samchain/econo-pairs-v1 huggingface dataset:
Enter a title for the industry  Source: Labour Force Survey (user guidance)  10  BIS central bankers’ speeches  Chart 7: Compositional effects driven by  Chart 8: Job creation fell further, and has  characteristics of employees, not sectors  since recovered faster, for low skilled  Source: Labour Force Survey  Source: Labour Force Survey  Chart 9: Over longer sample, shifts in  We can’t demonstrate this with the detailed  average qualifications driven compositional  LFS dataset from 1994, as it includes only one  effects  proper cycle. But the positive relationship with unemployment exists even during the Great Stability (1994–2008). And, at the cost of a smaller set of variables – the survey didn’t ask people about their occupation and sectors before 1994 – we’ve managed to extend the estimates back a few years, to the late 1980s. The aggregate series you’ve already seen in Chart 310. The more detailed breakdown is in Chart 9. You can see clearly the same cyclical pattern during the last-but-one cycle: steeper falls in employment for the less well qualified during the recession, resulting in a positive  Source: Labour Force Survey  10  compositional effect, the opposite pattern in the upswing. The longer series simply splices on the pre-1994 estimates, based on the narrower sample, to the existing post-1994 series. One might ask how similar the two sets of estimates are in the overlapping post-1994 period, and the answer is that they’re close.

A more accurate description of the red line is average wage growth for people continuously in employment, adjusted for any the impact of changes in average age and experience across the workforce. BIS central bankers’ speeches  13
Policy rates are already low in many countries, and several central banks have already made substantial bond purchases to support economic development. I think it is important to tackle this unease. The Riksbank still has a very good level of preparedness and plenty of scope to take decisive action in the event of financial instability, for instance, by providing liquidity support to financial institutions. In addition, the Riksbank has four main monetary policy tools at its disposal in the event of a sharp decline in the Swedish economy: a lower policy rate, bond purchases, loans to companies via banks and currency interventions. In addition, communication on forward guidance can be used, potentially in combination with other measures. If we were to be affected by a serious economic crisis, an expansion of our balance sheet would, in my view, be closer to hand than the introduction of an even more negative policy rate than the one we have had in recent years. To cut the policy rate below zero again is entirely possible – it is important that zero is not regarded as a lower bound. That said, however, there is a functional lower limit as to how negative the policy rate can be before the transmission mechanism deteriorates.12 I therefore consider that we should exercise caution with regard to reintroducing a negative policy rate, and that the effects of this should be weighed against the advantages and disadvantages of extended bond purchases and other monetary policy tools.

François Villeroy de Galhau: Ensuring confidence in the currency Introduction by Mr François Villeroy de Galhau, Governor of the Bank of France, at the conference on "Recent monetary policy developments", Paris, 4 May 2017. * * * Our currency, the euro, is at the centre of debates that are particularly important to French citizens. The Banque de France is independent from politics, but in keeping with our mandate within the French Republic to ensure confidence in the currency, it is my role to provide certain clarifications. I hear proposals for a dual currency with the return of a national currency in parallel to a European currency. I must say that such suggestions would put confidence in the currency in danger. No advanced economy has this type of parallel circulation. Where two currencies exist (or have existed) and can be used to make payments, one always inspires less confidence than the other. Generally, it is the “national” currency that suffers – the only one accessible to households, particularly poorer households, and to SMEs. The currency therefore quickly loses its value, leading to excessive price increases and a negative impact on purchasing power. If we were to consider returning to the ECU, it is important to remember that it has not existed for 18 years and was not a real currency: the ECU was a unit of account that could not be used by either individuals or companies to make payments.
Hence my interest in the collaborative efforts of the business, academic and health sectors to further economic growth. These efforts capitalize on the strengths of the region and may well be a good way to further economic development not only in Syracuse but in Buffalo and Rochester as well. Each metro area has a strong university, a strong health sector and a business community all eager to find ways to leverage local assets and boost economic development. Looking forward, I believe that the colleges and universities in Syracuse will help drive the region’s economy in the years to come. Syracuse can build on these assets by continuing to make partnerships between industry and higher education a high priority. When companies and universities work together, they can become a powerful engine for innovation and economic growth. These collaborations are a key ingredient to helping improve the competitiveness of local businesses, the universities themselves, and their regions, and we should take every opportunity to exploit these partnerships as much as possible to unleash their full potential. College graduates finding jobs Let me finish off by saying a few words about the value of education. There is no doubt that the Great Recession and sluggish recovery that followed has made it difficult for many people to find jobs. I’m sure many of you here today are worried about finding a good job after you graduate, and you may be wondering whether going to college will turn out to have been a good investment.

My outreach trips complement the ongoing efforts of the New York Fed to assess conditions in the upstate New York economy and throughout our District. We monitor economic performance on a monthly basis through our indexes of economic activity and our survey of New York State manufacturers. We also get important input on economic conditions from meetings with our Upstate Advisory Board, whose members are major leaders in the upstate economy. We have constructed a consumer credit panel that allows us to better understand the financial condition of homeowners and students, and conduct a bi-annual poll of small businesses to understand their credit needs and availability. The results of the latter have helped inform a series of clinics that we have conducted to help small businesses take the next step to access capital and identify new sources of funding. As I mentioned earlier, we are always eager to engage with students, and our commitment to our region includes a series of educational programs worth highlighting. First, Math x Economics, which encourages students attending Title 1 schools to consider preparing for a career in finance or economics. And, second, our yearly Fed Challenge competitions, in which teams of students from high schools and colleges in the District take on the roles of the members of the Federal Open Market Committee (FOMC) and debate what is the appropriate next step for U.S. monetary policy. All in all, there is a lot to keep myself and my colleagues fully engaged with the communities we represent.
The associated effects, for example on the exchange rate, will inevitably change if the interest rate is changed for a shorter or longer period than in our analysis. Experience shows that the time it takes for  2  BIS Review 66/2002  a change in interest rates to have an impact will also vary. For example, the interest rate increases in 1998 had an impact on wage growth as early as the following spring. In other situations, it may take longer. The impact on consumer price inflation is also uncertain. The inflation rate is reduced by an estimated 0.20-0.35 percentage point after two years and 0.30- 0.40 percentage point after three years. The result will depend partly on how the exchange rate reacts to the increase in interest rates. All the above estimates are based on the assumption that monetary policy credibility remains firm. For example, if an interest rate decrease reduces credibility, the impact on the exchange rate and inflation may be substantially stronger than indicated here. However, it is impossible to quantify these effects. Sizeable interest rate changes could theoretically influence monetary policy credibility. The above estimates are therefore based on small interest rate changes. Pronounced interest rate changes could have a different impact from that described here. Forward rates reflect the market expectation of future levels of short-term interest rates. The difference between German and Norwegian forward rates reflects different inflation expectations and a risk premium.

What monetary policy can do is to maintain stability without unnecessary fluctuations in output and employment. Overall employment is also influenced by wage formation. If wages increase at an unsustainable pace, employment will decline and unemployment will gradually increase. Monetary policy cannot prevent an increase in unemployment that is due to a wage-driven cost shock. When there is confidence that monetary policy will contribute to low and stable inflation over time, it can contribute in the short term - under certain conditions - to smoothing fluctuations in output and demand. In the short term, there is a trade-off between the objectives of inflation stability on the one hand, and output and employment stability on the other. An aggressive monetary policy will rapidly bring inflation to the target. This will cause wide fluctuations in the real economy. The interest rate can also be changed more gradually, which will have less impact on the real economy but cause more pronounced fluctuations in inflation. By influencing inflation over time, we can ensure that an overly aggressive monetary policy does not in itself cause unnecessary disturbances to the economy. The impact of monetary policy occurs with considerable and variable lags. Our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. Two years is thus a reasonable time horizon for achieving the inflation target.
How much it will contract is uncertain, however, particularly because investment remains undetermined, largely due to uncertainty about access to foreign credit. The adjustment following the overexpansion of recent years has run its course, for the most part, and in some areas it has overshot the mark. If we include the Central Bank’s forecast for 2010, public expenditure has contracted by nearly one-third since 2007, which is virtually unparalleled in other countries, as other countries did not experience the overheating Iceland did. Iceland’s huge current account deficit has turned to a surplus, excluding calculated interest in the estates of the failed banks, which may not be paid. The plunge in the currency has been arrested, and other things being equal, inflation will fall sharply in the next few months. The latest inflation measurements, published earlier this week, change nothing in this regard, as they were foreseen by the Central Bank, and because the year-on-year rise in inflation is due largely to the drop in the CPI in March 2009. A number of economic variables have now overshot the mark, as often happens when imbalances like those in Iceland correct themselves. The most important of these is the real exchange rate of the króna, which is currently one-third below its historical average and probably considerably below its long-term equilibrium. The real exchange rate will therefore rise in the quarters to come.

For the Swiss mortgage market, there is currently only a small risk of a credit crunch. On the one hand, there have been no widespread excesses on the Swiss property and mortgage markets recently, which makes it unlikely that banks’ appetite for risk will decline to any great degree. On the other hand, opportunities for loan refinancing in Switzerland remain strong. The structure of mortgage lending in Switzerland is quite varied, and for banks the “Pfandbrief” mortgage bond is a refinancing tool that provides continuing strong opportunities for loan refinancing, and has experienced something of a renaissance since the financial crisis. As such, the already muted outlook for the Swiss economy is unlikely to suffer any additional impact from a credit crunch on the property market. BIS Review 107/2008  1
Thomas Jordan: Sound money – a fundamental pillar of our society Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Ustertag, Uster, 23 November 2014. *  *  *  The speaker would like to thank Peter Kuster for his support in preparing this speech. He is also indebted to Patrick Halbeisen, Rita Kobel, Thomas Moser and the SNB Language Services. Introduction It is a great honour for me to speak to you today from this lofty pulpit. Admittedly, as a central banker I cannot contribute a great deal to your spiritual well-being. I will therefore limit myself to my true area of competence and talk about money. Let me begin by explaining why I am particularly delighted to be addressing you today, as your guest speaker. As you know, the Ustertag of 1830 was a major milestone on the long road towards the creation of the Swiss federal state. Just 18 years later, modern Switzerland was born. And only two years after that, the Swiss franc was introduced as the currency of the Confederation – although, in the initial stages, the federal state had to be content with coinage sovereignty alone. Not until 1907 did a central bank equipped with the exclusive right to issue banknotes begin operations. This was the Swiss National Bank (SNB). So you see, important developments were set in motion by the Ustertag, including changes that would affect our monetary system.

Ex ante, they won’t know for sure which is which. Plausibly, it might not be economical to put controls in place for every single innovation on an assumption of ‘exponential growth’. So when exponential growth occurs, controls can sometimes be left behind. Maybe something like that helps to explain the backlog in credit derivative confirmations, which the FSA cautioned banks about a few months ago. Growth in the market has been relentless. And to the concerns about confirmations have been added concerns, amongst practitioners, about unnotified assignments of credit derivative positions, related in part to the growth of hedge fund participation in the structured credit market. If something really bad were to happen, the system would, perhaps, be less robust than otherwise if dealers were not sure about who their counterparties were, etc. This is the type of challenge where collaboration across the industry is needed; and where individual firms’ incentives are stronger if they can each be confident that their peers are taking broadly the same actions. What I have in mind is the disincentive a firm faces in being tough with a hedge fund client if they doubt their peers will take the same line. Bodies such as ISDA have a role to play here, and I understand are doing so. Collective elements in atomistic markets So, where are the risks? They are all around us all of the time, of course. Some will crystallise. But that need not lead to disorder.
This pattern was mirrored among other major global banks where returns rose from 8% to 22% (Chart 1). The only even broadly comparable period in banking history was in the early part of the 20th century when UK banks’ return on equity averaged 13% (Chart 2). Measures of executive compensation rose even more dramatically. UK bank CEO compensation rose by 13% per year on average between 1989 and 2007, from $ million to $ million. US bank CEO compensation rose from $ million to $ million, also by 13% per year (Chart 3). Over the same period, compensation in the non-financial sector rose by around 4% per year in the United States. As Thomas Phillipon and Ariell Reschef have shown, that Himalayan rise in bank executive salaries made the financial sector salary boom of even the 1920s look like a foothill.11 In 1980, a similarly-skilled individual earned about the same in investment banking as in the non-financial sector. By 2005, that same person would be benefitting from a salary four times that of their non-financial sector counterpart. What explains this extra-ordinary period of high returns in finance? Arithmetically, the answer is simple – leverage. The pre-crisis rise in returns on bank equity can be explained almost  10  Diamond and Dybvig (1983), Brunnermeier and Oehmke (2010). 11  Phillipon and Reschef (2009)  BIS central bankers’ speeches  3  fully by higher bank leverage.12 Equity returns inflated in line with bank balance sheets. So too did bank CEO salaries.

If there were a benign, enlightened regulatory planner, able to co-ordinate the actions of traders on a lower-velocity equilibrium, the Flash Crash might have been forestalled. Unfortunately, there was not. ************ The pre-crisis quest for return has, over the past few years, been replaced by a quest for safety. Return on capital is no longer investors’ priority. Return of capital is. That risk-aversion is manifest in high risk premia on a wide range of risky assets and abnormally low yields on a range of risk-free assets. It is also evident in investors’ desire for financial instruments which are secured on high-quality collateral. Investors are taking literally the notion of a security. That desire for security has had a particularly pronounced impact on banks, which are refinancing large legacy asset portfolios. The cost of refinancing those portfolios has increased dramatically since the crisis, particularly for instruments lower-down the creditor hierarchy. The cost of unsecured borrowing by European banks has increased roughly 27-fold since 2007, while the cost of borrowing against high quality assets has risen “only” 16-fold. These relative price effects have shaped importantly banks’ financing choices. A large and rising fraction of global banks’ refinancing has taken place on secured terms. In 2007, the majority of term refinancing of European banks’ debt was on an unsecured basis. By 2011, secured and unsecured refinancing were roughly balanced. In 2012, secured financing is likely to take the lead (Chart 6).
On the demand side, the  2  BIS Review 50/2004  dampened consumer confidence has moderated the momentum of private consumption in the first half of the year, but private investment and exports have expanded well and have been the key drivers of growth so far this year. On this point, it is comforting to note that domestic demand expansion has benefited increasingly more from the pick-up in credit extension, driven by ample liquidity in the system. Private credit growth was a high 9 percent at end-June. Turning to economic stability, with continued growth, pressure on resources has become more visible this year with output gap continuing to close, inflation rising, the trade surplus narrowing and some tightening in the labour market reported. Overall external stability, on the other hand, remains strong with continued current account surpluses, falling external debt, and higher international reserves. But the higher oil prices and the rebound in investment have evidently put greater pressure on imports and the trade balance. One thing that we have been monitoring more closely this year is financial stability. Some indicators of financial fragilities are rising. These include rising household indebtedness and a very active real estate sector. Although there are no signs of overheating as yet in these two sectors, their developments need to be monitored closely especially with the credit cycle now turning. This is because they have the potential to become a source of financial fragility if their growths are left unchecked.

For those of you who have not been home for a while, cleanskin wine is quality wine that is sold more cheaply because it is unlabeled. So, you are getting something good but you don’t know why because you don’t know what it is. Half an hour ago, the Thai economy this year to many of you was like cleanskin wine. You know the economy is doing better but you don’t know why. BIS Review 50/2004  3  In this brief space of time, I hope I have given you an adequate account of how we at the Bank of Thailand see the Thai economy evolving this year, and hopefully have helped improve your understandings of the economy. As with the cleanskin wine, I will definitely go back for more. I only hope you will do the same by continuing to have confidence in the Thai economy and remain a trusted friend and a dependable partner of Thailand for many many years to come. Thank you. 4  BIS Review 50/2004
Uncertainty also characterises the subject I am going to focus on today – the effects of climate change on the Swedish and the global economy.2 We know that greenhouse gas emissions cause global warming, but we do not know how much and how rapidly the global temperature will increase. We know that climate change affects growth, inflation and productivity, but we don’t know how much and how quickly. We know that global warming can cause irreversible  1  Many members of staff at the Riksbank have contributed to this speech. I would especially like to thank Magnus Jonsson, Iida Häkkinen Skans, Conny Olovsson, Maria Ferlin, Marika Hegg, Anders Vredin, Jesper Hansson, Meredith Beechey, Marianne Nessén and Marianne Sterner. 2 The effects of climate change stretch well beyond effects on inflation, growth and financial stability. As the Riksbank’s task is to ensure price stability and a safe and efficient payment system, my speech will focus on this, but the intention is not in any way to detract from the human and ecological values that are affected. 1 [18]  threshold effects, but we don’t know how close we already are to such threshold effects. The Riksbank needs to respond to climate change. There are three reasons for this. First, because climate change affects the Swedish and the global economy – and may therefore threaten both price stability and financial stability.3 Second, because it is important to discuss what tools the Riksbank has to combat such threats.

Another welcome development to the capital market is the recent B+ sovereign rating assigned to the country, as well as, the reclassification of Zambia as a low middle income country. These developments reflect the country’s recent strong economic performance. As  BIS central bankers’ speeches  1  you may be aware, GDP growth has averaged above 6% over the last five years, supported by low inflation and a positive external sector performance. These favorable developments put the Zambian business community and Government in a strong position to access finance for sustained economic growth and improved living conditions of all citizens. Ladies and Gentlemen, in the medium to long-term the prospects for Zambia’s economy are bright. The robust GDP Growth momentum is expected to be maintained premised on favourable growth performance in mining, agriculture, construction, tourism, manufacturing among other sectors. This will be supported by favourable commodity prices on the international market, Government’s investment in infrastructure and expected increases in foreign direct investment. Further, inflation is expected to remain in single digits owing to prudent macroeconomic policies and the bumper harvest recorded during the 2010/11 harvest season which is expected to dampen any negative effects on overall inflation through the food component. Accordingly, interest rates are expected to decline further. In addition, the macroeconomic environment is expected to remain favourable due to a projected strong external sector performance. In this regard, the capital market has an important role to play.