samchain/econo-pairs-v1 huggingface dataset:
2  BIS central bankers’ speeches  First, structural unemployment is still high and potential output growth low in the euro area. It is therefore imperative to make our economic structures more efficient. This calls for action to raise productivity and improve the business environment, also by providing adequate public infrastructure. Second, fiscal policies should play their role in the economic recovery. Of course, the fiscal rules of the European Union must not be called into question. But all Member States can and should strive to make the composition of their fiscal policies more conducive to growth and, where available, countries with fiscal space should use it. Finally, we need a clear vision for EMU. I am aware that political attention is focused elsewhere right now. But leaving EMU unfinished will leave us too fragile and vulnerable to be able to deal with future shocks. Completing banking union and financial union One area that deserves particular attention is the finance sector. This year’s ECB Annual Report outlines the key challenges the euro area is facing, namely (i) a further increase in risk premia, a decline of financial asset prices inducing capital losses, in the context of possible emerging market stress and persistently low commodity prices; (ii) weak profitability for insurers and for banks, aggravated for some banks by non-performing loans (NPLs) inherited from the crisis; (iii) sovereign and corporate debt sustainability concerns; and (iv) the potential for stress in the investment funds sector – and shadow banking more broadly.

6  Farmer and Hepburn (2014). 7  Hansen and Sargent (2010). 4  BIS central bankers’ speeches  doing so for the next 12 quarters. Japan has had no equivalent period of sustained growth at or above its pre-crisis rate in the past 25 years. As for deflationary threats, one guide is found in market measures of medium-term inflation expectations. At the 3–5 year horizon, consensus inflation expectations in Japan have averaged around 1% over the past 15 years. In the euro-area, inflation expectations have recently fallen to around 1.8% on deflationary fears. In the UK, meanwhile, inflation expectations have remained relatively stable at around the 2% target throughout the crisis period. Financial markets, at least, do not appear to be fearful of deflationary ghosts in the UK. A second uncomfortable scenario, the flip-side of the first, would be if inflationary pressures instead took hold. Again, it is important not to dismiss this risk out of hand. Monetary policy is in unknown territory. The most extraordinary dose of monetary medicine perhaps everwitnessed has been administered to a patient now whistling their way around the hospital ward. An over-reaction to the drugs cannot be ruled out. There are already some signs of the economy’s pulse quickening. The confidence fairy is back, after six years in rehab. Levels of consumer confidence are now above 2007 levels, retail spending is rising at its most rapid rate since 2004 and levels of job security are at their highest since at least the 1990s.
More specifically, the origin of the financial crisis showed that even in a relatively calm economic environment it is possible for financial imbalances and risks to build up and lead to disruptions spreading throughout the financial system and causing substantial costs to society. After the financial crisis there has been intensive work around the world on producing tools that can be used to prevent these systemic risks from arising. And a largely new policy area has taken shape; macroprudential policy, which is responsible for these tools. In principle everyone agrees that this policy area is needed and it has begun to be implemented around the world with slightly different institutional set-ups. In Sweden, of course, Finansinspektionen (the Swedish financial supervisory authority) has been given the responsibility for the macroprudential policy tools. 1 On the other hand, the responsibility for the overall task of promoting a stable and smoothly-functioning financial system will be divided between Finansinspektionen, the Riksbank, the Government and the Swedish National Debt Office. So macroprudential policy is intended to be the first line of defence in counteracting financial imbalances that can affect macroeconomic and financial stability. There is broad agreement on this. The issue now being discussed internationally, and on which the jury is still out, is how strong this line of defence can be and whether other policy areas may at least sometimes need to contribute to counteract this type of risk. A more specific question is whether monetary policy should also take into account risks linked to financial imbalances.

Employees and businesses have at times looked backwards – and may not recognise that the outlook has changed – when determining wages and conditions that influence employment and profitability. This was the case in 1974 and 1975 and again in 1986 and 1987. It was the case in 1998 and also in 2002. In each case, the result was high interest rates, stagnating production and rising unemployment. Should the recent sharp rise in employment result in unexpectedly high wage growth, the interest rate will again have to be set at a high level to keep inflation subdued. We may again experience a high interest rate level in Norway relative to other countries over a longer period. This could translate into a pronounced setback in production and employment. The Norwegian business sector has become increasingly efficient, inducing companies to increase their workforces. During the recovery after the turn of the millennium, productivity growth jumped up again. This resulted in strong growth and low inflation. Rising imports from low-cost countries and high prices for many of our export goods resulted in a substantial improvement in Norway’s terms of trade from the end of the 1990s. Norway’s situation differs from that of our neighbouring Nordic countries in that both Sweden and Finland have recorded a deterioration in their terms of trade. They sell large volumes of hightech products but at falling prices. Productivity and terms-of-trade gains have provided the Norwegian economy with a historically strong income boost.
17 Inferring policy preferences from the MPC’s published forecasts in this way is not necessarily straightforward, however, because the MPC’s forecasts are conditioned on the market-implied path for interest rates. Implicitly, then, the assumption would be that the MPC’s forecasts and reaction function are, on average, well understood by the market. 18 This assumes a Phillips Curve slope, 𝜅, of ½. The lines of best fit in Charts 1 and 2 have slopes of around minus 0.3 for the period as a whole and minus 0.55 over the post-crisis period. With a value of 𝜅 = 0.5, this suggests 𝜆 of between 0.1 and 0.2 for the whole period and 𝜆 of around ¼ for the crisis period alone. 10  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  10  To put this into some context, consider the stated and revealed preferences of the FOMC. Chair Yellen has referred to a “balanced approach” to trade-off management, implying equal weights on inflation deviations and the unemployment gap. 19  Econometric studies for the US provide a range of estimates for lambda,  centred around ½ albeit with significant estimation uncertainty, with some studies finding evidence that the FOMC’s implied lambda has also varied over time. 20  4. Why there isn’t a simple rule to achieve society’s inflation objective? This exercise illustrates how the MPC has sought to do what society has asked.

Ravi Menon: Monetary Authority of Singapore's Annual Report 2019/20 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS' Annual Report 2019/20 Virtual Media Conference, Singapore, 26 July 2020. * * * Good morning, and welcome to MAS’ first virtual media conference for the annual report. I hope everyone has been keeping well. GLOBAL ECONOMY Let me begin with the global economy. There are three points I’d like to make. The world is facing an unprecedented economic situation. The outlook is highly uncertain. Recovery will be uneven. The world is facing a public health crisis and a consequent economic crisis. The COVID-19 virus has now spread to all corners of the world. Measures necessary to contain the pandemic – lockdowns, movement restrictions, border controls, and safe distancing – have brought many economic activities to a grinding halt. We are now in the midst of an economic recession without modern precedent. The global economy contracted nearly 14% q-o-q [1] in the first quarter of 2020 – this is almost three times deeper than the sharpest decline seen during the Global Financial Crisis. The contraction in the second quarter is likely to have been even deeper, since this is when economies outside China were most severely affected by the virus and shutdown measures. The policy responses to the COVID-19 crisis have been equally unprecedented – in scale and in speed. Governments injected massive fiscal stimulus, estimated on average to be twice the fiscal impulse in 2009.
The strongest pension funds reduced significantly their allocation, effectively cutting it in half, while weak funds maintained or increased their allocation. By the end of the period, the strongest funds had half the equity allocation of the weakest. At one level, these portfolio reallocations made sense – the strongest protecting their surpluses by de-risking, the weakest trying to close their deficits by re-risking. Yet, from a longer-term or societal perspective, these reallocations are troubling. To cushion the risk cycle, we would wish to see stronger long-term investors purchasing risk when it was cheap. That would benefit both investors and the economy. Capital that can afford to be patient should be patient. But those funds with the strongest shoulders appear instead to have ducked for cover, while the weakest appear to have engaged in a gamble for resurrection. In the longer-term, this type of behaviour is likely to worsen returns to investors. It will also amplify cycles in the financial system and economy by draining risk-taking when it is already weak. Patient capital ought to part of the solution to the long-term financing puzzle. In practice, it may have been part of the problem. Regulatory policy That naturally begs the question of what, if any, policy response might best deal with the risks and opportunities asset management poses. From a potentially long list, I will focus on three areas. First, Too-Big-to-Fail. Here, the jury is still sitting.

Thus a negative number indicates a reduction in percentage allocation to equities, and may not indicate a reduction in total exposure to equities (if total flows have been large). Reallocation is calculated using data on quarterly flows into (or out of) equities in order to adjust for the impact of revaluation effects. The S&P 500 is smoothed by taking the growth of the 8 quarter average on the 8 quarter average a year earlier. 12  BIS central bankers’ speeches  Chart 7 Asset allocation of UK insurance companies and pensions funds Per cent 100 80  Chart 8 Portfolio share of equity of the UK DB PFs split by funding strength(a) Index; Dec 2005=100 140  Portfolio share of equities 70  120  60  100  50  80  40  20  60  30  0 87 89 91 93 95 97 99 01 03 05 07 09 11 13 UK equities Overseas equities UK corporate bonds UK government bonds Overseas bonds Mutual funds' shares Derivatives Other  40  60 40  Weakest funded (right-hand scale)  20 0  20  Strongest funded (right-hand scale) FTSE All-share, annual average (left-hand scale)  06  07  08  09  10  11  12  10 0  Source: ONS and Bank calculations  Source: Pension Protection Fund and Bank calculations  (a) Bonds includes money market instruments, medium and long term bonds. The split of overseas bonds by issuer is not available.
They are schooling, housing and shopping, finance, jobs and transport. These are not problems that central banks’ tools can help solve. But any structural plan for the economy worth its salt needs I think to have a song to sing about each of the big six, not just in London and Leeds, Cardiff and Edinburgh, Belfast and Birmingham, but as importantly in Sunderland and Stoke, Blackpool and Bradford, Boston and Orkney. (d) Citizens Panels  Last but not least, there is a recommendation in today’s RSA report which is aimed explicitly at the Bank of England. Building on the RSA’s own project, it is that the Bank set up its own set of regional citizen councils, centred around our Agency network. The aim is to establish, in a structured, systematic and comprehensive way, a two-way dialogue and collaboration between the Bank and a panel of citizen representatives on the economy, financial system and policy, as a means of enhancing the understanding of both parties. This is a bold recommendation. That language would usually preface an official like me lavishing praising on this recommendation, before gently burying it. But not today. I am delighted to announce that the Bank intends implementing in full the RSA’s recommendation. During the course of this year, we will begin the process of setting-up regional citizen councils using our Agency network. This is a natural next step, and will become a central plank, of the Bank’s engagement strategy in the years ahead.

There is now a wide body of evidence, drawn from a wide variety of settings, on the benefits of combining the insights from expert and non-expert sources when making sense of a complex world, when forecasting an uncertain future. 3  Harvesting insights from a non-expert audience appears, in these uncertain settings, to be especially valuable by providing diverse perspectives and different insights. If we turn from understanding to trust, the picture has many similarities. Trust lies at the heart of the social contract between institutions and societies, between policymakers and citizens. But the very nature of trust appears to have changed rather fundamentally over the recent past. Societies and individuals have 4  undergone what Rachel Botsman in her recent book calls a “trust shift”. Where once trust was institutionalised and anonymised, today it is socialised and personalised. This shift in the gears of trust has had consequences. Public institutions of all stripes have been one of the 5  casualties, with measured trust having fallen steadily over the recent past. Most central banks have not escaped these shifting sands, in particular since the global financial crisis. For them and us, the age of innocence, or at least the era of taking public trust as given, may be over. That matters. Credibility and trust are the secret sauce of central banking. They are what enable them to shape expectations in ways which stabilise the economy and financial system. An economy or financial system without trust, history tells us, ceases to be a system.
This makes intuitive sense. In the end, workers are interested in the purchasing power of their pay, not its money amount. They bargain over real wages. So inflation, or its expectation, affects pay with a coefficient close to one. Put differently, in the course of wage bargaining, employers insure workers against inflationary shocks, at least on average. Movements in inflation have been a key driver of pay growth historically. They are the main reason why the Phillips curve shifted downwards significantly as the Great Inflation of the 1970s gave way to the Great Moderation of the late 1990s. That period saw inflation expectations ratchet down to target levels where they have remained anchored since (Chart 8). Pay growth has, in response, fallen pretty much one-for-one. This explains the first downwards shift in the Phillips curves shown in Charts 6 and 7. 1  For example, Coibion and Gorodnichenko (2015), Gordon (2013), Vlieghe (2018), Saunders (2017) and Tuckett (2018). In statistical terms, you cannot reject the null that their slopes are the same. Both measures have a statistically significant impact on wage growth. The regressions in Table 1 use inflation expectations as they give a slightly better empirical fit. 2 3  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  A second key determinant of wage growth is unemployment or, more precisely, the gap between unemployment and its longer-run trend (sometimes called the NAIRU or Non-Accelerating Inflation Rate of 4  Unemployment).

Consistent with the more traditional banking models in this region, there are now increasing calls for a return to basic banking and its clear separation from higher risk-taking activities. This is part of the broader efforts to create a safer global financial system where markets and institutions are more transparent, less complex, and less leveraged than they are today. While the banking sector in ASEAN has not reached the degree of complexity observed in the advanced economies, the region has to be mindful of the consequences as financial institutions evolve to become increasingly regional in orientation. Indeed, such growth must be commensurate with the capacity and capability of both the financial institutions and the regulators to manage and oversee the associated risks. Strengthened supervisory intensity and effectiveness, a core component of the financial sector reforms, is an essential pillar to check against unfettered innovation and risk-taking behaviours and promote strong incentives for prudent risk management. ASEAN will have to pursue an outcome that facilitates innovation and efficiency, without resulting in undue risks and unwanted costs on both the financial system and the overall economy. Second, is the stronger focus on more responsible and sustainable financial business practices. Following the recent global financial crisis, there is a stronger international emphasis for appropriate risk-aligned mechanisms, particularly on compensation frameworks, which provide incentives for financial innovation and growth, while not compromising financial stability.
At the Green Swan Conference, we have a diverse and inclusive assembly comprising some of the best minds and influential figures. I am confident that the conversations we will have over these two days will add impetus to what we can do together in the fight against climate change during this “critical decade”. Thank you, and I wish you all a fruitful conference. [1] Examples include the Sustainable and Responsible Investment Guide for Central Banks’ Portfolio Management and the subsequent update in a progress report. [2] International Network for Sustainable Financial Policy Insights, Research and Exchange (INSPIRE). © 2022, Government of Singapore.

The rise in prices for domestically produced goods and services pushed up CPI inflation until this year, but since the beginning of the year this measure of inflation has edged down again. The 12-month rise in prices for goods and services produced in Norway, excluding energy, was 1.3 per cent in September. The reduction in day-care rates in January this year has pushed down domestic inflation by an estimated 0.3 per cent over the past year. The rise in prices has been lower than expected for both goods and services. It seems that strong competition between various producers within the food industry and the construction industry has curbed inflation. In addition, productivity growth in retail trade has been high in the past few years. Intensified competition may also have restrained the rise in prices for banking and insurance services. Continued strong competition, both foreign and domestic, and high productivity growth in recent years will probably contribute to curbing domestic inflation in 2007. Several factors, however, point to higher inflation in the period ahead, but the rise in prices will probably pick up somewhat later than the historical relationship between inflation and capacity utilisation in the economy would suggest. Capacity utilisation in the Norwegian economy is picking up. This will contribute to a higher rise in prices for domestically produced goods and services. A tighter labour market will probably lead to higher wage growth in the coming years.
However, to the extent that stablecoins or CBDCs supplant private bank money or expand overall demand for central bank liabilities, they could also increase the size and  A larger balance sheet could cause some central banks to adapt approaches to asset composition to manage the influence of a larger balance sheet on the policy stance. For example, a central bank could buy short-duration assets to support the new demand for central bank liabilities and differentiate these asset purchases from those intended to foster accommodative financial conditions. These issues may also require new operational approaches for central banks. In some circumstances, the balance sheet could need to adjust rapidly because of unexpected large shifts in liability demand. This could require new thinking by central banks on the appropriate approaches to implementation with potentially a different mix of assets or tools to add liquidity to the system. Shortduration assets or temporary liquidity providing operations would also allow flexibility if an increase in liability demand is expected to be short term. Conclusion The innovation occurring in money and payments has the potential to alter the existing two-tier monetary system upon which current monetary policy implementation frameworks are designed. How things evolve from here is uncertain, and the impact of these innovations could be revolutionary, or more evolutionary. But imagining an environment in which new forms of private and public money and payments could coexist is helpful in adapting implementation frameworks that will enable central banks to continue to achieve their desired policy stance in the future.

But this design may not ultimately be the most efficient use of central bank liabilities for the financial system, because an important role for commercial banks in the two-tier monetary system is their ability to support the provision of credit in the economy.16 Stablecoins backed by other instruments, such as high-quality liquid assets, could moderate growth in the central bank’s balance sheet relative to a stablecoin backed entirely by central bank reserves. However, this structure would also give rise to liquidity risk for stablecoin issuers, which might in turn give rise to a need for a backstop source of funding. These considerations raise important questions for how best to integrate digital currencies and ensure smooth market functioning and interest rate control in times of stress. How might the central bank’s balance sheet adapt? Possibly the biggest question over time for monetary policy implementation is how much of the central bank balance sheet should be used to support innovation in currencies. The current two-tier system of money and payments has central bank balances at its center, but also features an expansive set of private money offered through bank deposit balances. Innovation in payment systems may have clear benefits for consumers and businesses, and private currencies backed by safe central bank balances or other highly liquid safe assets are certainly better than alternatives created by less regulated firms and backed by lower quality or illiquid assets.