential for creating weaknesses, vulnerabilities or opportunities for cyber-attacks, and be aware of the associated costs.
13  Figure 3 GDP evolution (real annual change, percent)  3,5  3,5  3,0  Other  2,5 2,0  3,0 2,5 2,0  1,5  Total  1,5  1,0  1,0  0,5  0,5  0,0  0,0 14  15  16  Source: Central Bank of Chile. Figure 4 Other sectors (real annual change, percent)  8  Personal services  6  8 6  Trade  4 2  Construction  0  4 2 0  Manufacturing  -2  -2 Business services  -4 14  15  -4  16  Source: Central Bank of Chile. 14  Figure 5 Consumption  GFCF  (real annual change, percent)  (real annual change, percent)  8 8  8  20  Construction and other works  Durable  Non-durable  4 4  10  0  0 0  0  -4  -4-4  -10  4  Machinery & equipment (right axis)  -8  -8-8 14  15  16  -20 14  15  16  Source: Central Bank of Chile.

Of course, the duration of the period of high inflation was long, but it responded to a succession of different shocks and not to the persistent effect of a single one. 8  On the contrary, whenever we identify medium-term pressures on inflation, either upward or downward, we must react with vigor. The same episode which I have just referred to is illustrative in this regard. While in the short term inflation rose as a result of a shock on the exchange rate, with transitory effects, medium-term pressures diminished as a result of a deteriorating economy. Had our target been short-term inflation, we should have raised the MPR. As it is not, and what we aim at is medium-term inflation, our decision was to lower the MPR to prevent inflation two years out from falling below the 3% target. This response of monetary policy is very different from its not so distant past. In the 1990s, when our economy was not yet sufficiently prepared to deal with a currency shock, the Bank had to choose between an inflation target and an exchange rate target. The result of the exercise was complex for the Chilean economy. Not to mention what happened in the early 1980s, when the defense of a pegged exchange rate and changes in external financial conditions led us to a recession that cost us 15% of lost GDP and escalating unemployment.
The question is not whether but how we should develop the machinery for tokenised transactions to settle in central bank money – in other words what will provide the most efficient, effective and fastest route to this end, given our current starting point. One way forward is for the central bank to tokenise the wholesale money, central bank reserves, we issue and to develop a ledger system for transferring the tokens between the wholesale players that have access to the Bank’s payment systems. We, like other central banks have been exploring such options. But there are other options. One would be for a trusted private sector network to hold an account with us and tokenise the reserves and operate the ledgers and transfers within that account. Only changes in the overall balance of the account would need to be recorded in our ledgers. In 2021 we introduced the option of an ‘omnibus account’[20] to facilitate the private sector development of such networks and there are private sector proposals in progress to introduce them[21]. Another possibility would be for a tokenised ledger, including a distributed ledger, to be securely and instantaneously synchronised with our central real-time gross settlement system (RTGS) .That is not possible today in our current RTGS. But we are now well advanced in the implementation of the next generation RTGS, which is scheduled to go live next year.

Sir Jon Cunliffe Deputy Governor, Financial Stability  ©2023 Bank of England
There is the same need therefore to make hard choices between alternative means, and the international process for making those choices is inevitably more complicated than in our national environment. To take some examples, there is substantial evidence that increasingly free world trade and increasing freedom of international capital flows are contributing to unprecedented rates of growth in the global economy as a whole and more rapidly rising living standards in almost every region of the global economy. It is certainly possible to argue even so that the free trade playing field remains tilted against poorer countries, or that it should be tilted more in their favour: distinguishing between self-interested protectionism and “fairness” or equality of competition is not wholly straightforward. But there would be a real cost to all of us, including particularly the poorer countries, if we were to be tempted to throw the baby out with the bath water and retreat behind trade barriers. 5  BIS Review 110/2000  Similarly we have recently seen all too clearly the damage that can be caused by the volatility of international capital flows - but we need to set that against the positive benefits - in terms of potential growth rates - that had previously resulted from massively greater private sector capital investment in many of the emerging markets, and which has now resumed.

The net effect of particular forms of intervention may enhance the capacity of the private sector to create wealth and employment - I imagine that most people would generally regard public health and education services, for example, in this way, or forms of regulation that enable markets to function more effectively. But even then there are questions of degree. And other forms of intervention may be more likely to reduce the wealth-creating capacity of the private sector by, for example, blunting incentives either to provide or to take up employment. That is not, of course, to say that they are in any sense necessarily wrong, merely to point out that here again choices to be made, the difficulty often being to know where to strike the balance between conflicting objectives. The question of relieving poverty needs to be addressed within this framework. Our social conscience may say that we should lean more towards redistribution in favour of the poorer sectors of our community generally, or in favour of those who are particularly disadvantaged in one way or another and goodness knows there are endless causes that in themselves are worthy of our collective support. 3  BIS Review 110/2000  But it is important to recognise that in doing so, we could reduce the wealth and income generating capacity of the economy as a whole, and so reduce our ability to provide rising living standards to all sectors of society, including rising absolute living standards of the poorer sectors we were seeking to help.