samchain/econo-pairs-v1 huggingface dataset:
4 [14]  Monetary policy also seems to have had the desired effect on inflation and inflation expectations. The upturn in inflation that began in 2014 has continued, and the downward trend in long-term expectations has turned into an upward trend since the beginning of 2015. Another sign that the expansionary monetary policy has had an effect is that we have had strong economic activity in Sweden. Growth has been high and employment has increased. Monetary policy's distribution effects are difficult to disentangle At the same time as the expansionary monetary policy has contributed to the economic upturn, asset prices have risen. They can be affected by monetary policy through several different channels. Lower policy rates mean that bond yields become lower, at the same time as prices of bonds rise. If the central bank also purchases bonds, this puts further downward pressure on yields and further upward pressure on prices. Those selling the bonds to the central bank may also wish to adapt their portfolios and buy other assets, which means that the prices of these assets will in turn rise. The central bank can also, by means of various types of communication on monetary policy, make it clear that the expansionary policy will continue for a longer period of time, which can contribute to a more positive view of activity in the economy. This can in turn contribute to asset prices rising. The Riksbank and other central banks are well aware of all of these channels.

We have gone through a long period where inflation has been low and central banks around the world have struggled to bring inflation back up to their respective target levels. One might therefore think that the question of monetary policy’s distributional effects has become topical because inflation has been higher than expected, which has benefitted some groups at the cost of others. But this is not actually the main reason; instead it is the efforts the central banks have made to increase activity in the economy and to bring up inflation. Low interest rates have contributed to a rapid rise in prices of shares and other assets, both financial assets and real assets. This effect in itself should be inconspicuous. Asset prices normally rise when interest rates fall, which occurs in periods when monetary policy stimulates the economy. However, recent years have been special in many ways. Apart from policy rates being low for an unusually long time, the Riksbank and other central banks have also used other methods to further push down the general interest rate level, for instance purchases of government bonds. The monetary policy measures have affected asset prices in a more direct and visible manner than the conventional policy of interest-rate cuts. This has contributed to more discussion of the distributional effects of monetary policy.
This presupposes that there are not many different types of money in circulation that can give rise to different ways of expressing prices. There must quite simply be a standardised measure in the same way as the meter system for measuring distances. Secondly, money must be able to function as (2) a store of value, with a relatively stable value over time. This is needed because saving is a means of postponing consumption until a later date. Thirdly, it shall function as (3) a means of payment, that is, it shall transfer a value to the recipient, who can then use it to pay someone else. This requires that we have easy access to money when we need it and that the instruments we use as money can be comfortably transported with us. It is here that technological advances entail changes. The money we use must have the general public's confidence There is a further element that is essential for money and the entire monetary system to function: the general public's confidence. All those who have entered into agreements entailing money should rely on them holding. The money must retain its value over time and be accepted by everyone. Having said this, it is easy to understand why central banks were created once upon a time and were given the central role in the monetary system that they have now.

Digitalisation driving development The rapid decline in the use of cash in Sweden is part of a broad digitalisation trend that affects society as a whole. Technological advances have given us, for instance, new more efficient payment solutions such as real-time payments with the Swish mobile application, which is used for transactions that used to be mostly cash-based. Similarly, mobile phones can function as card terminals, which gives small business owners increased opportunity to accept cards. Swedish banks also have a tradition of cooperating with one another when innovative payment solutions are introduced on the market. In this way, they can make better use of network effects and more quickly attain a critical mass of users. Moreover, Sweden has a highly-educated population that is willing to adopt innovations in the IT field. Technological advances that lead to more efficient payments, cooperation between producers of services who make it possible to fully utilise the network effects, changed consumption patterns and a technology-friendly population are a powerful combination when it comes to creating changes in payment habits! In an international perspective, Sweden and the other Nordic countries are way ahead in this change process. However, the trend is global – an increasing number of people want to use digital solutions to pay and fewer want to use paper-based payments, including banknotes and coins. In particular, the younger generations are quick to adopt digital technology. It is probably therefore only a question of time before more countries find themselves in the same situation as we have in Sweden today.
It is clear, however, that the ambitions of most countries still fall short of the requirements in the Stability and Growth Pact. This is certainly attributable in part to the economic slowdown, with Italy as the clearest example. But it is also notable that the ambitions for budget consolidation are now lower than before the move to Stage Three. The relatively good growth during 1998 ought to have left room for budget consolidation in many countries but it was not used and in certain countries the structural deficit has actually increased. The Ecofin Council has in fact criticised a number of countries, including Germany, France, Austria and the Netherlands, for the low level of ambitions in their stability programmes. In Sweden, the budget position looks comparatively healthy. Our fiscal policy is likewise less restrictive than before but the structural deficit has been turned into a surplus that is now growing and the ambition is still to achieve a budget surplus of 2 per cent of GDP on average over the business cycle. At the same time it should be underscored that some variation in the objective across countries seems reasonable. The degree of fiscal readiness — and thus the requisite size of the surplus — depends on a number of factors. One is the cyclical sensitivity of government finances and another is the level of government debt. It is then reasonable that a country like Sweden has a larger public sector financial surplus than a country where the automatic stabilisers and government debt are smaller.

Their downgrading to junk bond status sent a small shockwave through the relevant market segments; other segments have so far remained largely unaffected, however. The credit risk premiums of other corporate debtors rose only slightly and have remained at a historically low level (cf. Graph 2). Meanwhile, those of emerging markets have developed in line with the economic fundamentals of their respective countries. 2. Investment policy  A large proportion of the SNB’s assets comprise currency reserves. An internationally accepted means of payment in crisis situations, they serve as a safety net for the Swiss economy and the Swiss franc. In order to fulfil this function, these reserves need to be invested in foreign currencies – primarily in the reserve currencies such as the dollar and euro – and in gold. The Bank’s leeway for investment was extended considerably with the entry into force of the new National Bank Act in May 2004. This has allowed the SNB to invest part of its currency reserves in foreign equities and corporate bonds. In mid-February 2005, the SNB – having already invested in corporate bonds since June 2004 – turned its attention to the expansion of its equity portfolios. At present, a little over CHF 3 billion are invested in internationally diversified equity portfolios. As the equities are index-managed by external asset  BIS Review 46/2005  1  managers, the SNB takes no active decisions regarding the weighting of individual sectors or securities.
Low growth in total factor productivity continues to be expected, which is supported by its consolidation of a downward trend (figure 12). Our neutral MPR estimate puts it at 3.75%, within a range between 3.5% and 4%, equivalent to a 25 basis points increase from our previous estimate. This hike is consistent with the recent reversal of neutral rates in other economies, which reversed the downward trend of global rates. 5  Our projections In the central scenario, headline inflation is projected to keep declining in the coming quarters, converging to the 3% target in the second half of 2024. Core inflation will decline somewhat more slowly, reaching 3% by the end of 2024. The trajectory we are forecasting for inflation is somewhat above our estimate in the last MP Report. By the end of this year, with the information available on 30 November, we projected annual inflation of 12.3% (12% in September). For 2023, we project headline inflation to average 6.6%, ending the year at 3.6% (6.1% and 3.3%, respectively, in September) (figure 13). This revision considers the surprise accumulated in recent months and a slower decline in the real exchange rate over the projection horizon. The real exchange rate will hover around its current levels for a few quarters, contributing to the adjustment of macro imbalances, and then will begin to decline, in line with the evolution of the economy and its fundamentals towards long-term stability. The convergence of inflation continues to rely on the economy continuing to adjust.

In its deseasonalized series, non-mining GDP fell by 0.8% from the previous quarter, its second consecutive quarterly decline. The performance of trade, which fell 2.8% in the quarter, stands out in this result. Entrepreneurial services were the exception, rising 1.1% in the period. With this, it continues with the growing trend that it has been showing for several quarters, explained by the outsourcing of activities. The October Imacec confirmed the downward trend of non-mining activity, with a seasonally adjusted 0.4% decline month-on-month (figure 5). On the demand side, in the third quarter, gross fixed capital formation (GFCF) performed significantly better than expected. This result was driven by investment in renewable energies and other particular sectors. The latter included the impact of engineering works associated with the terminal phases of mining projects and one-off factors such as bus imports. In any case, the outlook for investment remains weak. The latest survey by the Capital Goods Corporation points to declining investment amounts during the 2022-2025 period. At the same time, business expectations remain pessimistic. The slow dynamism of the housing sector also stands out. However, long-term interest rates and local uncertainty levels have fallen in recent months, which could be of some help for the future path of investment (figure 6). Private consumption continued to adjust in the third quarter. It is worth noting the new drop in durable goods, whose deseasonalized series fell 3.8% with respect to the previous quarter.
Despite oil prices more than tripling from the beginning of 1999 to the end of last year, inflation expectations stayed at the Riksbank’s target. If expectations also increase, monetary policy must be made considerably more stringent to expel inflationary expectations from the economy. From this point of view, it is important that monetary policy is reviewed and that a discussion takes place on the Riksbank’s actions, although the importance of the bank should not be exaggerated. Having said that to provide a perspective on the tasks we have at the Riksbank, I should like to move on to discuss the economic situation in Sweden. Favourable growth During the past three years, GDP has increased in Sweden by an average a bit more than 3.5 per cent. The rate of growth is increasingly higher than what is possible in the long term. The Swedish economy has expanded approximately a half per cent more quickly per year than the euro area in the past four years, although over one per cent more slowly than in the United States during the same period. BIS Review ? ?/2001  1  Strong foreign trade has made a positive contribution to growth in Sweden for large parts of the 1990s and since 1994, the current account has been in surplus. The weak exchange rate for the krona throughout almost the whole of this period with a floating exchange rate, combined with the vigorous growth in the telecommunications sector have been the driving forces underlying the increase in exports.

However, there is also a risk that uncertainty about the future of the Swedish economy will result in households reducing consumption. At present, household’s financial savings are insignificant. In this respect, the situation is similar to the United States although the problems there are more serious. Uncertainty about the development of the krona remains great, however. There is general agreement that the krona is fundamentally undervalued – this has contributed to creating the surplus in the current account that has reduced our foreign debt in recent years. When the foreign debt starts to reach levels that are more sustainable in the long run, the krona should be strengthened. There is thus no reason to depart from the Riksbank’s assessment that the krona will appreciate in the long term. However, asset prices and exchange rates are sensitive to changes in expectations. And just now it seems that the krona is being weakened by the focus on the foreign exchange market on the expected capital outflows, which will be the result of pension funds being invested abroad. Reduced interest in purchasing Swedish shares is considered by others to be the explanation why the krona is so weak  BIS Review ? ?/2001  5  just now. During the years with a floating exchange rate, we have noted short-term fluctuations in the exchange rate do not seem to have any great effect on domestic prices. There is only an effect on prices if businesses believe that changes in the real exchange rate will be of some duration.
The other scant quantitative indicators that are still available for the quarter, such as new car registrations or the retail trade index, on the demand side, and the industrial production index, on the supply side, tend to confirm the loss of momentum in activity. Among the confidence indicators, the August PMIs show signs of moderation in both services and manufacturing. Manufacturing, in particular, evidences the decline in new (both internal and external) orders. Industrial activity has continued to be weighed down by global supply problems (which are affecting the automotive sector above all) and by the escalation of input prices since 2021 H2 (which have affected a very high number of products). Economic projections have been revised down notably for growth and up for inflation The latest ECB projections for the euro area, in contrast to those published in June, include, in particular, new developments in the gas market. First, gas prices were revised up in accordance with developments in the gas futures markets. Second, and for the first time, a degree of gas supply rationing, albeit moderate, is assumed. This would be more significant in the countries that are more heavily dependent on Russian imports, which could even see some production cuts in the winter. By contrast, demand for gas is expected to decline. Euro area economic activity is expected to slow in the coming quarters, as a result of the loss of purchasing power stemming from higher-than-expected inflation, the decline in confidence and, in general, greater uncertainty.

Spreads and volatility have also been lower for longer, although there is some market discrimination between agents and between emerging market economies (EMEs), as well as periodic spikes in volatility, especially recently. Next, why are inflation or interest rates so low and how does this impact policy? First puzzle: inflation remains low in countries where unemployment is close to the NAIRU, like the USA, or where the output gap has been sharply reduced, like Germany; this may imply that the Phillips curve has a lower slope too. Yet, various studies by the IMF or the BDF show that, even if slopes have tended to flatten since the early 1990s, there has been no clear-cut change over the last years. BIS central bankers’ speeches  1  There are two possible explanations. The benign one is that transitory disinflationary shocks, e.g. due to commodity prices, temporarily shift the Phillips curve downwards. The worrying one would be a disanchoring of long-term inflation expectations, threatening the objective of price stability; such a disanchoring is suggested by the surprising correlation between spot oil prices and market expectations derived from inflation-linked swaps up to 5 years in 5 years. People can reasonably differ in their interpretation; hence the scope for healthy policy debates. As regards low policy or market rates, these are mainly seen as reflecting lower equilibrium, or neutral, interest rates. This leads us to the second puzzle: does the lower neutral interest rate result from cyclical or structural factors?
Qualifying high-growth and high value-added financial activities will enjoy a concessionary tax rate of 5%, while a 10% rate will apply to tax-sensitive but mature activities. We have also enhanced incentives for specific activities, such as fund management, trustee and custodian services, insurance and capital market and treasury activities. We also undertook a fundamental review of the Central Provident Fund (CPF) Scheme, which is our social security and pension fund scheme. We refocused the CPF on its core objective of providing for the basic needs of the majority of Singaporeans, in terms of retirement needs, healthcare expenses and home ownership. We are tightening the use of CPF for buying properties, so as to leave more for retirement needs. We are reducing the coverage for high-income Singaporeans, who should be able to plan and provide for their own retirement. We are lowering contribution rates for older workers, who are most vulnerable to losing their jobs. These measures will make our labour market more flexible, and contribute to our economy’s overall resilience and competitiveness. Second, we want to encourage entrepreneurship in order to develop more local and foreign start-ups and emerging enterprises to complement our strong base of MNCs and established local companies. In this rapidly changing, unpredictable environment, the best way to spot and exploit new opportunities is not by centralised direction, but through the drive and entrepreneurship of our people. According to the 2001 Global Entrepreneurship Monitor Report, Singapore ranked 27th out of 29 countries in terms of entrepreneurial activity. We need to do better.

William C Dudley: Lessons at the zero bound – the Japanese and US experience Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at the Japan Society, New York City, 21 May 2013. *  *  *  It is a pleasure to have the opportunity to speak today at the Japan Society.1 Our countries have very close relations and this is particularly true at the central banker level. I just got back from the BIS last week where I had a chance to spend some time with Governor Kuroda. Today, I will discuss the challenge that we both have been working to solve – how best to conduct monetary policy when short-term interest rates are already pinned close to zero, but the economy is still operating well below its potential. This has required considerable learning. After all, until Japan’s experience began in the 1990s, no major country had actually faced this problem since the Great Depression of the 1930s. As the first nation to experience the zero bound in modern times, Japan was an early pioneer in developing unconventional tools and strategies. Its experiences, both good and bad, along with lessons from other periods such as the Great Depression, have helped to inform the policies adopted by the United States (U.S.) and other nations in recent years.
2/3  BIS - Central bankers' speeches  One area of promise is the voluntary carbon credit market. It is expected to play an increasingly important role, especially in Asia. The demand for credits will come from sectors where it is quite difficult to reduce emissions due to prohibitively high costs or the lack of proven technology. At the same time, activities like reforestation, mangrove restoration, and the early retirement of coal-fired power plants can potentially generate good carbon credits. We will showcase efforts by Singapore to work with global stakeholders to foster a sound and vibrant voluntary carbon credit market in Asia. This Pavilion is a result of the close partnerships among Singapore businesses, NGOs, academics, civil society groups, and the government. Please also join me in expressing appreciation to the organising team. I wish you a fruitful time at the Singapore Pavilion and at COP27. 3/3  BIS - Central bankers' speeches

More than half of Turkey’s population is under the age of 30. However, unemployment rate for the young population stands at 21.2%. In order to unleash our potential, we need to keep investments at high levels and utilize human capital effectively. Since domestic savings rate in Turkey is not high enough to finance investments, we need to attract foreign savings, which implies having  BIS Review 79/2008  1  current account deficit. But the good news is that the quality of financing has improved significantly in recent years. The FDI inflows were more than USD 20 billion in each of the last two years. Nevertheless, I should say that ratio of greenfield FDI to the total FDI is relatively low yet. I believe that the greenfield FDI will also increase in the following years as we keep the macroeconomic and political stability in place and continue to improve the business environment. The second comparative advantage that I would like to underline is the convergence story of Turkey to European Union. Steps taken during the negotiation process will undoubtedly increase the momentum of Turkey and help unlock the growth potential of the country. European Union membership is our medium-term anchor and all parties in Turkey should adhere to this aim decisively. Dear Guests, The best way that a central bank could support sustainable growth is reaching and maintaining price stability, especially in a country that experienced high and chronic inflation for decades. As you may know, Turkey has adopted the full-fledged inflation-targeting regime in 2006.