samchain/econo-pairs-v1 huggingface dataset:
On the contrary, if it is deviated from fundamentals, we assume that the exchange rate will converge to values coherent with its long run levels. 2 In this way, with interest rate parity and certain  1  For further details on projection models and as an example of transparency, see Banco Central de Chile (2003). Also Banco Central de Chile (2007) updates the Board’s vision of monetary policy and its price stability objective. 2  Caputo, Nuñez and Valdés (2008) present the various models normally used to evaluate the real equilibrium exchange rate. BIS Review 92/2008  3  assumptions about the distant future it is possible to have a complete trajectory for the exchange rate. I must point out that, in a floating exchange regime, this is a working assumption made only to provide a model consistent with projections, even recognizing that the disclosed interest rate parity has little empirical validation. In any case, as our experience early this year has shown, a significant deviation from this path can have important implications for the course of monetary policy. At the beginning of the year, it was thought that rates could go up in the first quarter. However, the Board considered that the downward pressure on inflation generated by a pronounced appreciation of the peso relieved pressure on monetary policy. One aspect which has received much attention in monetary policy practice and theory is the assumption about future interest rates used in the projections.

(b) Data on portfolio equity inflows from the Institute of International Finance. Data on equity market capitalisation from Thomson Reuters Datastream. Chart 3 Emerging market equity prices and gross inflows(a) to emerging markets MSCI EM $ index (LHS) Gross inflows to EM $ 1,400  500  1,200  400  1,000  300  800  200  600  100  400  0  200  -100  0  -200 Q1 1990  Q1 1994  Q1 1998  Q1 2002  Q1 2006  Q1 2010  Source: IMF and Thomson Datastream. (a) Includes portfolio inflows, foreign direct investment and bank flows. BIS central bankers’ speeches  11  Chart 4 Cross-border asset holdings (1980–2005) 1980  1985  1990  1995  2000  2005  Source: Kubelec and Sa (2010) and Bank calculations. Advanced economies  Emerging market economies  Financial centres (Hong Kong and Singapore)  Notes: Widths of links are proportional to the log dollar value of cross-border asset holdings. Each arrow denotes ownership, with the arrow pointing away from the holder of the asset and toward the issuer of the liability. Sizes of nodes are proportional to the log dollar value of the sum of all of the country’s cross-border asset holdings and liabilities issued (i.e. equal to the sum of incoming and outgoing links).
Some versions of these crypto-assets – so called ‘stable coins’, which aim to maintain the value of the asset – are intended to function as payment systems. They both replace the current bank to bank machinery for holding and transferring the settlement asset or ‘money’, and at the same time create a new form of ‘money’ – the stablecoin – to be transferred. Technological innovation in recent years has, in short, enabled and can further enable huge changes in the way we transact in the economy and in the types of money we use and how we are able to use them. Such change offers great opportunity. But it also poses some very important questions for the Bank of England, sitting at the centre of ‘money’ in the UK. The change also poses questions more broadly for the UK regulatory authorities, government and parliament. That is why HM Treasury are leading the Payments Landscape Review.9  This is not new; the great debates about money that we have had every couple of centuries have always involved the political authorities as well as the technical ones. The key questions are as follows. First, how do we ensure the availability and acceptability of physical cash for as long as people want to use it? Second, how can we ensure that the money remains reliable and stable while taking the opportunity offered by technology to improve the efficiency, effectiveness and functionality of payments – that is money as a means of exchange?

Some of these are very similar to those I have discussed earlier with regard to private stable coins such as the implications for the supply of credit to the economy if the role of banks changes, liquidity dynamics both in normal times and in stress, and the risk that a CBDC is too successful and becomes dominant and a single point of failure in itself. Those opportunities and those downsides, I think, mainly come back to one issue: the extent to which a CBDC substitutes for commercial bank money and payments in commercial bank money and, looking further ahead, for the non-bank money and payments that might emerge, such as stablecoins. In turn, this will depend on two fundamental questions. First, how great is public demand for a CBDC and how extensively and for what purpose would people want to use it? The answer to this, in turn, is driven by the answer to the second question: what functions would a CBDC perform? 11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11  If we are to get the benefits of CBDC, some substitution must occur. The question is how to make this happen through the careful design of a CBDC to ensure it promotes stability and good economic outcomes. Design questions are critical. For example, who would be able to access CBDC directly? Would it be mainly a payments device and a cash like instrument? Or would it be able to serve as a mainstream vehicle for savings and store of value?
Classical growth dynamics appear for some reason to have stopped operating, with the gap to the frontier widening the more so the greater the distance to it. It is possible to quantify this slowing in convergence using a similar approach to that used to measure output convergence in the cross-country growth literature. 39  Specifically, a country’s productivity growth can be  linked by a convergence parameter to its productivity gap to the frontier country. This parameter can be estimated econometrically and tracked over time. 40  Chart 12 shows a time-series of this convergence coefficient estimated using a rolling regression. In the 1980s, this coefficient averaged 0.8. That is to say, every 10 per cent productivity gap relative to the frontier country resulted, on average, in productivity growth being 0.8 percentage points higher than in the frontier country. By 2000, that convergence coefficient had roughly halved. By the end of the sample, the coefficient is statistically insignificant from zero. Convergence had not just slowed but stalled. One of the key determinants of international technology transfer has been found to be cross-border flows of goods and services, people and money and capital. 41  While they have waxed and waned historically, all of th  these have tended to rise rapidly since the middle of the 20 century. Other things equal, that would have been expected to increase the speed of diffusion of innovation across countries over that period. In practice, the opposite appears to have occurred.

Chart 17 looks at different percentiles of the firm-level productivity distribution over time, both in levels terms and indexed to 2002=100. There has been a widening dispersion in the distribution of productivity across companies over time. In th  particular, there is a striking and widening divergence between frontier firms (say, the 99 percentile of firms) and the long tail of non-frontier companies. If we define frontier firms as the top 5% of firms by productivity performance, in line with the OECD, there is clear and widening blue water between frontier and laggard companies (Chart 18). In arithmetic terms, it is non-frontier companies that largely explain flat-lining productivity over recent years (Chart 19). These dynamics cast the secular innovation versus stagnation debate in an interesting light. The distribution of UK companies’ productivity suggests both forces have been operating, albeit at different points in the distribution – innovation in the upper tail, stagnation in the lower one. Widening productivity dispersion means that secular innovation and stagnation are complementary, not competing, hypotheses. For a relatively small cohort of frontier companies, secular innovation is clearly evident, with both high and rapidly-rising levels of productivity. For example, around 1% of UK firms have seen average productivity growth of around 6% per year. This poses a serious challenge to the notion that stalling innovation has been 46  For example, Andrews et al (2015). This work contains statistical data from ONS which is Crown Copyright.
An outstanding event has been the announcement by the Chinese authorities of a lower growth goal for this year. In Chile, the effects of the international crisis have been limited and lower than was foreseen a few months ago. Several effects that were noticeable toward the end of last year have been reversed to a great extent or have become less intense. Terms of trade have improved over the last months, due to rises in the copper price. Conditions for external financing have also improved, as a result of increased confidence in international markets. Local financial markets – one of the transmission channels of external crises towards the domestic economy – show that stock indexes, risk premiums and exchange rates have gone back to levels similar to those that existed before the intensification of international financial tensions. Other indicators such as amounts and terms of external banking sector financing have stopped the decline that occurred toward the end of last year. The Chilean peso has appreciated nearly 7% so far this year. The real exchange rate is close to its average level of the past 15 to 20 years. The movements of the exchange parity have matched the evolution of the US dollar in international markets, in the face of calmer markets and a greater appetite for risk. This has occurred with the price of copper at 3.8 dollars a pound, its highest level of the last five months. Its trend has been similar to that of other markets of commodities.

However, as our economy grows and current agreement ends at 2009, we will soon get full ownership of our economic policies with a reduced role of IMF under article 4 of the Agreement. The Bank of Albania has a proven track record of competence, credibility and professionalism in the service of our economy. These three elements provide necessary conditions to support and guarantee achievement of economic goal of stable prices and boost credibility in Albanian economy; but, we can not be hold responsible for the behavior of the other players. I am convinced that we need to find and implement clear domestic and foreign anchors to preserve the credibility of our reforms in the future. For the way ahead we are focusing our efforts in the identification and utilization of key elements of the state, politics, markets, institutions and general public that could efficiently play the role of domestic anchors. As part of this preemptive action, the Bank of Albania is carefully considering the possibility  BIS Review 121/2006  3  to launch a fully fledged inflation targeting regime of monetary policy in the midterm. This will be a conditional decision based upon results of current ongoing research, evaluation of the preconditions and building up of capacities. Other possible anchors such as a memorandum of understanding with ministry of finance and public education are considered as well. On the foreign side we see numerous prestigious partners which understand our concerns and appreciate the value of fiscal discipline.
8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  In contrast, in the pursuit of price stability, central banks deploy a handful of policies, primarily changes in interest rates and purchases of assets, that all relate to the current and future price of money. Third, the time horizons are different. The costs of macroprudential interventions can be felt today but their benefits are often realised far into the future. And fourth, these benefits – moderating downturns and avoiding crises – are not directly observable. The bad outcomes that macroprudential policies prevent have to be estimated. But counterfactuals are difficult to sell: “it could have been worse” doesn’t quite have the ring of “you’ve never had it so good.” All these complexities and uncertainties make it challenging to implement macroprudential policies and harder to communicate the rationales for them. Over time, and particularly during good times, these challenges can feed a bias towards inaction. As memories of the last crisis fade, complacency sets in and pressures to ease policies re-emerge. When it comes to financial stability, success is an orphan. These tendencies can be exacerbated by similar time inconsistency problems to those that plague monetary policy. Lighter-touch regulation can be a powerful tool for authorities to boost near-term growth, a temptation that is reinforced by governments motivated by electoral cycles and the complacency curve of the financial cycle. In the long-run, the cost of such indulgence is financial and macroeconomic instability, bringing fiscal strains, lower growth, and higher unemployment.

Resilience with a reason. That reason is the ultimate objective that unifies the Bank of England’s monetary and financial functions – the meaning of the central banker’s life which can be found in the opening sentence of our 1694 Charter – “to promote the good of the people of the United Kingdom”. It has been my honour to do so. 34  All speeches are available online at www.bankofengland.co.uk/news/speeches  34
As a result, house prices are now rising in most areas of the country and homebuilding activity has strengthened. Moreover, there is further scope for gains in homebuilding. After all, the current annualized rate of housing starts – around 900,000 – is considerably below the rate consistent with the country’s underlying demographic trends and the expected long-run rate of household formation. By these metrics, housing starts should ultimately climb back to about a 1.5 million annualized rate. The underlying fundamentals supporting business investment are also good. Profit margins have been high and cash flows strong for some time. Credit availability has been gradually improving. For example, the Federal Reserve’s Senior Loan Officer Opinion Survey indicates that banks are continuing to gradually ease their lending standards for commercial and industrial loans. However, against these improving economic fundamentals, we have two important offsets. The first offset is the unusually high degree of fiscal drag, which the Congressional Budget Office (CBO) estimates at about 1¾ percent of potential GDP in 2013.1 The two most important components of this restraint are the end of the payroll tax holiday and the increase in income tax rates this past January, and, more recently, the government spending cuts resulting from budget sequestration. Another new source of drag for the economy is the sharp rise in long-term interest rates, especially residential mortgage rates – that has occurred since May. So far we don’t have much hard data on how this is affecting the housing sector.

With respect to the first metric, we have seen labor market improvement since the program began last September. Over this time period, the unemployment rate has declined to 7.3 percent from 8.1 percent.4 However, at the same time, this decline in the unemployment rate overstates the degree of improvement. Other metrics of labor market conditions, such as the hiring, job-openings, job-finding rate, quits rate and the vacancy-to-unemployment ratio, collectively indicate a much more modest improvement in labor market conditions compared to that suggested by the decline in the unemployment rate. In particular, it is still hard for those who are unemployed to find jobs. Currently, there are three unemployed workers per job opening, as opposed to an average of two during the period from 2003 to 2007. With respect to the second metric – confidence that the economic recovery is strong enough to generate sustained labor market improvement – I don’t think we have yet passed that test. The economy has not picked up forward momentum and a 2 percent growth rate – even if sustained – might not be sufficient to generate further improvement in labor market conditions. Moreover, fiscal uncertainties loom very large right now as Congress considers the issues of funding the government and raising the debt limit ceiling. Assuming no change in my assessment of the efficacy and costs associated with the purchase program, I’d like to see economic news that makes me more confident that we will see continued improvement in the labor market.
However, a good thing came out of this: the Romanian people is virtually the result of a fiscal and monetary decision. This explains the linguistic and historical similarities that stem from our common Latin roots. Nevertheless, I have discovered similar words with other languages as well. For example, in Slovenian and Croatian, a regional ruler used to be called a ban, which was also the case in parts of Romania. Since these rulers had the right to mint coins, money was and still is called bani in Romanian. Looking now at the Baltic countries, maybe it is no coincidence that they and Romania have folk songs called doina and daina, respectively, included in the intangible UNESCO heritage. Romania is a mostly Greek-Orthodox Christian country, the same as Greece, Cyprus and Bulgaria. By the way, let me congratulate our Bulgarian friends on the 140th anniversary of the establishment of their central bank! The legal and political systems of modern Romania were inspired by the French (I limit myself to just mentioning the Napoleonic Code). This is also the case with modern Romanian culture: prominent Romanian artists such as Constantin Brâncuși and George Enescu achieved international recognition in Paris. Coming back to the legal system, the first Constitution of modern Romania in 1866 took after the Belgian one. In addition, the NBR was founded based on the constitutive principles of the Belgian central bank.

FSAP was jointly developed by the IMF and World Bank in 1999 in response to the financial crisis of the late 1990s, when it became clear that financial sector weakness played a critical role in triggering and contributing to the severity and contagion of the economic crisis that ensued, and that both the standard macroeconomic surveillance by the IMF and the financial sector development work of World Bank were inadequate. Thus, FSAP was conceived with the twin objectives of helping countries to identify and resolve financial sector vulnerabilities and thereby helping to prevent future crises. It also aims to foster financial sector development and efficiency. I think these are indeed admirable objectives to which we can all agree. As for the implementation, there are essentially three aspects to the FSAP: The first involves an assessment of the health of the country’s financial system, its short-term vulnerabilities, medium-term risks, and resilience to economic und financial shocks. A range of analytical tools can be used tot this purpose, including stress testing, macro-prudential analysis, and financial soundness indicators. It is here that private sector involvement becomes crucial. Stress testing, as a means to gauge institutional capacity in responding to crises, requires real-world data. And such can only come from financial institutions. The second aspect of the FSAP is an assessment of the country’s compliance with international standards and codes that are considered best practice. Some would be tempted to say that nowadays there are really too many international standards and codes.
The changeover to the euro does not call for extensive reforms in Estonia, rather, it is a more exhaustive utilisation of the opportunities Europe has to offer. •  The changeover to the euro cannot and must not be a seasonal election issue but an area where we proceed from Estonia's interests - hence, common sense, analysis of the economic situation, and knowledge of the theoretical foundations of the EMU. 2  BIS Review 26/2004  •  The European Central Bank has indicated that due to the differences in the economies of the new member states, a single approach suitable for everyone for joining the exchange-rate mechanism, ERM II, and adopting the euro cannot be suggested. Besides, a common approach was not possible for the present member states either. An approach that takes into account Estonia's particulars means that accession is going to be based on the present currency board arrangement and that our application to join ERM II will be submitted as soon as possible. Prior to adopting the euro a country has to be a successful member of ERM II for at least two years. Also Estonia's technical readiness for changing over to the euro should be achieved by mid-2006. If such a scenario materialises, we will be among the first new EU members to adopt the euro.

Vahur Kraft: A successful Estonia - in a successful Europe Speech by Mr Vahur Kraft, Governor of Eesti Pank (Bank of Estonia), at the Euro Conference of Eesti Pank, Tallinn, 3 May 2004. *  *  *  This year spring is going to be different, chirp-chirp! Different, this year different… These are the words by Henrik Visnapuu, an Estonian poet, in his third letter to his beloved Ing in May 1919. May has been a month of important events in the history of Eesti Pank. 85 years ago, on 3 May 1919, the first entry regarding the fixed capital of Eesti Pank was made into the general ledger, and the first payment was accepted into the current account. Thus, 3 May 1919 was the actual day the doors of the Bank opened. (By the way, the historical entry into the general ledger can now be viewed at the Museum of Eesti Pank.) Today, on 3 May 2004, Eesti Pank made its first share capital transfer to the European Central Bank. Eesti Pank has become a member of the European System of Central Banks, one of the owners of the European Central Bank. Today, 3 May 2004 is already the third day of being a fully-fledged member state of the European Union. Two out of three Estonian citizens voted for accession to the European Union in the referendum held last September. What is going to happen now? This is largely up to us.