samchain/econo-pairs-v1 huggingface dataset:
On the other hand, it would be less clear exactly how the valid objective is defined. In addition, it is difficult to foresee all the corrections warranted and to quantify their exact price effects. Finally, it is a problem that corrections of this kind are so highly dependent on the central bank’s own asessments, which can influence credibility negatively. 2. A closely related alternative is to use a measure of underlying inflation as target. Compared to the first alternative, it has the advantage of giving a clear definition of the BIS Review 56/1997  -9-  objective. It would, however, lead to difficulties similar to those of alternative 1 with respect to problems of defining and quantifying the effects of various disturbances. 3. Another possibility is to supplement the CPI by one or several measures of underlying inflation. In Canada the objective is expressed in terms of the CPI whereas a measure of the underlying inflation--which descibes the process of inflation better--is the operative target. In the long run, the final goal is reached since there is a clear link between it and the operative target. A ”softer” variety on the same theme is to clarify how practical policy is influenced by underlying inflation, since it can often give a clearer picture of the process of inflation.

The Governing Council decided to leave the current value unchanged at an annual growth rate of 4½% for the broad aggregate M3, as the evidence continues to support the assumptions which have formed the basis of the derivation of the reference value since 1999, namely a trend potential output growth of 2-2½% per annum and a trend decline in M3 income velocity of ½-1% per annum in the euro area. When comparing current developments with the reference value, it is important to bear in mind that the assessment of monetary developments is essential for long-term trends in inflation and that the reference value is therefore to be seen as a medium-term concept. Short-term movements of M3 do not necessarily have implications for future price developments. Moreover, deviations of M3 from the reference value must be analysed in conjunction with other real and financial indicators in order to understand their implications for price stability. Turning to our current assessment on the outlook for price stability in the euro area, and starting with the first pillar, M3 growth remained high in the last quarter of 2002. The continued strength in monetary growth reflects an ongoing pronounced preference for liquidity in an environment of high financial, economic and geopolitical uncertainty. In addition, the low level of interest rates in the euro area makes the holding of liquid assets relatively attractive.
Perhaps the best-known example of cellular automata came several years later: Conway's “Game of Life” (Conway (1970)). In 1949, the emerging technique of Monte Carlo analysis was beginning to gain traction. A symposium organised and sponsored by the RAND Corporation – a spin-off of the US War Department – was the springboard for developing some of the first military applications of ABMs. What had once been simple board-and-dice based war games switched to computational ABMs during the 1960s, borrowing heavily on von Neumann’s cellular automata (Woodcock et al (1988)). These models have since been used to provide insights in a range of real-world military operations, past and present. They have been used to understand the dynamics of past battles, such as the operation of German U-boat battles (Champagne (2003)), Hill et al (2004)). And they have been used, typically secretly, to plan  3  See Metropolis and Ulam (1949). Metropolis reports that he came up with the name, but it was inspired by Ulam's uncle asking for money by claiming he “just had to go to Monte Carlo''. By 1949, they had written a paper together outlining the potential uses of this method including a chain-reaction with particles as Monte Carlo agents. 12  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  12  military strategies for current conflicts, with organisations such as the US Naval Research Laboratory and the US Air Force investing in ABM technology (Manheimer et al (1997)).

Incentives for increased saving were not actually introduced until the crisis was actually upon us and then they only helped reinforce the decline. It may seem something of a paradox that international organisations, such as the Basel Committee, are now implementing a number of new regulations – such as Basel II – despite the fact that the old regulations had negative effects and were therefore abolished. However, these are a completely different type of regulation. The old regulations were aimed at prohibition and other strict controls, while modern regulations give the banks plenty of flexibility to offer their services as long as they meet certain fundamental conditions. For instance, Basel II allows the banks to determine their own risktaking to a great extent, as long as they have adequate risk management and capital reserves. The experiences of regulation and the crisis also show clearly how important it is that the central bank can make independent decisions regarding the interest rate according to objectives set by parliament, for instance, to maintain inflation or the exchange rate at a stable level. If there are no guidelines for the interest rate, or if the parties that determine the interest rate have differing interests, it will often be set too low for the purpose of benefiting borrowers, investment and central government consumption. This was the case in Sweden during the years of regulation. Apart from leading to higher inflation and pressure on the exchange rate, exaggeratedly low interest rates also have a negative effect on the financial sector.
M R Chatu Mongol Sonakul: Thailand - where we are now and what we are trying to do  Speech by Mr M R Chatu Mongol Sonakul, Governor of the Bank of Thailand, at the Asia Society Southern California Centre, on 3 October 2000. *  *  *  President of the Asia Society of Southern California, distinguished guests, ladies and gentlemen, Two years ago this month, I came to speak to this Society. It was to tell you how Thailand was getting along, what we were going to do and to solicit your support as friends of Thailand. Those of you who were present might recall the things I said we were going to do. They were very rudimentary as far as central banking goes, and that the economic and financial numbers then, whilst improving, were not necessarily a basis around which a good future could be built. The numbers are in many ways now better and we have gone on to do all the things which I said we would do and develop the more sophisticated mechanisms of central banking, such that we are far in advance of our indications two years ago. It is usually a happy occasion when one could report that one has done more than what one has set out to do. But I am not really a happy man today. The economy is still fragile, and there are vast areas left to be mapped out and implemented.

Next February we are hosting a select meeting of econometricians in inflation targeting model-making, and we will see if after that we could make our model into a linear zone-quadratic model, which would be more consistent with a target band than the present model which is really better fitted to a point target. The link back between inflation targeting and forex stability is, however, more nebulous and we have therefore fortified it with technical changes in the trading system designed to keep exchange rates more stable again basically through transparency. In my statement two years ago, I said we had set up a money market committee to oversee our operations in the money markets as well as forex, including swaps, forwards, options, and such likes. This we have now developed into a very good domestic monitoring vehicle, and the control of offshore baht will be fortified next week with our reissuing of forex declaration forms, which reflect the reality of the market condition today. The old forex forms allowed us to know the purpose of forex transactions only of 40% of total transactions, since it was issued some 20 years ago, when 60% of today’s transactions were unknown or insignificant in the system. Although this in itself is not designed to limit or restrict forex flows, we believe the increased transparency will make the system less prone to speculation especially as we are one of the few central banks that have decided to keep supervisory powers within the central bank.
An indignant Apelles then reminded him that a shoemaker should not criticise above the sandal.16 The expression we use today in Sweden – Let the cobbler stick to his last! – may sound outdated and rather negative as an attitude.17 But if one rewords it, and at the same time removes the critical tone, it could be: “The best thing is for everyone to stick to what they do best.” I think the interpretation of the old expression summarises my point fairly well. 16  Pliny the elder, Naturalis Historia, book 35, chapter 36. 17  A perhaps more commonly used English idiom with the same implication is “Every man to his own trade!”. 8  BIS central bankers’ speeches  For around two decades we have had a framework for monetary policy that has proved effective in anchoring inflation expectations and creating stability in the economy. This framework has quite naturally developed and been refined over the years, but essentially it means that the central bank has a clear task of maintaining stable prices in the economy and the mandate to make decisions to attain this independently. Stable prices are something that benefits everyone in the long run, but are difficult to attain because there can be such great temptation to deviate from the target in the short run to attain other targets – such as lower unemployment.

14  Model estimates of the short-term relation between the repo rate and household indebtedness indicate that the average effects may be relatively small: a 1 per cent lower repo rate over a period of one year, and which gradually reverts, will give rise to an approximately 4 percentage points higher level of indebtedness as a percentage of disposable income. Similar estimates of the relation between housing prices and the repo rate also show small effects – see Sveriges Riksbank (2011) Chapter 2.1.However, estimates of short-term relations might underestimate the total effects of the repo rate on household indebtedness. 6  BIS central bankers’ speeches  and having a potentially better target attainment in the long run is thus very unclear. On the other hand, the costs in terms of poorer target attainment a couple of years ahead are very clear. Other tools than the repo rate could moreover influence household debt more effectively. Various types of tax tools are probably particularly potent, such as tax deduction regulations and property taxation, but at the same time these are the most politically sensitive. So-called macroprudential policy tools are probably more effective than monetary policy in influencing debt in the household sector. Finansinspektionen, which has been given the main responsibility for these tools, has already used several of them and has signalled that it will remain vigilant with regard to risks linked to household indebtedness. This should reasonably have an effect on the monetary policy trade-offs.
Denis Beau: What European financial sovereignty in a digital world Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the conference "Assises de la Technologie Financière", Paris, 17 October 2019. * * * Ladies and Gentlemen, I would like to thank Ms. de la Raudière for her invitation to this conference, which reflects the financial community’s ever growing interest in the ongoing evolution of the banking and financial system. The organisers of this conference asked me to give you my perspective as central banker and supervisor on the complex issues involved in the boom of digitisation in the financial sector. I will attempt to meet this challenge, by first observing that, for some years now, Europe has entered a world where digital technology is profoundly changing the business models of many economic sectors. The banking and financial sector is no exception. New players are entering the market with new proposals, more suited to the uses and requirements of the “digital” consumer. They challenge established players by fragmenting a traditionally highly integrated value chain. The first of these new entrants are FinTechs. These start-ups are able to outperform the historical players on a link in the value chain, providing new services to consumers or reducing costs. The second are BigTechs.

The question that arises today is: which systems could become more efficient or offer greater possibilities as a result of technical decentralisation? In the field of regulation and supervision conducted by the ACPR, we applied the same principles. Take the case of Artificial Intelligence (AI). How do we concretely define the conditions for a controlled development of artificial intelligence and define the principles of its control? It is in this spirit that we designed our IA workshops: the ACPR FinTech experts and the Banque de France data scientists met established players to understand their perception of these technologies and assess their level of maturity. In the areas of AML-CFT, internal models and consumer protection, the lessons learned from these meetings and tests under production conditions will provide us with crucial information for building a future framework conducive to controlling the development of Artificial Intelligence. (iii) Aware of the importance of the issues and clairvoyant as to their complexity, ready to change our regulation and the exercise of our missions, we must also be bold, that is to say, innovative. To conclude this speech, I would like to stress two important elements. First, European financial sovereignty does not depend solely on the authorities of its Member States or on the regulations drawn up by the European Commission; it depends first and foremost on the vitality of the European ecosystem and on the innovation effort of all players, be they established or new.
It has often been argued that economic growth should be given priority at the current stage, and only later on should the nominal convergence goals be pursued more vigorously. As a result, we have heard many warnings against fast EMU entry. In reality, however, most of the accession countries have already achieved impressive results in the nominal convergence process. They are now among the countries with moderate or even very low  BIS Review 17/2003  1  inflation rates, and their nominal interest rates have converged to the EU levels. In the majority of cases, no practical problems with achieving the Maastricht criteria on inflation and long-term interest rates are thus envisaged. Moreover, this progress has often been achieved simultaneously with satisfactory growth performance, even though some countries have gone through periods of growth slowdown correcting previous imbalances in their economies. Therefore, I think that the potential conflict between real and nominal convergence has often been exaggerated. The two processes have different time horizons, nominal convergence being achievable in the medium-run, whilst real convergence remains a long-run matter. There is, however, one particular link between the two processes that needs to be taken into account when we design our policies towards EMU accession. Faster GDP growth is likely to lead to a real exchange rate appreciation, making it impossible to have both very low inflation and a completely stable nominal exchange rate. This issue is well known and has received much attention.

The IMF estimates that it stands 10% to 15% below pre-crisis forecasts in the euro area.ii However, to fully understand the situation, we need to take a closer look at the nature of business investment. We must distinguish between investment in construction on the one hand – which in itself does not spur innovation – and investment in research and development and industrial machinery on the other, which I call “productive investment”.iii The matter of concern is that productive investment is insufficient: across the economy as a whole, the productive investment rate has long been lower than before 2007 in the euro area and is persistently weaker in France than in Germany. This brings us to the third important feature of this investment dearth: the behaviour of businesses (slide 6). Since mid-2009 it has dramatically changed: given the  weakness  of  business  investment,  non-financial  corporations have turned from net borrowers into net lenders. Thereby they  3 have fuelled the current account surplus in the euro area. In short, all of these realities converge: the root of the problem today in Europe is the investment deficit more than the savings glut. 2. Now, why has this investment dearth happened? Let me briefly elaborate on the key levers of investment. The first and most important one is expected demand (slide 7). The overall weakness in economic activity acts as a deterrent for most businesses.
Lars Nyberg: The framework of modern central banking Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at a Conference on Reforming the State Bank of Vietnam, Hanoi, 21 March 2006. *  *  *  Thank you for inviting me to this conference on reforming the State Bank of Vietnam. I imagine that one reason why I have been invited here is that the central bank I represent, Sveriges Riksbank in Sweden, just over a decade ago was in a situation which resembles the one the State Bank of Vietnam is experiencing now. At that time we had reached a situation where there were strong reasons – if not imperative ones – for reconsidering the way in which we used to think about monetary policy. It became clear that a reform of monetary policy and its framework was both desirable and necessary. Of course, Sweden is by no means the only country where monetary policy has undergone major changes in recent times. The view of how best to conduct monetary policy has changed fairly radically over the past twenty years and this has been reflected in a more or less worldwide reform process. What I hope to be able to contribute here today – as an introduction to the discussions – is to provide an overall picture of the ideas that formed the basis for this process and to describe what are today considered to be the guiding principles for a modern central bank, according to established research and practical experiences.

As the balance sheet increases in size, the potential costs increase in terms of market functioning, risks to financial stability, and the path of future remittances to the U.S. Treasury. Second, there is a limit on how far the expectations channel can be exploited. As I discussed earlier, since the current FOMC cannot bind future FOMCs and the economic outlook is highly uncertain, it isn’t reasonable to expect that policies that affect expectations many years in the future will have a powerful impact today. I believe that the effectiveness of the expectations channel decays as the length of the horizon extends. Third, monetary policy is only one leg of the stool necessary to generate a vibrant and sustained economic expansion. In particular, as noted earlier, the health of the financial system is critical. For without it, the monetary transmission channels will be impaired and monetary policy will be less effective in influencing the cost and availability of credit. Similarly, it is critical that fiscal policy be set appropriately. This means the short-term impulse needs to be properly calibrated to the current set of economic circumstances (not  9  With respect to borrowing costs, this is particularly true in real terms. BIS central bankers’ speeches  7  too much restraint) and the long-run budget trajectory needs to credible and consistent with fiscal sustainability. Finally, removing structural impediments that hinder growth and economic rebalancing are also important.
Transition experience so far has shown that high trade deficits were not just financed through official capital flows, which undoubtedly have played a key role, but also through remittances that have increased financing opportunities within current account. During the period 1994 – 2004, out of 6.3 billion USD current transfers that entered the country, 5.8 billion is estimated to be contribution of Albanian emigrants. economic developments. Although during the first stage of transition, inflationary and depreciation expectations were high, monetary policy reaction by the Bank of Albania of  1/5  keeping high (Lek) interest rates, ensured a normal inflow of remittances in Albania. Between 1994 and 1996 the attraction of foreign exchange inflow was further boosted by extraordinarily interest rates offered by pyramid schemes, reaching a historical peak level in 1996. A considerable drop in the volume of remittances was recorded during 1997 and 1999, a period characterized by a political and social unrest.1 With the return of serenity remittances inflow picked up again. The Bank of Albania estimations indicate that total workers’ remittances has reached around 1,028 million (one billion) of USD or 13.5 percent of GDP. This is main country export. Furthermore, remittances are estimated to be three times higher than foreign direct investments (FDI) inflow and its value exceeds by far official aid from abroad. I want to concentrate a bit more on the mechanism of transfers and on the ways remittances are used.

Migrants and/or their relatives being more familiar with the local economic and social environment could make a better use of the capital brought into the country than foreign investors. Nowadays this is not just a theoretical inference. A growing number of emigrants that fled during 90s, are returning and funds but also a lot of know-how. 2  A survey carried out with the assistance of the International Organization of Migration (IOM) in Albania and CARDS project. The questionnaire period comprises April-June 2005. 3/5  However, there is always another side of the coin. Remittances inflow might have negative effects as well. If the recipient country remains dependant on money transfers, it will encourage further migration of labour by reducing the effectiveness of investments of domestic and foreign investors because of the unstable workforce. What's more important, if remittances go mainly for financing imports, their impact in the development of the domestic economy drops significantly. I fear Albania is one of these cases. Remittances are being mainly used to secure daily family needs and to improve life style, as well as to construct or reconstruct houses, and to finance traditional family ceremonies. Only a small portion goes into banks as saving deposits. In fewer cases, remittances have been invested in real estates, manufacturing or services and agricultural sectors. This distribution of remittances alleviates poverty but does not lead to new job creation via investments, which would prevent new emigration by generating local opportunities.