samchain/econo-pairs-v1 huggingface dataset:
Second, the past 20 years have seen the global labour market emerge as a result of dramatic progress in information and communication technologies, lower transportation costs and reforms launched in many countries. For instance, Richard Freeman from Harvard University estimates that with the integration of the former Soviet Bloc  1  This part of the speech is based upon a draft book on globalization written by K Rybiński and entitled Globalizacja w trzech odsłonach, published at www.rybinski.eu. 2  Estimates available at http://esa.un.org/unpp/. 3  See e.g. J Hawksworth The World in 2050, PricewaterhouseCoopers, March 2006. 4  M Aguiar et al., The New Global Challengers. How 100 Top Companies from Rapidly Developing Economies Are Changing the World, Boston Consulting Group, May 2006. BIS Review 97/2006  1  economies, China and India into the global labour market, the number of workers available globally jumped from 1.46 billion to 2.93 billion people, which Freeman calls “the great doubling” 5 . The first major change caused by globalization is therefore the emergence of the global labour market in the 21st century. This has already brought about changes both in businesses’ operating strategies and employees’ behaviour. The global labour market shifts jobs to places with the highest effectiveness and lowest cost of manufacturing. For Poland, this means a large inflow of foreign direct investment despite a halt in privatization. In the global labour market, employees move to places where they are better paid for their skills.

Krzysztof Rybiński: How to use globalization to improve Poles’ living standards? Address by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the panel session: Globalization and Poland’s development, 4th Congress of the Polish Lisbon Strategy Forum, Warsaw, 13 October 2006. *  *  *  Ladies and Gentlemen, In my today's speech, I should like to achieve two goals: •  First of all, I would like to outline major economic changes effected by globalization. 1  •  Second, I would like to point out to such areas in Poland's economic strategy that call for profound changes necessary if we want to reap the benefits of globalization while avoiding its pitfalls. At the same time, I would like to emphasize, as I usually do, that the opinions presented in this speech reflect my personal views and by no means are an official stance taken by any institution I used to be or I am presently professionally involved with. * (1)  *  *  What major changes in the global economy and in national economies have been induced by globalization? Globalization may be defined in various ways, and I believe that its essence is best captured when we define it as free movement of goods, services, labour, capital and knowledge between countries. Before I proceed with the presentation of the most important effects of globalization, it is well worth recalling the demographic trends that are going to strongly influence the global economy.
We will test separately these two assumptions: the shape of the curve and the break in the slopes. In terms of methodology, the analysis covers the OECD countries over the period 19902017, except for the United States where the data covers the period 1989 – 2017. Data sources for wages and inflation are the OECD and the FRED databases (for US), annual data. The reason for this selection is the availability of long-time data series on wages at OECD (they are only available since 1990), while for US the FRED database allows us to start from a known peak year, which was 1989. We used the following date: the average annual wage in 2017 constant prices at 2017 USD PPPs, exchange rate (national currency units/US dollar) and inflation (CPI) – annual growth rate, from the OECD database, and the real median household income in the United States, 2017 CPI-U-RS adjusted dollars, from the FRED database. We transformed the average annual wage into local currency for ensuring comparability with the inflation rate, which reflects changes in local prices. Data sources for the inflation target of central banks are from the respective central banks’ websites. If a central bank targets a corridor rather than a level of the inflation rate, then the midpoint of the target band is considered. The year T0 is the peak year. We define a wage adjustment episode the adjustment in real wages that follows after the peak year.

Reference wage values, social preferences, jobs’ characteristics, skills’ endowments and even Central Banks’ targets, they all change over time – hence, the impact of cumulative wage gaps on inflation cannot be the same in different time periods. In fact, even Phillips (1958) mentioned that he ignored years in which import prices rise rapidly enough to initiate a wage-price spiral. He stated that his hypothesis that the rate of change of money wage rates can be explained by the level of unemployment is supported except in or immediately after such years. In doing that, he effectively acknowledged the non-stationarity of his curve. He referred to those years as events that occur very rarely except as a result of a war. Our approach embraces these events, except that in modern times it is not war that makes the difference, but recessions; and recessions happen more often than wars. We try to explain what happens during and after recessions – which is exactly what is omitted by the original Phillips curve. Wages, as the most important source of income for most households around the globe, stand at the basis of any consumption theory. The main problem with the prevailing consumption theories (Keynes’ consumption function (1936), Modigliani’s life-cycle hypothesis (1966) and 2  Friedman’s permanent income hypothesis (1957)) is their long-term approach. This puts them at odds with our rather short and medium-term perspective on inflation, especially in times of crisis.
The effectiveness of central bank asset purchase programmes rests on this critical assumption.6 It is now easy to see that these programmes can trigger substantial cross-border capital flows and that these are likely to affect the term premia of assets in the receiving economy. As a result, returns on US Treasuries, German Bunds and Japanese government bonds, given their close similarities in terms of safety and liquidity characteristics, are often driven by a common component as investors attempt to equalise their risk-adjusted returns. Slide 5 illustrates this mechanism through the lens of a Japanese investor. It shows the evolution of the return on a ten-year Bund and equivalent US Treasury on an exchange rate-hedged basis. You can see that, in recent years, a Japanese investor in US Treasuries would have been able to lock in a significant yield pick-up over a domestic government bond, and at times also over a German Bund without incurring exchange rate risk. Only recently has it become more attractive for a Japanese investor to invest in German Bunds, reflecting the increased cost of hedging resulting from the rise in US short-term yields. Empirical analysis on the direction of international spillovers in bond markets corroborates this view. On slide 6 you can see that ECB researchers, using the Diebold-Yilmaz methodology, find that bond market spillovers from the euro area to the United States spiked sharply by mid-2014, just when capital flows started to turn.

Ivan Iskrov: Bulgarian National Bank – independence, predictability and transparency Speech by Mr Ivan Iskrov, Governor of the Bulgarian National Bank, before the 41st National Assembly of the Republic of Bulgaria on the occasion of his election for a second term of office, Sofia, 26 August 2009. *  *  *  Ms. Speaker, Ladies and Gentlemen MPs, Allow me first and foremost to thank you for the enormous trust and the strong support you just now gave to the Central Bank and its Governor, Ivan Iskrov. I don’t know of any head of any public institution that has so far enjoyed such a vast parliamentary vote of confidence with the support of 195 MPs. This result exceeds the 165 votes in support of my nomination in the previous 40th National Assembly. When a week ago I shared with the person closest to me that I had decided to use the parliamentary case of Mr. Nenovsky to submit myself to a confidence vote by the 41st National Assembly, I heard the following: “Isn't this step rather too risky, besides the Prime Minister publicly announced that he did not approve of the procedure but he respects the BNB as an institution, and highly values you as a governor and wishes you to continue on the post?" I replied that no one could predict the possible deliberations and how the 240 MPs would vote, but that I was nonetheless obliged to ask for their confidence. Or else on 9th October this year I leave!
One form of exchange rate target familiar to Icelanders is a declared target of an exchange rate index with a defined fluctuation band. Such an arrangement prevailed in Iceland before the inflation target and floating exchange rate were adopted in March 2001 (see Chapter 12). The original fluctuation band was rather narrow, at ±2½%. It was then widened to ±6%, and again to ±9%, after it proved more difficult, and in some ways riskier, to hold the exchange rate within a narrow band once restrictions on capital movements were lifted. But it was also  6  BIS central bankers’ speeches  growing imbalances in the domestic economy that contributed to the demise of the exchange rate target. Those imbalances were due in part to excessively accommodative demand management, which provided insufficient support for the exchange rate policy. An exchange rate peg of this type has an advantage in that, in the long run, inflation will tend to converge on inflation in the anchor currency area and exchange rate volatility will be reduced. However, Iceland’s experience in this area – and that of many other countries – shows that it is difficult to maintain such a unilateral exchange rate peg when movement of capital is unrestricted and the exchange rate policy receives inadequate support from fiscal policy and other aspects of demand management (see Chapter 18). Thus it is not a given that this would be a viable option for Icelanders, as such a policy might lack credibility because of previous experience.

Depending on the resolution there and the progress of the EU accession negotiations, the problem could be resolved in connection with the accession process itself. At this point, it is unclear what form such outside assistance would take, but the more it takes the form of declarations concerning limits to exchange rate fluctuations backed by credibility and strong ability to intervene in the foreign exchange market, and the less it takes the form of offering loans, the better. On the other hand, it appears inevitable that, if Iceland joins the euro area, it would be necessary to convert all krónur at the same exchange rate, for the same reasons as with a currency board or unilateral adoption of another currency. Although the interaction between the capital controls and Iceland’s currency options is complex in many respects, this is not true to the same extent of prudential rules restricting the international activities of domestic financial institutions. For instance, it would be safe to relax such rules if Iceland were a member of the euro area and its financial institutions could carry out a large share of its cross-border business in its home currency. This would be even more true if the EU framework for cross-border banking were reformed so as to provide for EU supervision of banks operating throughout the region, a pan-European deposit insurance scheme, and intervention in distressed financial institutions by a joint EU body.
Banks are of course already used to dealing with at least some of the issues that crop up in an electronic banking environment, and so have built up experience and expertise to deal with these. However, I do believe that the internet, because of its low cost, global reach and versatility raises the stakes for the banks – both in terms of the opportunities it presents as well as the risks. Strategic risk In talking about these risks, let me start at the top – with the issue of strategic risk. In other words, will the bank get it right? Will it make the right choices when it comes to investing in e-banking or will it waste money by going down a technological blind alley? Should it attempt to take the lead in new technology ahead of its competitors, or should it be a follower and adopt a “wait and see” approach? The latter may be the safer course of action for smaller banks, though it does create the risk of being left behind. The advantages of e-banking, and internet banking in particular, are quite clear – the ability, for example, to disseminate information widely and instantaneously at low cost and to cross-sell products in a much more effective way. But there are also strategic threats. The cheapness and global reach of the internet opens up the threat of increased competition from new entrants who will no longer need a branch network to operate effectively in any given market.

The industry will also benefit from continued and candid engagement with central banks, who understand the nuances of their respective populations. We also cannot ignore the fact that the idea of a cashless utopia is becoming more popular. This will be a real challenge for us – as we hope to see physical currency remain relevant. The sustainability and competitiveness of this industry depends on being able to deliver on the three considerations I mentioned earlier – namely, ensuring that cash continues to be secure, socially and economically cost-effective, and enabling for the promotion of monetary and financial stability. With that, I would like to wish all of you a productive conference as you discuss these important issues in the coming days. Have a pleasant stay in Malaysia, enjoy yourselves, and please do not hesitate to indulge in some shopping – we do accept cash! 4/4  BIS central bankers' speeches
Looking ahead, we recognised that we needed two more measures: to require participants to use a common platform and to adopt common standards (such as SGQR). C. GOING CROSS BORDER 4/6  BIS central bankers' speeches  As we aim for interoperability and efficiency within our domestic systems, it is equally important to look beyond and to look outwards. A lot of commerce and e-commerce 19.  is carried out across borders today: Cross border e-commerce alone is expected to expand strongly, by approximately 25% annually until 2020, nearly twice the growth rate of domestic ecommerce10. And just as more people travel and work overseas, and more businesses find ways to deliver goods and services overseas, payments will also need to keep up. Among Singapore’s list of priorities as ASEAN Chair this year is to promote the growth of e-commerce in the region. Google and Temasek estimated that e-commerce in 20. ASEAN could amount to USD 88 billion in 202511. Cross border payments that are affordable, secure, and instant, will play an important role in driving e-commerce trade flows and achieving this vision. Although cross-border linkages offer huge benefits in important areas of the economy such as trade and tourism, implementing them is an up-hill task because of 21.  complexities like different technical interfaces, and legal and regulatory requirements in each jurisdiction. Each country is also in a varying stages of development. But we are making progress: a.

Just to give you an example, we do not have enough accountants in the government service. When I talk to the police, the CID, the Attorney General’s Department, all these departments they do not have accountants. They cannot analyze when they see a balance sheet in any corporate case, they do not know how to handle it. There is a desperate shortage of manpower, partly because the accountants in this country can get much better salaries when they work for the private sector. Now how do we bridge this gap? I think given that the Central Bank is a very secure service – maybe we do not pay as much as the private sector but we do give security of tenure, you all get EPF and pensions – these sort of long-term prospects will attract good people to this institution on continued basis. I have tried in my own way to fight with the government to get increases in wages for all of us and also reinstating the pension and I hope that will make it much more attractive for people to work for this institution and keep you from moving away into the private sector. But in the process we also have to develop our skill sets and really organize and prepare ourselves for the challenges of the future. The future I think is going to look very different from the past in this country. We are now reaching a level of normalcy which most of us have never experienced in our lifetimes.
In Norway, output growth has picked up after a growth pause. The interest rate is an effective instrument. The interest rate reductions since 2002 have contributed to the turnaround and the economy has experienced a soft landing, following the years of high cost inflation in Norway and the  BIS Review 23/2004  3  cyclical downturn in the world economy. Lower interest rates in particular have contributed to sustaining growth in private consumption. Household demand will probably be the most important driving force in the Norwegian economy in the period ahead. Against the background of high real income growth, improved job security and expectations of continued low interest rates ahead, household consumption is expected to exhibit strong growth. Petroleum investment exhibited brisk growth in 2003. Growth in petroleum investment appears to be continuing in 2004, but probably at a slower rate than in 2003. Low interest rates and house price inflation imply higher housing investment in the period ahead. Fiscal policy is also stimulating activity. The impact of the interest rate decline on private consumption is likely to be stronger this year than in 2003. It takes time for changes in Norges Bank’s key rate to feed through fully to interest rates for households. Norges Bank’s calculations show that if we look at 2003 and 2004 as a whole, it appears that the impact of interest rate changes will result in an overall reduction of about NOK 15 billion in household net interest expenses before tax.

Svein Gjedrem: Monetary policy and cyclical developments Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at a meeting hosted by Sparebank 1 at the University Center, Svalbard, 22 April 2004. The text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 21 April, Inflation Report 1/04 and on previous speeches. The Charts in pdf-format can be found on the Norges Bank’s website. *  *  *  In many countries, the conduct of monetary policy is delegated to the central bank. In Norway, the responsibility for interest rate decisions was delegated to Norges Bank in 1986. The mandate for the conduct of monetary policy was laid down by the Ministry of Finance in the Regulation on Monetary Policy of 29 March 2001. The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The target is symmetrical - it is just as important to avoid an inflation rate that is too low as an inflation rate that is too high. The inflation target provides economic agents with an anchor for inflation expectations. It influences their decisions concerning saving, investment, budgets and wages. Experience shows that there is no long-term trade-off between lower unemployment or stronger economic growth and higher inflation. The task of monetary policy is to provide a nominal anchor. The inflation target is such an anchor.
It seeks to reduce excess leverage in the banking system, and to afford an additional measure of protection against the so-called “model risk”, i.e. against the risks associated with the use of sophisticated models allowed under Basel III. There are still doubts about this ratio as a Pillar 1 measure. I understand that the doubts do not concern the concept, but, rather, its final calibration and how it will impact on specific business models, in particular, those most focused on retail activity. Moreover, it is not fully clear whether the best option will be a single percentage for all banks, irrespective of their size or business model; or whether it would be better to opt for different percentages, depending on the type of business or activity of the bank; or to establish a range within which the supervisor would have discretion to decide which figure applies best to specific institutions. We believe that this new ratio can be a good prudential tool, once it is correctly calibrated. European regulations envisage that countries may apply the leverage ratio as they consider best until its harmonization in 2018, but the Banco de España does not consider necessary to bring forward its entry into force. With regard to liquidity regulation, Basel III has included, for the first time, a short-term liquidity ratio (LCR) which seeks to ensure that banks have a buffer of high-liquidity assets equal to 100% of foreseeable liquidity requirements for, at least, 30 days.

PORTUGAL Could the ending of this zero interest rate environment be a problem for more indebted countries, like Portugal? Obviously, countries with higher debt levels have benefited more from lower refinancing costs, but this is not the objective of our monetary policy, which to ensure price stability. More fundamentally, we should always keep in mind that investor confidence in the sustainability of public finances is the key determinant of interest rates on sovereign debt. If there are doubts about the sustainability of public finances, spreads can increase to very high levels, despite the ECB’s asset purchase programme. I have noted that, following heightened market volatility due to developments in Italy, spillovers to interest rates on Portuguese public debt were contained, thanks to significant progress in public finances. This again stresses the importance of sound public finances. What is your assessment of Portugal’s progress? Commission and ECB staff concluded their eighth post-programme surveillance mission last week. They stress that the current favourable macroeconomic and financial conditions provide an opportunity to accelerate structural reforms, further reduce macroeconomic imbalances and increase Portugal’s resilience to shocks. Fiscal consolidation remains necessary to ensure a steady decline in the debt ratio. 3/4  BIS central bankers' speeches  They also note that, while Portuguese banks have made considerable progress in strengthening their balance sheets, remaining vulnerabilities in the banking sector need to be addressed, in particular the high level of non-performing loans (13.7% in 2017 compared with an EU average of about 5%).