samchain/econo-pairs-v1 huggingface dataset:
That divergence in levels of productivity has, in turn, translated into divergence in levels of GDP per head across countries over the same period. 66  The process of livings standards catch-up has stalled, possibly reversed. And the reason for that appears to be a slowing in rates of technological diffusion. If there has been a slowing in rates of technological diffusion across countries, is the same potentially true within countries? Evidence using micro-level company data within countries suggests it is. Research by the  63  Comin and Mestieri (2013a). Comin and Mestieri (2013b). Baddeley (2006). 66 Comin and Mestieri (2013b). 64 65  18  All speeches are available online at www.bankofengland.co.uk/speeches  18  OECD suggests there has been a slowing in rates of technological diffusion across firms in a number of countries. 67  Put differently, there is a long and lengthening lower tail of companies failing to keep pace with  the technologies used in frontier companies. Their productivity performance has fallen ever-further behind. This widening dispersion in the performance of upper and lower tail companies appears to be a particularly acute in the UK. To a greater extent than elsewhere, it appears that the UK is a tale (or tail) of two companies. At the upper end, the UK seems to have as many high-productivity companies as its main competitors (Chart 8). That fits with the UK’s standing as a global innovation hub, with world-leading companies and universities and high indices of innovation by international standards.

In my experience, central bankers tend to emphasise the former – and this has certainly been the way QE has been expressed at the Bank of England – whereas market participants tend to emphasise the latter. This framework illustrates how ‘stock’ (‘announcement) and ‘flow’ (implementation) effects can be present and suggests how they interact with one another. And third, this framework illustrates how the impact of QT (or QE) on asset prices is state contingent – that is, it depends on the environment created by the economic situation and market conditions. This was another important conclusion of the Bank survey paper. When markets are functioning well (and substitutability between money and bonds is high), QT has a smaller overall effect on asset prices than when markets are functioning poorly. This is in line with the strong impact of QE at times of market stress in 2009 and 2020 relative to its impact in other more benign market environments. More subtly, in better functioning markets, a greater proportion of the impact of QE comes via the announcement / ‘stock’ effect relative to the implementation / ‘flow’ effect, even though the overall impact is more moderate. What implications do these results have for any implementation of QT? My starting point is that were QT to be implemented, it would be desirable to do so in a manner consistent with keeping Bank Rate as the ‘active instrument’ of monetary policy, in line with current practice.
The number of newly-granted early retirements rose sharply from 1997 onwards. In recent years, this increase has been particularly large with regard to people under the age of 50.2 The percentage of those participating in the labour force has fallen from around 88 per cent at its highest point in 1990 to about 82 per cent today. The fact that such a high percentage of people of working age are outside the labour force will limit growth in the future and will contribute to further exacerbating the problem of an ageing population. Figure 6 shows both the percentage of employed actually working and the mean working time for people in work.3 As you can see from the Figure, developments in these factors also vary according to the economic cycle. During the boom at the end of the 1980s, the number of hours per person rocketed while the percentage of people in work declined, partly due to a growth in sick leave. Many studies have indicated that there is a link between total absence due to sickness and the situation in the labour market. When the situation in the labour market improves, absence due to sickness increases, and vice versa. However, this relationship does not seem to apply to long-term sick leave, which is the type of sick leave that has increased most in recent years. How to resolve this is another subject much debated at present.

Stefan Ingves: Policy rate setting and the monetary policy steering system Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at Handelsbanken, Stockholm, 28 April 2008. *  *  *  During the autumn and spring the international financial markets have been marked by considerable uncertainty and turmoil. The situation has caused several central banks to take extraordinary measures, while for instance the Riksbank has not seen any reason to do so. One reason why central banks have acted differently is that the financial crisis has affected different countries to differing degrees. In Sweden we have not observed any major problems as a result of the financial crisis. This is linked to the fact that Swedish banks have not been exposed to the US subprime market to any great extent. Nor has there been any distrust of Swedish banks, which have a good capacity to deal with unexpected negative events. Ultimately, it is a question of a broad view that Swedish banks do not have problems. Another reason why central banks have acted differently is the differences in monetary policy steering systems between countries. It is therefore important to create an understanding of how the Swedish monetary policy steering system works. In my speech today I will talk about monetary policy from the production of the background material for making a decision until the decision has been implemented. I will focus on how an interest rate decision is put into practice.
Paul Tucker: The debate on financial system resilience – macroprudential instruments Speech by Mr Paul Tucker, Deputy Governor for Financial Stability at the Bank of England, at Barclays Annual Lecture, London, 22 October 2009. *  *  *  What stage have we reached in the current financial and economic crisis? The stage where the most hideous macroeconomic nightmare – a second Great Depression revisited – is now probably remote but where the outlook remains highly uncertain by any normal standard. Where the banking system is recovering, but where some big UK (and overseas) banks have a lot left to fix. And where there has been real progress with many policy initiatives to make the international financial system more resilient in future, but where perhaps some of the biggest issues remain unresolved, even incompletely articulated. After some scene setting, I will address one of those issues this evening: whether there might be macroprudential instruments that could lean against and preserve banking system resilience in the face of credit boom and bust. I will also provide an update on international plans for banks to produce recovery and resolution plans, known here as Living Wills. The macrobackdrop and the credit system At the beginning of this year, 1 I thought it would take until the autumn at least to tell whether the economy was going to lurch downwards into a spiral of falling prices, rising real debt burdens, generally enfeebled banks and falling output.

Speaking as chair of the Financial Stability Board’s working group on the resolution of crossborder firms, I can update you on the work already in train. Basically for the top roughly 25 banks and dealers, the authorities will work with them over the next 6-9 months to produce recovery and resolution plans. The effort will build on the existing supervisory colleges, but typically at a more senior level, and involving resolution authorities and central banks as well as line supervisors. After official level exchanges, there will be engagement with those firms, also at a senior level (say group CFO). The desired outputs will cover two things. First, recovery plans for “de-risking” a group where it can and should be maintained as a going concern. Second, a resolution plan when a firm needs to be wound down and put to rest, but with essential economic functions maintained somehow. The FSA has explained their contribution to the exercise. No one should think that this will be easy; or that anyone in the official sector is naïve about that. It will, in fact, be formidably difficult. The process is, for that very reason, designed to flush out the issues, so that they can be properly debated and reviewed.
To that end we have raised required reserve ratios to control the rapid credit expansion by restricting the supply of loanable funds. Another issue we considered is lengthening the maturity of capital inflows. This is important for improving the quality of capital account, limiting maturity mismatches, and avoiding exchange rate misalignments. To this end, we lowered the policy rate and widened the corridor between overnight borrowing and lending rates so as to create some extra volatility in the short-term interest rates. Although it looks quite complicated at first sight, the framework we adopt in spirit is not significantly different from the conventional inflation targeting framework. The only difference is that, previously our policy instrument was the one week repo rate, but now our instrument is a “policy mix”—which consists of a combination of short term interest rates, reserve requirement ratios and interest corridor. We seek to use these instruments in right combination in order to cope with both inflation and macro-financial risks. The monetary policy stance in this framework is not only determined by the path of policy rates, but as a mixture of all policy instruments outlined above. Just like the conventional inflation targeting framework, the policy is forward looking and contingent on the economic outlook. The exact  4  BIS central bankers’ speeches  setting of the policy mix depends on the factors affecting price stability and financial stability. Although it is too early to assess the success of these policies, initial impact so far seems promising.

Durmuş Yilmaz: Expectations in global economy Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the Leaders of Change Summit, Istanbul, 15 March 2011. *  *  *  Distinguished Guests, It is a great pleasure to speak here at the Leaders of Change Summit that has gathered politicians, decision makers, journalists, economists and bureaucrats who have played prominent roles in their fields and inspired societies across the world. Today, I will share my thoughts regarding the outlook of the global economy and the challenges faced by the emerging market economies in the aftermath of the crisis. Then, I will discuss the role of central banks in this new era. Finally, I will conclude my remarks with the experience of the Turkish economy and the response of the monetary policy. Distinguished Guests, More than two years after the collapse of Lehman Brothers, the dust over international financial system seems somewhat abated. Unprecedented measures taken by central banks and fiscal authorities have put financial markets back on a relatively steady course by late 2009. As economic activity has started to gain pace, risk perceptions gradually improved, notwithstanding heightened sovereign risk in the Euro area, concerns over housing and labor markets in the United States, uncertainty regarding the health of financial institutions in advanced economies, huge influx of capital flows and associated risks in emerging market economies, and last but not least, questions surrounding the pace of demand rotation in the global economy.
Demand for goods was high during the pandemic, underpinned by expansionary monetary and fiscal policies. At the same time, the pandemic led to supply chain disruptions. In sum, these factors have led to rapidly rising prices for globally traded goods. Freight rates have also risen sharply. Supply problems have been amplified by Russia’s invasion of Ukraine. The invasion has also led to soaring energy prices. Gas and electricity prices have continued to increase through summer and could push up inflation abroad in the short term. Other prices, some of which rose sharply following the invasion, have recently edged down. These include oil prices and prices for metals and agricultural products. Global supply chain disruptions also appear to have eased somewhat. Because of the high level of inflation, central banks in many countries have raised policy rates and signalled further rate increases ahead. Several central banks have raised rates by larger increments than usual. High inflation and rising interest rates could dampen growth among many of Norway’s trading partners ahead. In Norway, prices for many imported goods have risen sharply. But external developments are only part of the story. The rise in prices for domestically produced goods and services has also accelerated in recent months. One of the main reasons for this is the pressures in the Norwegian economy. Chart: The labour market is tight We feared for some time that unemployment would become entrenched at a high level in the wake of the pandemic.

The new Law replaces the standard insolvency proceedings of a bank with the resolution undertaken by the relevant authority. Banks’ failures and financial crises may be common events. They are very costly, as well, which, in some cases, can be as high as 40–60% of the Gross Domestic Product. This includes losses in deposits, weakening of access to finance and loss of public confidence in the financial system, which, in turn, reduces its capacity to support economic growth and decrease poverty. Also, standard insolvency 1/5  BIS central bankers' speeches  proceedings for failing banks proved inadequate in times of crisis because they did not address systemic risk nor ensured the continuity of critical functions; moreover, they did not protect depositors. These procedures require time, long negotiations as well as complex arrangements with creditors, which may damage and further diminish the asset value of the distressed bank, hence causing severe consequences for the real economy. For this purpose, the new Recovery and Resolution Law provides the Supervisory and Resolution Authorities with the legal capacity and the necessary instruments for restructuring bank operations, in the event its possible failure jeopardizes financial stability or undermines other objectives of the regulator. The aim is clear: on the one hand, we have the public interest on financial stability, while, on the other hand, remain the shareholders of the bank, who have voluntarily undertaken the risk by investing in the bank.
But, it should be stressed that throughout survey vintages, a rebalancing of the 4  CESEE Bank Lending Survey, European Investment Bank. sources of financing was visible. Given the deleveraging of the international banks present in the region, the intra-group financing which was receding was substituted with local funding. Easy access to retail and corporate deposits was reported as a feature in the second half of 2015, and the first half of 2016 as well. Chart 4: Average annual credit growth Annual credit growth in %  70  average 2005-2008  60  average 2009-2012  average 2013-2016  50 40 30 20  10 0 -10  SLO  SRB  ROM  POL  MKD  LIT  LAT  HUN  EST  CZR  CRO  BUL  BIH  ALB  -20  Source: Central Banks’ internet pages. In light of the rising importance of local funding as a source of financing for the banking systems in the region, and hence as a basis for further credit revival, one important aspect is the impact of low interest rates on the savings in the banking system. The dynamic observance of the deposits rates in the banking system of the region reveals a large downward adjustment of the yield on deposits, both for corporates and for households.

There have been volte-face, for example, on bank bailouts and the necessity for them, on the need to relax monetary policy in Europe, on the state of the EU financial sector, on the no-state-bailout clause, and on the sufficiency of the current Greek package. In addition, several false myths have been propagated, for example on the consequences of Greek bankruptcy for the German and French banking sectors and on the need for the ECB and central banks to have positive equity. In fact, numerous central banks have negative equity yet have no problems operating if they are credible enough. The real capital of a central bank is its credibility and reputation, not a figure on its balance-sheet. Credibility and reputation are virtues that thrive on consistent and credible policies and communication. Another myth is that the eurozone cannot survive a Greek default. Why not? Is it insolvent? Are there significant trade dimensions between Greece and the eurozone? According to available DTCC data – which is incomplete but very probably covers the majority of cross-border transactions – even CDS that are now so often mentioned should not present a systemic problem for the European financial system. Note that CDS on Greek debt are higher than a year ago, but the euro is stronger than at the peak of last summer’s Greek crisis. The markets do not appear to think that Greece is that fundamental to the survival of the eurozone. Finally, it is implied that if we solve the debt problem, Greece and Portugal are saved.
Determining what might have happened if the authorities had acted otherwise is no easy task. Allow me to present a hypothetical example: The central bank thinks financial imbalances are building up, and the Executive Board sets the key rate higher than it otherwise would have done. While a financial crisis does not actually materialise, unemployment rises and economic growth slows. Inflation could fall below target. In this situation, it may be difficult to assess whether the Board made a good decision to raise the key rate. Such assessments of motives and outcomes are also the subject of moral philosophy and its discussion of what constitutes a good decision. In setting the key rate, both intentionalist and deontological ethics will provide us with the same guidance as to what good decisions are. In both cases, the decision must be based on achieving the objective of monetary policy, and  35  A fundamental principle of criminal law is that a person can only be judged if that person can be charged with a criminal offence and is proven guilty. There are two forms of guilt: One is guilty with intent, which typically means that the offender intended to produce the negative outcome. The other form of guilt is negligence, which somewhat simplified implies a failure to use reasonable care or prudence. In determining whether an offender has acted with negligence, his behaviour must be measured against ordinary reasonable and prudent behaviour in a comparable situation. A Supreme Court ruling from 1984 provides an illustration of negligence consideration.

One of the most important and immediate consequences would be impact on trade finance which is a critical issue for emerging economies and Asia. This is because our economies and financial structure is more dependent on it, compared to some western economies. Let me elaborate. International trade is a major driver of GDP as our export is part of the global and increasingly integrated regional supply chain. However, many of our exporters are SMEs not large conglomerate. These local SMEs rely on bank financing, as our financial system remains more bank-based than market-based. Supplier of trade financing is still banks in western countries, especially European banks. The deleveraging of European banks can reduce the supply of trade financing and impact growth and development. To address this, it is important that Basel Committee recognizes that trade financing has relatively large impact on Asia, compared to the western economies for which Basel III is mainly geared. Treatment of trade financing in leverage ratio framework will create incentive for banks to shift away from trade financing towards other types of financial transactions, including derivatives which have lower impact on leverage ratio, but can earn higher return. This is because they are assigned lower credit conversion factor even though trade financing is less complex, more familiar, has low liquidity risk as they are self-liquidating, and most importantly, it clearly serves real sector. We believe these rationales argue for a more appropriate treatment of trade financing to ensure that the Basel III framework is appropriate for Asia.
Stemming mostly from the lack of demand from China and other developing economies, this trend caused import prices in the Turkish economy to BIS central bankers’ speeches  7  recede in USD terms. Therefore, we made downward revisions to assumptions for crude oil prices and USD-denominated import prices With regard to annual averages, we reduced crude oil price assumptions from USD 54 to USD 37 for 2016. Also, we revised the assumptions for annual percentage changes in average import prices downwards by 4.9 points for 2016. We revised the assumed inflation for food prices upwards from 8 percent to 9 percent for 2016 due mostly to the effects of minimum wage adjustments on costs and demand (Chart 19). Chart 19. Revisions in Oil and Export Prices* Oil Prices* (USD/barrel)  * Shaded area indicates the forecast horizon. Source: Bloomberg, CBRT. Import Prices* (USD, 2010=100)  * Shaded area indicates the forecast horizon. Source: Bloomberg, CBRT. Effective as of January 2016, some items with administered prices saw price increases. We estimate that the additional effect on the year-end inflation of the portion of these increases that remain above 5 percent will be 0.4 points in 2016. In turn, we monitor meticulously how the rise in the minimum wage will affect the budget balance and tax adjustments.

In short, of the total change in the year-end inflation forecast for 2016 compared to the previous reporting period, 1 point stemmed from the minimum-wagehike, 0.4 points from administered price changes that are over and above the inflation target and 0.2 points from the rise in the underlying trend of inflation. Meanwhile, the revision in the assumptions for TL-denominated oil and import prices had a downward effect by 0.6 points. In addition to these forecasts, we discuss alternative scenarios on the inflation outlook and the global economy in the Risks section of the Inflation Report. You can examine the Report for details. While concluding my remarks, I would like to thank all my colleagues who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. BIS central bankers’ speeches  9