samchain/econo-pairs-v1 huggingface dataset:
Dealing with an asset price bubble with monetary policy is not that simple. 2  For expositions of monetary policy implementation at the lower bound, see Bernanke and Reinhart (2007), Bernanke (2009) and Murray (2009). 3  For evidence in the U.S., see Galí and Gambetti (2009) and for emerging markets, De Gregorio (2008). BIS Review 76/2010  3  This view is particularly problematic in small open economies. The increase in valuation of asset prices in these economies is usually the result of a large exchange rate appreciation coupled with large capital inflows. Attempting to stabilize asset prices with monetary policy could be counterproductive, since an increase in interest rates to contain the rise in asset prices could induce greater inflows and carry trade operations that might end up appreciating the currency even further. As to the role of central banks in financial stability, the change should come not in the need to have this mandate but in how we define it and the priority given to it. We must bear in mind that central banks have played a historical role in the stability of deposit taking banks. However, the current crisis shows that we need to carefully revise this narrow definition of financial stability, or at the very least recognize that it is impossible to safeguard deposit taking banks without ensuring the adequate functioning of other key markets or financial intermediaries. Defining and monitoring “financial stability” is a difficult task.

BIS Review 98/2009  80  85  90  95  00  05  10  Source: Robert J. Schiller, Princeton University  11  9. Signs of a turnaround Purchasing managers’ index, index above 50 indicates growth 70  70  65  65  60  60  55  55  50  50  45  45  40  40  35  35  30  30  Sweden Euro area USA  25  25 20  20 00  01  02  03  04  05  06  07  08  09  10  Sources: Institute for Supply Management, NTC Research Ltd and the NIER  10. Consumer prices euro area Annual percentage change 5  5 CPI  HICP excluding energy  4  4  3  3  2  2  1  1  0  0  -1  -1 00  01  02  03  04  05  06  07  08  09  10  Sources: Eurostat and the OECD  12  BIS Review 98/2009  11. GDP abroad Annual percentage change  2008 5,1 5,6 7,3 9  Brazil Russia India China  2009 -1,3 -6,5 5,4 7,5  2010 2,5 1,5 6,5 8,5  Source: IMF July 2009  12.
They are helping the economy to gradually increase its resilience, by significantly increasing the diversification of the production and the export structure of the economy, but also by yielding positive second-round effects, improving the labor market conditions, increasing the know-how, integrating domestic suppliers in the production process. Secondly, the economy has been impacted favorably by the fiscal stimulus in the infrastructure, an area continuously being pinpointed as a weak spot, when it comes to the structural competitiveness. Hence, albeit the fiscal impulse does have positive short run effects on growth – bridging over the current “anemic external environment”, it also affects the long-term potential of the economy. The solid economic recovery is significantly improving the labor market conditions, increasing the labor demand, reducing the unemployment, positively impacting the participation rate, but also boosting the productivity growth of the economy. As being largely export and investment-led, the solid growth does not create pressures on the external position of the economy, nor on the inflation. On the contrary, the external sector is in a relatively good shape, with the current account deficit being brought down to 1.3% of GDP, hitting the low end of the average of around 2% in the last five years. The incessant improvement in the current account, to a large extent reflects the rising net-impact on trade of the new foreign production facilities, this particularly being the case in 2014. Yet, as the foreign demand has started to recover, some positive shifts in the more traditional export segments are also visible.

Anita Angelovska-Bezoska: Macedonia’s current macroeconomic landscape and main challenges ahead Speech by Ms Anita Angelovska-Bezoska, Vice-Governor of the National Bank of the Republic of Macedonia, at the economic and financial dialogue on the Economic Reforms Programs on Western Balkan and Turkey, Brussels, 12 May 2015. *  *  *  Dear Ministers, Dear representatives of the European Commission, European Central Bank and Eurostat, At the beginning, let me express our gratitude to the European Central Bank, European Commission and Eurostat for their assessment of our Economic Reforms Program for the period 2015–2017. Let me mention that we appreciate very much this dialogue with the EU institutions and the overall feedback on our policies that we have received during the process and we believe that it is highly beneficial regarding our preparedness for joining the EU. At this point, I would like to address several important issues related to the current macroeconomic landscape of the Macedonian economy, as well as the main challenges ahead. The growth momentum was kept in 2014, with the real GDP growth accelerating to 3.8% p.a. As the external environment is not sufficiently “growth-conducive”, the strong performance of the domestic economy is explained by country-specific factors. Firstly, it is a reflection of the positive fundamental shifts, with growing foreign investments, mainly in the tradable sector.
Consistent macro-economic stability is perhaps the greatest contribution that the authorities everywhere can make to financial stability. Of course that is easier said than done. While it is true that sharp changes in economic conditions, and asset prices, may be home-grown - often as a result of allowing domestic demand to outstrip the supply-side capacity of the economy to meet that demand, it is also true as we saw very dramatically two or three years ago that instability can be internationally contagious - especially in today’s world of financial globalisation. A great deal of work has gone on internationally over the past few years to improve our understanding of how national authorities can better protect their economies against shocks of this kind. It has resulted in a plethora of internationally agreed standards and codes of best practice ranging from transparency in the conduct of monetary, financial and fiscal policies, through financial regulation and the collection and dissemination of statistics, to various aspects of the financial infrastructure, including the legal and accounting framework, corporate governance arrangements, payments systems and so on. The emphasis now is on implementation and the IMF has the task of encouraging and assisting all of its members to step up their efforts, as best they can given their particular  1  BIS Review 66/2000  circumstances, in all of these respects. This is in the member countries’ own individual interests, but it is equally in the interest of greater stability of the global economy.

That in turn could result in unnecessary economic and financial instability. If, on the other hand, IMF assistance were too readily forthcoming, both the member countries, and their creditors, might be encouraged to take excessive risks in the belief that the IMF would in the end bail them out. This is a particular form of the familiar problem of moral hazard. It, too, could result in unnecessary economic and financial instability. What does seem clear is that, given the scale of private international capital flows today, the IMF’s resources are certain to be limited in relation to the problems that could emerge. At some point therefore - depending on just where the balance is struck - the onus for resolving the situation has to fall back on the borrowing country and on its creditors, who cannot avoid taking ultimate responsibility for their own lending decisions. So there is a link between the review of the IMF’s facilities and what has come to be called - in the jargon - PSI, or private sector involvement in crisis resolution. And that link remains to be clarified. Just how these issues are resolved will have an important bearing upon global economic and financial stability, and in turn, upon the safety of our national banking systems. Somewhat similar considerations apply in the narrower national context.
Retrenchments in the sector have to-date been modest. Based on data from the Ministry of Manpower (MOM), retrenchment in 1Q 2020 for Finance & Insurance services4 was similar to the average quarterly retrenchment in 2019. 4. However, the economic environment continues to be challenging. We have to expect that new job creation in the financial sector will slow, while retrenchments are likely to pick up. The Singapore economy shrank by 13.2% on a year-on-year basis in the second quarter of this year. For the full year, GDP growth is projected at -7% to -5%.5 The economic downturn has directly impacted the labour market. MOM’s preliminary data shows the overall unemployment rate rose to 2.9% in June6 . Retrenchments more than doubled in Q2 from the previous quarter, mainly in the wholesale trade and transport equipment sectors. The performance of the financial services and the sector’s employment situation could continue to be creditable under current challenging circumstances, but we cannot be complacent. We must press on with the sector’s transformation efforts, in investing in the workforce for the future. 5. MAS has three priorities to support the local workforce in our financial sector. These are: 1/6  BIS central bankers' speeches  Protecting Livelihoods, Creating Opportunities, and Strengthening the Singapore Core. Protecting Livelihoods 6. Our top priority is to keep workers employed while deepening their capabilities. Labour market conditions will become more challenging, with some firms downsizing and others imposing hiring freezes.

Jacqueline Loh: Creating opportunities and strengthening the Singapore core in financial services Keynote speech by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the SGUnited Financial Sector Jobs & Skills Fair, Singapore, 12 August 2020. * * * 1. Good morning, and thank you for inviting me to speak at this first virtual career fair by the Institute of Banking and Finance (IBF) for the financial services sector. Opening The financial services sector is a key contributor to Singapore’s economy, and has provided good job opportunities for Singaporeans. 2. In 2019, the sector accounted for 13.3% of GDP1 and employed more than 170,0002 workers. During 2015-2019, the sector created 22,000 net jobs. Our estimate suggests that of this, 16,000 – or 3 out of every 4 jobs – went to locals. And these are good jobs: 15,000 local jobs created were at salaries within the top 40% of 2016 salaries. The median income of locals in the sector last year was $ well above the national median of $ As the sector has grown and strengthened its competitiveness as a global financial centre in Asia, it has created good jobs for locals. This year, financial services sector growth has held up thus far, with retrenchment levels subdued. 3. The sector3 expanded by 5.9% year-on-year in 1H 2020, and employment rose by about 1,500, based on MAS’ estimate. Our internal estimates suggests that locals continue to take up at least 3 out of every 4 jobs created.
The risk of overheating and forex pressures Economic recovery continued over the course of 2010, but at the turn of 2011 we faced new macroeconomic challenges. Preoccupations again centered on world developments, due to tensions associated to the two-speed recovery. Emerging countries, with their output gaps narrowed or closed had to deal with their economies’ overheating and related inflationary pressures. Furthermore, they began having strong exchange rate pressures due to their better relative position in the world, capital inflows and the need for global imbalances to be resolved. Several economies’ exchange rates dropped to their lowest in the last decade (figure 9). Only very recently have we seen some reversal because of a terms-of-trade deterioration and increased risk aversion around the world. Chile has been no exception. Although in net terms capital inflows were not large, our currency also strengthened, not a surprise in a scenario of vigorous growth and very good terms of trade. The nominal exchange rate posted a significant appreciation toward the end of 2010, while the real exchange rate hit levels below the averages of the last 15 to 20 years (figure 10). The current exchange rate tensions originate in some long-lasting phenomena in the international economy. Global imbalances are still unresolved, and part of the solution requires that the countries that enjoy a better position today (i.e., emerging en commodityexporting economies) redirect part of their demand to those that are worse off – the developed economies.

The officers responsible for supervision will naturally be more conservative than those promoting the financial sector. Managed well, this tension is constructive. Officers must continue to speak up and express their views, even though they may sometimes be overruled. With this approach to regulation, it is imperative for MAS to foster closer cooperation with the industry. We have made a serious effort to build a constructive exchange and dialogue with the private sector. We must continue to strengthen this culture of openness. Central bankers must treat some matters with the utmost discretion, to be discussed only in hushed tones among a select priesthood. But we cannot do all our business this way. In our day-to-day dealings with the financial institutions, we have to be constantly willing to explain the rationale for decisions and policies. At the same time, we must listen to proposals and ideas from the industry and feedback. As we continue to liberalise, we will need inputs from industry participants on many issues. We have to understand the industry’s point of view, and yet not be captured by the industry we are regulating. This mindset must permeate the whole of MAS, to every staff member. 5. Industry specific issues  Banks The first priority for banks is to upgrade their capabilities and strengthen their management teams. This is the only way for them to hold their own in the new environment, either by themselves or linked up with others in a strategic alliance or merger.
Developments during the summer Focus on Greece As you know, at the beginning of July the Greek people voted no to the proposed measures presented by the country’s creditors in a general referendum. However, shortly thereafter the Greek parliament nevertheless decided to make extensive reforms and savings. They have thus been able to reach an agreement of principle regarding a third loan programme and negotiations are currently under way regarding the details of this programme. However, it will be some time before we can fully understand what effects the summer’s discussion on the future of Greece will have on the monetary union and the development of the euro area. On the one hand, it was a relief that the euro area succeeded in reaching a new agreement with Greece. On the other hand, confidence in the euro area and in Greece may have been damaged further, which creates uncertainty and may further delay the growth that the area so needs. There is still the question of whether Greece will succeed in recovering without needing to write off some of its debts. Here, for instance, the IMF has been very clear that such writedowns are necessary to create reasonable conditions for a recovery. So far, the crisis has not led to any major turbulence on the financial markets, or to any other significantly negative effects in other countries. This means that developments as a whole can be said to be in line with our assessments.

An appreciation of the Swiss franc against the euro would run counter to the relaxation in monetary conditions brought about through the interest rate channel. This is why the SNB will continue to act decisively to prevent any excessive appreciation of the Swiss franc against the euro. An assessment of monetary conditions can be misleading if it is based on prices, which, like currently the libor, have reached a bound. For this reason, an assessment based on quantities – money and credit – is particularly important in the current circumstances. The monetary base has increased substantially since October 2008, when the financial crisis entered a new phase following the collapse of Lehman Brothers. We supplied the interbank market with sufficient liquidity to meet burgeoning demand in a climate of uncertainty, in order to prevent any increase in money market rates. Since then, precautionary base money demand has declined and we have reabsorbed liquidity accordingly. The monetary base has thus fallen by 28% compared to the peak recorded in April 2009. The level of sight deposits is, however, still almost ten times higher than before the crisis. There is thus a risk of excessive money creation once confidence is restored. Monetary conditions should not be judged in terms of banking sector liquidity, but rather on the basis of the liquidity available to households and firms – i.e. the monetary aggregates. M3 growth, which had been modest for a long time, has accelerated. In October, it reached an annual rate of 7.7%.
Today, expectations are of a largely unchanged level of resource utilisation. Thus, price pressure is not as high, either, as long as no secondary effects arise from the energy price rises. Forecasts guide policy Let me conclude by underlining two important aspects when assessing monetary policy. Firstly, the Riksbank, like many other countries with inflation targeting, has chosen to look ahead when making monetary policy decisions. This is clearly seen when the actual policy is compared in the evaluation appendix with simple, rule-based decisions on the basis of observed GDP growth or actual inflation. The import of this is, of course, that forecasts of inflation and GDP growth become more decisive for monetary policy than the actually observed growth rates in price levels and GDP. A disadvantage of this policy is that forecasting mistakes have effects on policy. But one advantage, which we consider  4  BIS Review 15/2003  to outweigh this, is that monetary policy becomes less disjointed, more predictable and on the whole more stabilising for economic developments. Of course, the Riksbank could have raised its rate more when inflation rose because of higher food and energy prices during 2001. But would this have rapidly subdued inflation and led to a more beneficial development in the economy? I don't think so. Secondly, it is difficult both to make and to assess forecasts, as our picture of history and the current situation constantly changes as a result of revisions to the statistics.

Some analysts have attributed this lack of  BIS central bankers’ speeches  1  trade in service and manufacturing sectors to lack of competitiveness and products that insurer the exporter against any unforeseen losses. The demonstration by ATI of their credit risk insurance products in this workshop will therefore, play a very important role in promoting trade and exports of Non-Traditional Exports which lead to a diversified economy, job creation and sustainable economic growth. The credit risk insurance products also spur trade within Africa by helping our local companies to become more competitive through increased access to credit facilities. ATI has therefore, truly had a significant impact in Africa, which is reflected in the over $ billion worth of trade and investments it has attracted into the continent over the past decade. Distinguished Guests, Ladies and Gentlemen, as you are aware, staying competitive is what all companies strive to do. Innovation plays a key role in this equation. I am therefore elated that this morning ATI will speak about how it is providing innovative products and services to better suit the needs of banks and financial institutions. I am confident that the strategic partnerships of local banks and ATI will provide an opportunity for growth in credit particularly to the Small and Medium Enterprises which face major challenges in the trade sector.
These two assumptions imply, in the context of the staff projections, a continuation of overall contained domestic cost pressures, which contributes to the moderation in inflation projected in 2009. It has been the view of the Governing Council that the risks to this medium-term outlook for price developments are fully confirmed to lie on the upside, mainly relating to possible further rises in oil and agricultural prices, and increases in administered prices and indirect taxes beyond those foreseen thus far. In addition, against the background of sound economic fundamentals, stronger than currently expected wage dynamics may emerge, while an increase in pricing power in market segments with low competition could materialise. As regards economic activity, incoming information had confirmed the sustained nature of economic expansion in the euro area, with real GDP growing by 0.7% quarter-on-quarter in the third quarter, while indicating some moderation in the fourth quarter. Overall, the  BIS Review 3/2008  1  economic fundamentals in the euro area remain sound. Looking ahead, Eurosystem staff projects annual real GDP growth to lie between 2.4% to 2.8% in 2007, between 1.5% and 2.5% in 2008, and between 1.6% and 2.6% in 2009. In comparison with the September 2007 ECB staff projections, the range projected for real GDP growth in 2008 has been revised slightly downwards, whereas for 2007 the new range lies within the upper part of the previous one.

Although such relative price shocks do not necessarily affect inflation, prolonged short term impacts of sizeable relative price shocks could result, for instance, from adjustment frictions in the economy. Empirical studies for the euro area have tended to suggest a small dampening influence of trade openness on prices in the early part of this decade, though globalisation’s contribution to recent movements in commodity prices – particularly energy and food – has had a significant offsetting upward impact on prices. This warrants close monitoring, in particular given the risks of second round effects. In case of food related commodities, it also underlines the importance of efficient supply side adjustment in agricultural commodity markets. A separate but nonetheless potentially equally important channel through which globalisation can affect inflation involves the indirect price impact of increased competitive pressures, with two main aspects. First, in principle it could contribute to compressing firms’ price-cost markups as competitive forces resulting from trade openness would depress profit mark-ups of domestic firms competing with international firms. In practice, however, such effects have been hard to identify and, indeed, aggregate profitability has remained high. Second, in principle competition associated with globalisation could alter the responsiveness of prices to costs or measures of economic slack, or imply a greater role for foreign conditions in the inflation process.