samchain/econo-pairs-v1 huggingface dataset:
Durmuş Yilmaz: Press conference for the presentation of the Inflation Report Press conference by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the presentation of the Inflation Report, Ankara, 29 April 2010. *  *  *  Distinguished Guests and Members of the Press, Welcome to the press conference held to convey the main messages of the April 2010 Inflation Report, one of the most important communication tools of the inflation-targeting regime of the Central Bank. The report typically summarizes the economic framework addressed in monetary policy decisions, elaborates global and domestic macroeconomic developments and presents the medium-term inflation forecasts, which have been revised in view of previous quarter developments, along with the monetary policy stance. Before moving on to the Central Bank’s assessments on the inflation outlook and economic activity, which I will share with you in detail shortly, I would like to summarize the current global conditions. The recovery in global economic activity and the normalization of the international financial system have continued during the first quarter of 2010 (Figure 1). However, distressing levels of government debt, lingering problems across credit markets, and high levels of unemployment rates, all suggest that completely resolving problems across developed economies is not likely over the near term (Figure 2). Although the recovery across developing economies seems to be stronger, ongoing problems across developed economies – with their prominent role in global trade – still create downside risks for developing economies.

In this regard, while the Gross Domestic Product increased by 6 percent on an annual basis in the last quarter of 2009, it decreased by 4.7 percent across the year (Figure 23). Seasonally adjusted data indicate continuance of the recovery process in national income as of the second quarter of 2009 (Figure 24). Data regarding the first quarter of 2010 indicate that the rebound in Domestic Demand is gradually becoming stable and broad-based. The influence of policy rate cuts besides the hikes in public expenditures are getting more pronounced and a relatively more robust activity in sectors sensitive to domestic demand is being witnessed. In this respect, the analysis of the recovery process in industrial production indicates that besides the sectors stimulated by fiscal incentives and their intermediate input suppliers as well as the nondurable goods sector and sectors with strong links to the construction sector have been on the rebound (Figure 25). There is no significant improvement in external demand. The global growth outlook continues to dampen economic activity, particularly in sectors that are relatively more sensitive to foreign demand. Following the recent crisis, manufacturing firms that mostly serve external markets have been operating at lower capacity than local market oriented firms (Figure 26). Thus, in line with our previous forecasts, domestic demand has remained more robust than foreign demand. Yet, aggregate demand uncertainty continues to be a major concern, as inventory buildups have remained limited.
Percent 4  Norges Bank Economic perspectives 15 february 2018  10 Wage growth (l.h.s) Unemployment (r.h.s.) 9 3 8 2 7 1 6  0  5 2003  2005  2007  2009  2011  2013  2015  2017  1) Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, Portugal, Spain, South Korea, Sweden, Switzerland, the UK and the US. Unweighted average. Sources: Thomson Reuters and Norges Bank  Expansionary monetary policy in many countries Never before have global interest rates been as low as today over such a long period (Chart 10). The interest rate level was moving down long before the 2008 crisis. What lies behind this is a prolonged decline in long-term real interest rates owing to structural changes. Low productivity growth and weaker labour force growth have diminished the growth capacity of advanced economies and dampened the willingness to invest. At the same time, groups and countries with a high saving rate account for a larger share of income growth, partly owing to demographic changes and wider income gaps. Both lower investment and higher saving have contributed to depressing real long-term interest rates. Chart 10 Global real interest rates. Yield on 10−year government bonds adjusted 1) for inflation. 14 OECD countries.

The result is lower activity and lower welfare. Norges Bank Economic perspectives 15 february 2018  In the distant past, the central bank was to safeguard the value of the country’s monetary unit in terms of a precious metal. This was later replaced by fixed rate regimes. Various forms of fixed exchange rate regimes are still in use in many countries. However, since 1990 an increasing number of countries have chosen to link monetary stability to a numerical inflation target. Since the financial crisis, all of these countries have maintained their inflation targeting regimes. This reflects their overall positive experience with this framework. It did not get in the way of a powerful response to the financial crisis. With a floating exchange rate and a credible inflation anchor, monetary policy could be geared to stabilising the economy. In Norway too, inflation targeting has functioned well. Inflation has remained low and stable since it came down in the early 1990s (Chart 13). We can now look back on a quarter century of stable prices. At the same time, employment variability has been lower since 2001 than in previous periods despite the shocks to the Norwegian economy. 1)  Chart 13 Inflation in Norway. Four−quarter change.
Suffice to say, time is very unlikely to tell whether Mr Viniar’s empirical observation proves correct. Fortunately, there is a simpler explanation – the model was wrong. Of course, all models are wrong. The only model that is not wrong is reality and reality is not, by definition, a model. But risk management models have during this crisis proved themselves wrong in a more fundamental sense. They failed Keynes’ test – that it is better to be roughly right than precisely wrong. With hindsight, these models were both very precise and very wrong. For that reason, 2008 might well be remembered as the year stress-testing failed. Failed those institutions who invested in it in the hope it would transform their management of risk. Failed the authorities who had relied – perhaps over-relied – on the signal it provided about financial firms’ risk management capabilities. And, perhaps most important of all, failed the financial system as a whole by contributing, first, to the decade of credit boom and, latterly, the credit bust. That is a stark conclusion. But it is a conclusion which is hard to escape. When tested against real stress, large parts of the financial system seized-up and a number of financial institutions failed. Against that backdrop, now is as good a time as any for candour about what went wrong.

The Rt Hon Sir Edward George GBE: Central bank independence  Speech by The Rt Hon Sir Edward George GBE, Governor of the Bank of England, to the SEANZA Governors’ Symposium in Colombo, Sri Lanka, on 26 August 2000. *  *  *  Governor Jayawardena, fellow central bankers, I am honoured, personally and on behalf of the Bank of England to participate in your celebrations. On behalf of the Bank of England, and, I am sure, of all your guests here this morning, I congratulate you, Mr Governor, on the great contribution that the Central Bank of Sri Lanka has made to the development of your beautiful country in your first fifty years and I wish you continuing success in your task in the years to come. You invite me to speak about Central Bank Independence, which of course I am happy to do - although I should perhaps make clear at the outset that it is a concept which I find somewhat elusive. Like so many other debates, the debate about central bank independence often seems to become unduly polarised. At one extreme it seems that some of those who resist central bank independence as undemocratic - or even some central bankers who favour it - assume that it involves an elite body of individuals, who, once appointed are, by virtue of statute, beyond political influence, with extensive but only generally-defined powers to affect the financial environment - and hence the lives of individuals and businesses throughout their currency area.
The ECB will not be forced to step in for a lack of policy implementation. Third, OMTs will not create excessive risks for euro area taxpayers. Such risks would only materialise if a country were to run unsound policies. This is explicitly prevented by the ESM programme. And we have been very clear that each time a programme starts being reviewed, we will routinely suspend operations and resume them only if the review has been concluded positively. This will ensure that the ECB intervenes only in countries where the economy and public finances are on a sustainable path. Fourth, OMTs will not lead to inflation. We have designed our operations so that their effect on monetary conditions will be neutral. For every euro we inject, we will withdraw a euro. In our assessment, the greater risk to price stability is currently falling prices in some euro area countries. In this sense, OMTs are not in contradiction to our mandate: in fact, they are essential for ensuring we can continue to achieve it. Moreover, we see no signs that our announcement has affected inflation expectations. They continue to be firmly anchored. This is testament to our track record on price stability over the last decade and our credible commitment to maintaining price stability. The citizens of the euro area can be confident that we will remain permanently alert to risks to price stability.

Second, financial instability can impair the linkage between monetary policy and financial conditions. The central bank may move to a much more accommodative monetary policy stance, but this may not lead to much improvement in financial conditions. We see this clearly in spreads and risk premia during periods of financial stress. Depletion of capital in the banking system or the interaction of frictions and market failures may also lead to constraints on the availability of credit following a financial shock. As a recent U.S. example of the second issue, households with lower FICO scores have had difficulties in refinancing  1  Krishna Guha, Marc Saidenberg and others on my staff contributed to these remarks. 2  As always, what I have to say here today reflects my own views and not necessarily those of the FOMC or the Federal Reserve System. BIS central bankers’ speeches  1  their mortgages or in obtaining new mortgages to purchase a home. This stems from worries by lenders about put back risk – that such mortgages might be put back to them by Fannie Mae or Freddie Mac should the mortgages become nonperforming. For any given reduction in mortgage rates relative to normal levels, this reduces the support for the housing sector and consumption. Thus, another lesson of the crisis is that monetary policymakers need to be more attuned to how the condition of the financial system influences how monetary policy changes affect financial conditions. Third, the linkage between financial conditions and aggregate demand may also be impaired.
Measuring these broader risks is harder today because the classic array of historical stress events drawn from the past 25 years of financial crises are probably even less valuable than they were as an illustration of how market dynamics might unfold today in response to similar changes in asset prices and credit losses. Those past crises would likely cause less damage today, if they were to recur, because of the many changes in the structure of our financial system - namely, the greater dispersion of credit and market risk, the improvements in risk management, the size of the capital cushions, and the improvements in many parts of the payment and settlement infrastructure. But most crises come from the unanticipated. Assessing a firm’s exposure to risk in the tail of the distribution requires, among other things, an evaluation of the impact of the failure of a major counterparty and the impact that failure might have on other counterparties and on market prices. It requires, for the largest institutions, an understanding of the constraints the firm may face in its ability to adjust positions or hedge against further losses without amplifying the shock. And it requires anticipating potentially adverse effects on market liquidity, as other market participants react to actual and anticipated losses. In the financial system we have today, with less risk concentrated in banks, the probability of systemic financial crises may be lower than in traditional bank-centered financial systems.

Notably, some studies have shown that the ratio of Asian exports for final consumption within Asia has risen, though varying among individual countries. For example, approximately 70 percent of Indonesian exports to China are for final consumption in China. Such ratios for Singapore and Korea are 50 and 40 percent, respectively. That said, it is wise not to jump quickly to conclusion because Asian economies and trade remain critically linked to the G3 economies. While this negative spillover from advanced economies to Asian economies could be partially cushioned on the trade side, I have greater concern on the potential spillover through volatility in international capital flow and financial market movements. In addition to the risk aversion in time of market stress, emerging market economies have tried to live with spillover from exceptionally easy monetary policy in advanced countries. Such practices have created excess global liquidity leading to volatile capital flows into emerging market countries  BIS central bankers’ speeches  1  including Thailand. Moreover, excess global liquidity has been an important factor behind the rapid rise in oil and other commodity prices. Unless the advanced economies manage to get themselves out of sluggish growth path, all of us have to be vigilant and cannot rule out the possibility that the US may need to find creative policy actions to stimulate its economy.
Since 1995 Swedish house prices have risen by more than 150 per cent; the corresponding figure in the United States is around 115 per cent. At the same as house prices have soared, inflation in Sweden has been moderate and consumer prices have only risen by 14 per cent since 1995 (see figure 2). There are several factors behind the upturn in Swedish house prices; Swedish households’ real incomes have grown, their financial wealth has increased and in addition real interest rates have been low. Although more housing has been built, it has not been enough to meet the demand. The percentage of Swedish municipalities reporting a shortage of housing doubled to 42 per cent between 2002 and 2007 according to statistics from the National Board of Housing, Building and Planning. More than half, or 60 per cent, of the population now live in municipalities with housing shortages. Households’ debt ratio, that is their debts in relation to their disposable income, has risen rapidly in recent years and is now around 150 per cent. It is difficult to compare the current debt ratio with earlier periods, as these have been marked by the conditions prevailing at the time. For example, the debt ratio that preceded the credit boom at the end of the 1980s was marked by the regulated credit market and did not reflect either households' willingness or ability to bear debt. The period after this was affected by the economic crisis and institutional changes with an ensuing rapid credit crunch.

In addition, there is uncertainty over how monetary policy affects asset prices. The Riksbank conducts what is known as flexible inflation targeting. The objective is that the annual change in the consumer price index (CPI) shall be 2 per cent, but we also attach some importance to attaining a balance in production and employment. Asset price movements are normally included within the scope of flexible inflation targeting. We include changes in asset prices and other financial variables in the balance when we make our forecasts. However, the Riksbank has no target for property prices. 1  2  IMF World Economic Outlook, April 2003. BIS Review 60/2008  The Riksbank’s view is close to the reasoning that changes in asset prices should only be allowed to affect monetary policy to the extent that they affect our forecasts. But such a view is based on the forecasting models used being able to include the full effect of house prices on total demand in the economy. This is not the case for the Riksbank or other central banks; there are no forecasting tools that can entirely capture the effects of changes in property prices. The forecasts therefore have to be supplemented with qualitative assessments. How has the Riksbank’s stance affected monetary policy in practice? When the Riksbank raised the repo rate in January 2006 borrowing and house prices had a more pronounced effect on the decision.
Gazi Erçel: Focus on inflation targeting  Opening remarks by Mr Gazi Erçel, Governor of the Central Bank of the Republic of Turkey, made at the Conference on Inflation Targeting which was organized by the Central Bank of the Republic of Turkey in Ankara on 19 October 2000. *  *  *  I am very honored to present the opening remarks at this conference on Inflation Targeting (IT) Framework. First I would like to extend our appreciation to the lecturers of the Conference who came a long way geographically, and considering the state of the economy they reach. The issues that are going to be addressed will be of great interest, particularly for developing and dis-inflating countries. The attendance of so many speakers from the Central Banks and international institutions is particularly motivating. This Conference will review the country experiences on inflation targeting, particularly touching on the best ways to design policy objectives, responses, and implementation issues. Some papers will consider not only inflation targeting framework, but also the case of economies during the shift to low inflation. Let me begin my remarks by focusing on a framework that has been widely validated among academics and policymakers during the last 10 years. Inflation targeting is an innovative approach to monetary policy being applied by a growing number of central banks of not only industrial but also emerging market countries of the world. Now, more than ever, businesses are operating in a rapidly changing world. Even the marginal uncertainties have become important.

The current inflation rate does not therefore provide sufficient information to determine the level at which interest rates should be set now. 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 of 2½ per cent. Using this time horizon, we avoid substantial variations in output and employment. A shorter horizon than two years would result in wider swings in production. Credit developments and developments in equity and property prices influence inflation. With an inflation targeting regime, we take these variables into account to a certain extent when setting interest rates. Equities and dwellings account for a substantial share of household wealth. Higher equity and house prices increase the value of this wealth. The increase in wealth can relatively rapidly result in rising consumption. Several studies indicate that an increase in the value of housing wealth is more likely to lead to higher consumption than a corresponding increase in the value of equity wealth. Higher prices for commercial buildings may be passed on in the form of higher prices for goods and services. Developments in asset prices can thus affect inflation more directly. In Norway, a high proportion of households own their own dwelling. Even when we include securities funds and some insurance claims, Norwegian households’ housing wealth is far higher than their equity wealth.
However, it is hard to imagine the opposite situation of a central bank fully engaged in the management of expectations without trust from the public.1 This also applies to communication. We can discuss alternative strategies to make sure that the message issued by a central bank is adequately understood and internalized. However, there is little that a good communication strategy can do if the public does not trust the central bank.2 1  Christelis et al. (2016) have formally explored this for the Europe using micro data, finding that higher trust in the ECB lowers inflation expectations on average, and significantly reduces uncertainty about future inflation, even after controlling for people’s knowledge about the objectives of the ECB. Similarly, Mellina and Schmidt (2018) find that having greater trust increases the probability of expecting unchanged prices and decreases the likelihood of expecting either slightly or sharply rising prices over the medium term. 2  Through behavioral insights, Bholat et al. (2018) show that public’s trust in the Bank of England can be further improved by enhancing the communication with the public, particularly at times when trust in public institutions has fallen and responsibilities delegated to central banks have increased. Page 3 of 8  Central Bank of Chile July 2019  Approaching institutional credibility from stakeholders’ trust has a number of conceptual and operational advantages. First, there is a large body of research assessing its value: trust is at the heart of societies and a major component of social capital.

However, according to the law, the Riksbank shall also support the objectives of general economic policy without setting aside the inflation target, in order to maintain sustainable growth and high employment. As the Swedish economy is approaching balance in many respects and the long-term inflation expectations accord with the target, the conditions for carrying out monetary policy are more favourable in many ways than before. This does not prevent there being many components of uncertainty now as well. Major structural changes are taking place in the world economy to some extent driven on by information technology. Deregulation, EU membership, and stiffer competition are other factors that can be assumed to have an effect on the economy’s mode of functioning, although it is difficult to say how and over what period. I am planning to take up some factors here in the risk scenario that must be taken into consideration in the ongoing evaluation of monetary policy. One issue concerns the extent to which we, inter alia as a consequence of the development of information technology, will see a higher productivity growth than we had expected and which, all other things being equal, would create scope for higher demand without threatening the inflation target. Another way of putting this question is whether we can expect to be on our way into something that is called “the new economy” in debate.