samchain/econo-pairs-v1 huggingface dataset:
By the middle of the 19th century, aggregate real wages were rising in the US and UK. Yet despite increased demand for their services, unskilled workers do not seem to have shared in this pay rise. Higher demand for their services was more than matched by increased supply, both from child labour and from displaced artisans as they moved down the skill spectrum (Clark (2010)). As a result, their pay appears to have flat-lined. At the high-skill end, the supply of workers was also increasing as some workers skilled-up (Clark (2010), Wallis (2014)). Despite that, there is evidence the skill premium for clerks and other professionals rose through the 19th century. The net effect of these complex shifts was thus to widen the distribution of wages between skilled and unskilled workers (Katz and Margo (2013)). Income inequality rose. The pattern of labour’s share of the national income is also interesting. This appears to have fallen in the first part of the 19th century (Allen (2009)), as Chart 21 illustrates. Workers do not appear to have enjoyed the early fruits of the Industrial Revolution. That perhaps explains why David Ricardo entered the fray at this time. In the event, these concerns proved ephemeral. With a lag, the rising tide of productivity and incomes lifted all boats, whatever their level of skill. Inequalities in wages started shrinking and labour’s share of income began to rise, returning to their levels at the end of the 18th century.

If the first part of the 19th century had seen substitution effects dominate, the latter half saw compensation effects in the ascendancy. Moving into the 20th century, and the third industrial revolution, these emerging patterns in jobs and wages have become clearer. Technology appears to be resulting in faster, wider and deeper degrees of hollowing-out than in the past. Why? Because 20th century machines have substituted not just for manual human tasks, but cognitive ones too. The set of human skills machines could reproduce, at lower cost, has both widened and deepened. Chart 22 shows the employment pattern in the UK over recent years, ranking professions’ skills by their average pay, while Chart 23 shows the picture for a set of countries over a similar period. They tell a striking and consistent story of mid-skill jobs being lost, counterbalanced by employment gains at the high-skill and, to lesser extent, low-skill segments of the workforce. The U-shape, or “hollowing out”, has deepened and widened. What has happened to these displaced mid-skill workers? Some appear to have “skilled-up”, typically through higher or further education. In the UK, total numbers in higher education have increased from around 130,000 in 1970 to over 2 million today. In the US, total numbers in higher education have increased from 2.4 million just after the Second World War, to over 20 million today. As in the late 19th century, this skilling-up has enabled workers to keep one-step-ahead of the machine. But some displaced workers have not been on the up-escalator.
It must also be mentioned that, given the exchange rate developments, the increase in the oil price was less marked in Switzerland than in the US and in the euro area. Despite higher oil prices, inflation in our country has remained within the range that we equate with price stability. BIS Review 39/2004  1  Economic prospects For a period of one to two years, the development of inflation depends decisively on the economic outlook. Our economy has already been on a growth track for a year now. Real gross domestic product in the third and fourth quarters of 2003 grew at an annualised rate of more than 2% compared with the previous quarter. In the first quarter of 2004 the trend continued at a slightly weaker rate of 1.6%. Due to improved economic activity abroad and the favourable exchange rate, exports exceeded their year-earlier level by 7.4%. Equipment investment, which had expanded by as much as 7.5% in the final quarter of 2003, declined slightly due to special effects. The upswing has also made itself felt in certain domestic sectors. This is evident in private consumption, which increased by 2.3%. The uptrend, which had begun towards the end of last year, thus continued. Surveys confirm that consumer sentiment has improved. Construction investment also topped the year-earlier level by a hefty 2.8%. The expansion in mortgage loans by 5.5% confirms the revival in the construction and real estate sectors. The upswing is also evident from a stabilisation on the labour market.

Jean-Pierre Roth: Recent financial and economic developments in Switzerland Introductory remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Geneva, 17 June 2004. *  *  *  The economy has developed in line with the expectations expressed in our monetary policy assessments of December and March. The economic recovery has increasingly gained hold in Switzerland and abroad and has become broader-based. Against this backdrop, we have reached the conclusion that the time has come for a slight tightening of monetary policy. The target range for the three-month Libor is being raised by 25 basis points with immediate effect and the Libor is being kept around 0.5%. This move reverses half of the latest interest rate cut of 6 March 2003; then the threemonth Libor was reduced from 0.75% to a historic low of 0.25% due to fears of deflation and the appreciation of the Swiss franc at that time. The interest rate range extends from 0.0% to 1.0%. Even after this adjustment our monetary policy will remain expansionary and continue to support the economic upswing. Let me offer some comments on our decision and the outlook for prices as summarised in the new inflation forecast. The graph provides you with the current and the last inflation forecasts. The dashdotted green curve is the March forecast, which presupposes that the three-month Libor rate would remain unchanged at 0.25% in the next three years.
While they lasted these regimes provided a degree of nominal exchange rate stability which no doubt helped the internationally exposed sectors of the economy. But the price ultimately was substantially increased instability in the economy as a whole. 3  BIS Review 54/1999  Of course, some commentators have argued that the problem we had within the ERM was the exchange rate at which we entered rather than the form of the arrangements. I am not convinced. The divergence between our domestic policy needs and those in Germany was such that it seems unlikely to me that any plausible difference in the exchange rate initially chosen for the peg would have made very much difference. But in any event the range of uncertainty surrounding the choice of a sustainable peg is an important part of the problem with any pegged or fixed rate regime. The UK has not recently experienced a fully fixed exchange rate regime – although we remain a potential member of European Monetary Union. But the basic economic pros and cons of a fixed rate regime are somewhat similar. Essentially the very real advantages are nominal exchange rate certainty within the Euro-zone – which accounts for some 50% of our external trade as well as participation of the domestic economy in broader, more liquid, pan-European financial markets.

Mr George outlines monetary and exchange rate policies for sustainable growth Speech by the Governor of the Bank of England, Mr E A J George, at The Central Bank Policies Conference, Macau, 17 May 1999. Mr Chairman, Ladies and Gentlemen, let me begin by saying that it is a real pleasure to be here with you today in Macau and to participate with such distinguished central bank colleagues in your conference. One of the very agreeable things about coming to the other side of the world to participate in an event like this is that it enables me to step back from the daily hubbub of my office, the financial markets in the City of London, and the media, and reflect in a broader way on what it is we are all actually trying to do. It is in fact much more agreeable than working! In a broad sense, of course, our ultimate objective as central bankers is clear, and it is reflected in your conference title when you talk about “leading the way to sustainable growth”. I would add high rates of employment and rising living standards to that objective. Very often in the past, certainly in my own country, but not just in my own country, that fundamental objective was seen to be largely a matter of demand management – of pumping up demand by expansionary fiscal and monetary policies – with too little regard to the structural, supply-side, capacity of our economies to meet that demand.
The Riksbank has obtained greater independence in relation to parliament and this is why its management has been given greater breadth – five deputy governors compared with two previously. The change towards greater independence for the Riksbank coincided with the clarification of the bank’s monetary policy task. It is now written in the Sveriges Riksbank Act that the bank shall maintain price stability. This is a development that has also taken place in many other countries. Inflation was for a long time a major problem in many parts of the world, but since the shift in monetary policy towards a greater focus on price stability, inflation has been brought under control. In addition to Sweden, twenty or so other countries currently have inflation targets, although not all of them have chosen exactly the same system for inflation targeting. Sweden was one of the first in this context. The increased independence has entailed greater demands for the Riksbank to explain its decisions. When I worked at the bank prior to 1999, work had already begun on improving analyses and communication and aiming for increased openness. This is a continuous process. During my years abroad I have seen several examples of the prominent role played by the Riksbank in central bank circles, particularly bearing in mind that we are a small central bank in a small economy. The Riksbank is now regarded as one of the most open central banks in the world.

The protection gap in Asia is set to widen for the following three reasons: a. First, the frequency and severity of natural catastrophes is increasing. According to UN data, the number of natural disasters in the Asia-Pacific has increased from an annual average of 44 disasters in the 1970s to 146 in the 2000s. b. Second, the wealth and value of assets at risk have also increased. Strong economic growth in Asia and growing urbanisation has led to the rise of small highly-populated megacities, many of which lie along areas that are exposed to natural perils. c. Third, insurance penetration is still low in Asia. Just over 8% 3 of natural catastrophe losses are insured in Asia as compared to 40% in developed regions. 9 ILS, together with other risk management solutions including reinsurance and government pools, have significant scope to play a larger role in reducing the financial impact of natural disasters. Globally, UK, Spain and France have already established natural catastrophe schemes that tap on a combination of traditional and alternative capital. 10 There are positive signs of change, with ASEAN making a push to address its rising exposures to natural catastrophe. Let me provide some examples of recent developments: a. ASEAN has commenced a holistic approach to disaster risk management through the ASEAN Disaster Risk Financing and Insurance (ADRFI) Programme. The Programme will strengthen ASEAN’s disaster risk management capabilities through: i. Improving data required for assessing disaster risk exposure and financing solutions. ii. Enhancing knowledge on disaster financing solutions through capacity building. iii.
In particular, central banks have had little directly relevant past experience with the impact of such a reduction in holdings of domestic securities and in reserves. One relevant experience, of course, was the 2013 “taper tantrum,” which shows that markets can have outsized reactions to changes in balance sheet policy even before they happen. Moreover, experience with asset purchase programs, both here and abroad, clearly demonstrates that market volatility can ensue from balance sheet policy changes that market participants perceive as surprising, unclear, or rapid. All of this indicates to me that, at policy turning points like these, central banks should carefully and clearly communicate their intentions, provide as much transparency as possible, and make transitions in policy implementation as slowly as overall macroeconomic policy objectives permit. 1 / 15  BIS central bankers' speeches  Policymakers have made it clear that balance sheet normalization is intended to operate in the background, and that the bar is high to making changes to the FOMC’s normalization plan. That said, the future is uncertain, and as a result the Desk will maintain an appropriate set of capacities should the FOMC deem something different be required to promote the Federal Reserve’s objectives. We will also continue to gather market intelligence, including through surveys of primary dealers and market participants and through a robust set of statistical data collections, to further policymakers’ understanding of market participants’ expectations for the balance sheet and to monitor market functioning. The rest of my speech will go as follows.

13 The Policy Normalization Principles and Plans indicates that all FOMC participants but one agreed that they did  not anticipate selling agency mortgage-backed securities as part of the normalization process, although limited sales might be warranted in the longer run to reduce or eliminate residual holdings, and that the timing and pace of any sales would be communicated to the public in advance. Portfolio projections released in July 2017 do not include sales of any type over the forecast horizon. 14 Statement Regarding Reinvestment in Treasury Securities and Agency Mortgage-Backed Securities, September  20, 2017. 15 See, for example, Sack, The SOMA Portfolio at $ Trillion, July 20, 2011, and Bernanke, The Economic  Outlook and Monetary Policy, August 27, 2010. 16 14 / 15  BIS central bankers' speeches  16 See Bonis, Ihrig and Wei, Projected Evolution of the SOMA Portfolio and the 10-year Treasury Term Premium  Effect, September 27, 2017. 17 Kandrac, The Costs of Quantitative Easing: Liquidity and Market Functioning Effects of Federal Reserve MBS  Purchases (2014). 18 The Treasury Borrowing Advisory Council considered this topic in its third-quarter 2017 meeting, including the  potential impact of changes in central bank policy abroad. See the August 1, 2017, presentation by TBAC to the U.S. Treasury. 19 In addition to these topics, we are following closely the potential for the decline in the balance sheet to affect  other aspects of the structure of financial markets or the banking industry.
The central issue, however, is how more pronounced problems or crises for stabilisation policy are to be handled. One approach to this is to relate once again to our own experiences. As I see it, we have had to face problems of two types. One concerns a lack of knowledge about the direction in which the economy is moving. A dramatic example of this is the crisis in 1990, when neither the problem that was looming with the real interest rate nor the crisis in the financial system was identified in time by virtually any Swedish observer. The other problem is political and has to do with the difficulties in keeping policy sufficiently tight over the business cycle, particularly when demand exceeds long-term supply. A good illustration of this problem is the late 1980s. Perhaps one should mention a third problem, namely that automatic stabilisers affect demand regardless of the nature of the preceding shock. If demand in general has weakened on account of, say, a share price fall that has affected household wealth, all will be well; a part of the loss of demand will be compensated automatically. Things will be different if the shock comes from the supply side, for instance as an oil price rise or a change in productivity. There could then be grounds for a discretionary policy move to adjust demand to the change in production capacity; this could be more difficult in the absence of an independent monetary policy.

1  2  Borio, C.: Monetary policy and financial stability: what role in prevention and recovery?, BIS Working paper No. 440, January 2014  BIS central bankers’ speeches
23  For example, a money market mutual fund could choose to restrict its investments only to overnight reverse repurchase agreements provided by the Federal Reserve if it believed these instruments would continue to be supplied in the far future. 24  See http://www.federalreserve.gov/newsevents/press/monetary/20140917c.htm. 6  BIS central bankers’ speeches  Conclusion I want to conclude by saying a few more words about the value of engaging broadly with the public, with market participants, with researchers both in central banks and in academia, and with our global central bank counterparts. The issues we will have to tackle are important and complex, and there is much to gain from different points of view. Market participants can provide a deeper understanding of financial market dynamics and shed necessary light on the impact and limitations of monetary policy on a practical dimension. As we saw today, researchers can provide empirical analysis as well as models that help us think about the impact and effectiveness of different tools or policies. Whether they work in central banks or academia, they provide a perspective that we need to take into account when thinking about our long-run framework. And, of course, we can learn from our peers in policymaking and on markets desks at other central banks. We may have tried things that worked very well, or did not work so well, and comparative experience can be extremely valuable.

3 Speech made on 22 January 1988 during the celebration of the anniversary of the signature of the Elysée Treaty. 4 Speech assessing the German Presidency, before the European parliament – 29 June 1983. 3/3  BIS central bankers' speeches
10  Neild (1964) and the National Economic Development Office (1965) used questionnaire-based evidence. A large proportion of firms in the sample claimed to use a pay-back criterion and of these the modal pay-back period was 3–5 years. Census evidence from this period indicated that the average useful lifespan of machines was over 15 years. The distribution of plant and equipment lives in Dean and Irwin (1964) implied a mean economic life of 34 years. 11  Sumner (1974) reaches similar conclusions. 2  BIS central bankers’ speeches  mid-1970s, it was doused by a torrent of papers testing – and typically failing to reject – the efficient markets hypothesis. This new wave swamped empirical finance for the better part of a decade. In the late 1970s and early 1980s, the efficient markets paradigm appeared all-conquering as a description of asset price movements in practice.12 Research on the inefficiencies of capital markets became something of a backwater. The voting machine appeared to be delivering outcomes both democratic and socially beneficial. But beginning in the 1980s, a whole sequence of “puzzles” in empirical finance began to emerge. These were puzzles only in the sense of being deviations from efficient markets.

These include targeted utility rebates that directly alleviate the higher cost of living for households. Similarly, SMEs received a one-off cash grant in this year’s Budget to help offset higher business costs. Implications for asset prices My third point is that it is important to respond appropriately to rising asset prices, including in the housing market. Following the recent financial crisis, major central banks reduced policy interest rates to historical lows. Credit growth in this region has recovered strongly, in Singapore and other Asian economies. There is a danger that systemic risk can develop and crystallise in a number of ways. For instance, low interest rates may encourage risky borrowing and lending practices, to create a build-up of leverage in households’ and banks’ balance sheets. Capital flows into Asia can also contribute to higher bank leverage, as well as asset price inflation, with the risk of sharp corrections in asset prices should these capital flows reverse quickly. Past experiences have shown that when highly leveraged asset markets correct sharply, they can lead to enormous stress on the banking system and significant collateral damage on the real economy. The views among central bankers have therefore increasingly shifted towards the need to take pre-emptive measures at an early stage. The global experience with monetary policy, however, suggests that broad policy instruments like exchange rates and interest rates have very significant collateral effects, and are often subject to long and variable lags before impacting asset markets.
This blow required a quick and comprehensive response of the public authorities, both in terms of health and economic and social. In addition to fiscal easing measures, the Bank of Albania undertook a comprehensive package of measures to provide the necessary liquidity to the banking system, to boost lending and to control debt service costs. This package includes: 2/3  BIS central bankers' speeches  reduction to 0.5% of the key interest rate and unlimited supply of liquidity to the banking system; temporary easing of banking regulations, to enable the temporary postponement of the payment of loan installments to customers in difficulty and the consensual restructuring of loans to customers with solid business prospects, helping business finances and increasing their chances of survival; elimination of operating costs of the electronic payment system, in response to the increasing demand for this type of activity; increase operational capacity to guarantee the supply of the economy with physical money. In response to these measures, financial markets continue to function normally, despite increased public sector demand for financing and increased uncertainty in the economy. They also enable and complement the fiscal package of the Albanian government. In economic terms, coordinated fiscal, monetary and macroprudential measures have partially mitigated the negative effects of the pandemic. However, the challenges ahead remain serious. In our judgment, the Albanian economy has the premises to successfully withstand this blow. However, this requires that all public actors and private sector operators make the right decisions, in a timely manner and in the most coordinated manner possible.

Coping with the shock is within our means, if each of us will do our best and if we continue to guarantee with priority the monetary and financial stability of the country. Thank you! 3/3  BIS central bankers' speeches