samchain/econo-pairs-v1 huggingface dataset:
For instance, we sponsor the Consumer Credit Panel, or CCP, a quarterly report on household credit based on a large sample of credit data from Equifax. We have also developed the Survey of Consumer Expectations, or SCE, a monthly survey of consumer expectations about inflation, the labor market and household finance. These reports and summary data are available from the New York Fed’s Center for Microeconomic Data, which can be accessed on the Bank’s website, newyorkfed.org. Aside from producing these public reports, New York Fed researchers also use the underlying data to do detailed econometric analysis, some of which forms the basis of the blog series you’ll hear about today. In some cases, we are able to link the CCP, SCE and other data sets to derive insights into a wider set of factors affecting workers and consumers, such as educational attainment, student debt burden, job satisfaction, job transitions, access to credit and housing choices—and consumer expectations about many of these factors. Why do we do this? Why is it important to generate insights about individual workers rather than relying just on analysis of the aggregate data? The first, and most obvious, point is that the aggregate masks the experiences of individuals. Not all workers and consumers experience the economy in the same way. Employment, wage and income growth, housing, education, credit and a host of other outcomes vary significantly across different cohorts of individuals and these differences in turn can vary over the business cycle.

Regardless of the specific details, the key is that differences across individuals can be important for understanding how the economy works, even in the aggregate. For all these reasons, the Research group at the New York Fed is committed to continue our work on heterogeneity, across several dimensions of what we do. We are always looking for ways to expand and deepen our knowledge, to enhance the data that is available to our economists and others to do deep, sophisticated research on these topics, and, critically, to publish the work so that we are adding to the store of knowledge both among academic researchers and among policymakers. We are well-placed to understand what the important questions are, to generate the data needed to answer them and to speak to diverse audiences about the results. This webinar and blog series are important parts of our strategy for communicating about our work and for advancing thought about the critical role that heterogeneity plays in our economy. Thank you. 2/2  BIS central bankers' speeches
It was an important causal element of the financial crisis that part of the financial sector had escaped this safety net. This applied in particular to cross-border banking. Let me take two examples to illustrate this. 1  Thornton and Bagehot are the classical references: Henry Thornton (1802). “An Enquiry into the Nature and Effects of the Paper Credit of Great Britain”. London: George Allen & Unwin . Bagehot, Walter. 1866. “What a Panic Is and How It Might be Mitigated”. Republished in Collins, Michael. 1993. Central Banking in History. Vol. 7. Aldershot, England. Edward Elgar, Walter Bagehot (1873). “Lombard Street: A Description of the Money Market”. 2  Goodhart and Dimitrios give a recently published summary of the historical development of the financial stability role of central banks: Charles Goodhart and Dimitrios P. Tsomocos (2012). Analysis of financial stability. In “The Challenge of Financial Stability: A new model and its applications”, eds. Charles Goodhart and Dimitrios P. Tsomocos. Edward Elgar. Cheltenham, UK. BIS central bankers’ speeches  1  First, the euro area as a whole had a more or less balanced current account position during the build-up to the financial crisis. A fact that drew less attention at the time, however, was that European banks had built up huge USD-denominated balance sheets that had mismatches, especially in terms of maturity.

Philipp Hildebrand: Global and Swiss economic outlook – overview for 2011/12 Introductory remarks by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Berne, 15 December 2011. *  *  *  The Swiss National Bank (SNB) reaffirms its commitment to the minimum exchange rate of CHF 1.20 per euro. It will continue to enforce this minimum rate with the utmost determination. It is prepared to buy foreign currency in unlimited quantities. The target range for the Libor remains at 0.0–0.25%, and the SNB continues to aim for a three-month Libor close to zero. Even at the current rate, the Swiss franc is still high and should continue to weaken over time. The SNB stands ready to take further measures at any time if the economic outlook and the risk of deflation so require. In the third quarter, the global economy picked up again slightly, thanks to positive stimuli from Japan, the US and China. Growth in Europe, however, remained weak and the economic outlook for the euro area deteriorated. In Switzerland, the pace of growth slowed considerably in the third quarter. The substantial appreciation of the Swiss franc over the summer is weighing heavily on the Swiss economy. For 2011 as a whole, real GDP growth of 1.5–2.0% can be expected. This is only because of the favourable economic development in the first half of the year. For 2012, the SNB is expecting economic growth in the order of 0.5%.
The economy was already closely integrated with the EU through trade and finance; it had close similarities with the euro area in the sectoral composition of output and employment, as well as in terms of business cycle synchronisation; and it also enjoyed a relatively high level of development (the price level and per capita GDP both stood at around 70% of the euro area average). Furthermore, the large euro area countries had long been among Malta’s most important trading partners and sources of foreign direct investment. As for the Maastricht criteria, the only serious doubts centered on the fiscal criteria. As noted previously, exchange rate stability was never an issue and the strong presence of the euro in Malta’s currency basket had also fostered convergence in interest rates. In fact, the interest rate criterion had been met long before EU accession. Fulfilling the inflation criterion was not considered an obstacle either, as the inflation rate had been generally below the EU reference value, and the upward risks were largely related to the impact of the VAT increase planned for January 2004. Although inflation continued to exceed the EU limit for most of the period from the second half of 2004 until the autumn of 2006, this mainly reflected the introduction of measures aimed at aligning energy and fuel prices more closely with market rates at a time of spiralling oil prices. Malta is totally dependent on oil, not only for electricity generation but also for water production.

The benefits of the euro for individuals and businesses, its contribution to a more effective participation of Maltese enterprises in the Single Market and the possibility of using the euro as a means of competing on international markets were also important considerations. But while there were many compelling reasons for an early adoption of the euro, there was also an understanding of the need to avoid the economic costs of a premature entry. Consequently, there was some hesitation in adopting an ambitious reform programme. These concerns were well-founded. At the time Malta was preparing to join the EU, the economy was emerging from a period of stagnation, a widening output gap and a slow pace of productivity growth. In addition, while the Government planned to reduce the budget deficit from almost 10% of GDP in 2003 to below 3% by 2006, an adjustment of that magnitude clearly presented considerable political risks, not least because some fiscal tightening was already underway. The unemployment rate, meanwhile, was edging upwards in response to the ongoing restructuring process and the further liberalisation of markets as a result of EU accession, making any further retrenchment painful for most households. 1  For a fuller treatment of Malta’s case for adopting the euro, see Malta’s Strategy for Participating in Economic and Monetary Union and Adopting the Euro, Government of Malta, Central Bank of Malta, April 2005. BIS Review 77/2007  1  At the same time, many indicators suggested that Malta was well suited to participate in the EU single currency area.
Decomposing the contribution of the financial sector – the productivity “miracle”  To that end, an alternative way of looking at the contribution of the financial sector is through inputs to the production process. This might shed more light on the sources of the rapid growth in finance. Was this expansion accompanied by a rising share of resources employed by finance relative to the rest of the economy? Or did it instead reflect unusually high returns to these factors of production? This section considers these questions in turn. (a)  Growth accounting decomposition  The basic growth accounting framework breaks down the sources of economic growth into the contributions from increases in the inputs to production, capital and labour. This amounts to relating growth in GDP to growth in labour input and in various capital services (from buildings, vehicles, computers and other resources). When these factors have all been accounted for, the remainder is often attributed to technical change – the so-called Solow residual (Solow (1957)). The growth accounting framework assumes an underlying aggregate production function. In its most basic form, the aggregate production function can be written as:  6  BIS Review 95/2010  where Q is output, K and L represent capital and labour units and t appears in f to allow for technical change.

Goodhart, C (2010), “How should we regulate the financial sector?”, Future of Finance and the Theory That Underpins It. Haldane, A G (2009), Small Lessons from a Big Crisis, available at http://www.bankofengland.co.uk/publications/speeches/2009/speech397.pdf Haldane, A G (2010), The $ Billion Question, available at http://www.bankofengland.co.uk/publications/speeches/2010/speech433.pdf Kay, J (2009), Narrow Banking: The Reform of Banking Regulation, Centre for the Study of Financial Innovation. Large, A (2010), Systemic Policy and Financial Stability: A Framework for Delivery, Centre for the Study of Financial Innovation. Mink, R (2008), An Enhanced Methodology of Compiling Financial Intermediation Services Indirectly Measured (FISIM), paper presented at OECD Working Party on National Accounts, Paris, 14–16 October 2008, available at $ Mitchell, B R (1988), British Historical Statistics, Cambridge University Press. BIS Review 95/2010  15  Office of Fair Trading (2008), Personal Current Accounts in the UK – An OFT Market Study, available at http://www.oft.gov.uk/shared_oft/reports/financial_products/OFT1005.pdf O’Mahony, M and Marcel P T (2009), “Output, Input and Productivity Measures at the Industry Level: the EU KLEMS Database”, Economic Journal 119(538), pp. 374–403. Oulton, N and Srinivasan, S (2005), “Productivity growth in UK industries, 1970–2000: structural change and the role of ICT”, Bank of England Working Paper Series No. 259. Philippon, T (2008), “The Evolution of the US Financial Industry from 1860 to 2007: Theory and Evidence”, available at http://pages.stern.nyu.edu/~tphilipp/papers/finsize.pdf. Philippon, T and Reshef, A (2009), “Wages and Human Capital in the U.S. Financial Industry: 1909–2006”, NBER Working Paper Series No. 14644.
The output gap is the IMF’s estimate from the October 2016 WEO at an annual frequency, interpolated to create a quarterly series. 12  Exchange rate shocks also have demand effects including via net trade. For example, a higher exchange rate lowers imported price pressures, reducing inflation directly. It also makes domestic goods less attractive on world markets, lowering the contribution of net trade to demand, which has second-round effects on inflation via the reduced demand of exporters for labour. At the same time, real household income rises with a higher exchange rate, providing some countervailing support to demand and domestically-generated inflation. 7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  7  In contrast, the US and the euro area have seldom faced a trade-off between output and inflation stabilisation, even since the global financial crisis (Charts 3 and 4). A simple way to represent more formally how the policymaker optimises the trade-off is in “linear-quadratic” form – a set of linear constraints describing the behaviour of the economy, and quadratic preferences that penalise deviations of inflation from its target and output from its potential. The relative weight the policymaker places on output stabilisation, relative to inflation stabilisation, is often denoted 𝜆 – or ‘lambda’.

Chile)  2.4 0.9 -0.1 7.3 7.3 4.0 1.0  2.5 1.5 1.0 6.9 7.5 4.2 0.2  2.4 1.5 1.0 6.7 7.5 3.7 -0.1  2.4 1.5 0.6 6.9 7.5 3.4 -0.6  2.9 2.0 1.4 6.5 7.8 4.5 1.8  2.8 1.9 1.4 6.4 7.8 4.0 1.0  2.6 1.7 1.2 6.4 7.8 3.7 0.4  2.8 1.9 0.5 6.1 7.5 4.2 1.4  2.8 1.8 0.5 6.1 7.5 4.0 1.5  LME copper price $ Oil price (Brent y WTI avg) $  311 96  280 60  255 52  (levels) 249 51  290 67  245 53  220 44  250 58  230 50  Terms of trade  -1.4  1.3  -3.0  -1.0  -3.8  -0.4  1.7  (annual change, percent) -4.2  -0.2  (f) Forecast. Sources: Central Bank of Chile, based on a sample of investment banks, Bloomberg, Consensus Forecasts, the IMF and statistics bureaus of respective countries.
The plan from the beginning of the autumn also meant that consideration would be given to selling securities before maturity, once the policy rate had reached 1 per cent, which it did in connection with the most recent monetary policy announcement on 5 May. At that time it was also announced that the bank was planning to follow the previously presented plan and start considering selling securities.18 The Bank of Canada began QT in connection with the most recent monetary policy decision on 13 April, when it also raised the policy rate by 0.5 percentage points. The reinvestment phase began in November last year and the policy rate was also raised in March this year. 19 This brings me to our latest monetary policy decision in April and how it fits into this discussion. Our plan In our decision in April, we judged that the repo rate and the repo-rate path are the most effective tools for dealing with the high inflation (see Figures 7 and 8). The repo rate was raised much earlier than we were expecting in February, while the repo-rate path was substantially revised up. As far as assets are concerned, we also want to adjust our holdings down, but to a less dramatic extent. Our plan  15 An article in the Monetary Policy Report last September gives an overview of the international discussion as it  was at the time; see Sveriges Riksbank (2021).

Jean-Claude Trichet: Global capital – surrender of national policies? Lessons from the recent events in credit markets Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the 17th Frankfurt European Banking Congress “Global Capital – Threat or Salvation?”, Frankfurt am Main, 23 November 2007. *  *  *  Ladies and Gentlemen, Let me start off with one general remark: The present significant market correction with episodes of turbulences should not come as a surprise to us. The ECB, as well as the other central banks, has issued warnings in the past on the global phenomenon of under-pricing of risks. In many respects the present episode can be interpreted as bringing to the forefront anomalies and structural deficiencies which we have identified earlier. While it is too early to make a full assessment, I believe there are some first provisional lessons which can already be drawn at the current stage. A lesson that can be drawn is that the growing complexity of instruments has to be monitored very closely. Structured credit markets are exposed to valuation problems, which make the market very vulnerable to a shift in investor sentiment. In the absence of reliable market prices, instruments need to be valued by models. But estimates which the models produce are highly sensitive to underlying assumptions.
Exchange rate developments after the introduction of the euro  6  BIS Review 90/2001  Before the introduction of the euro on 1 January 1999, it was assumed that the establishment of a large currency area in Europe could result in more substantial exchange rate fluctuations than earlier. Foreign trade for EMU as a whole accounts for a smaller portion of the economy than for Germany, for example. The focus on exchange rate changes could thus be expected to fade. The Norwegian krone would also be affected by such increased fluctuations. For Norway and other countries on the rim of the euro area, exchange rate fluctuations have not increased since the introduction of the euro. To the contrary, the effective exchange rates for pound sterling, the Swiss franc, the Swedish krona and the Norwegian krone have varied somewhat less than in the period 1996-1999. These currencies have also fluctuated somewhat less against the euro than they did against the German mark the last few years before 1999. Market participants also seem to assess the risk of future short-term fluctuations in the krone exchange rate against the euro as fairly moderate. This uncertainty, which is indicated by the costs of hedging against future exchange rate fluctuations in the short term, is now relatively limited for the Norwegian krone compared with other currencies on the rim of the euro area. BIS Review 90/2001  7  Changes in the terms of trade are an important source of exchange rate fluctuations.

If asymmetric shocks across euro area countries occur, the national authorities can use fiscal policy to stabilise economic developments. While adhering to the Stability and Growth Pact, fiscal policy could become more effective in the small and medium-sized economies since the exchange rate and interest rates will not in principle be affected. In addition, local wage determination and investment flows will over time contribute to reducing differences in profitability and production costs. The responsibility for fiscal policy rests with the national government of each euro area country. Fiscal policy can be adapted to the economic situation, provided the provisions of the Stability and Growth Pact are adhered to. Under the Pact, Member States are committed to pursuing the medium-term objective of budgetary positions close to balance or in surplus. Fiscal policy can be used to deal with cyclical fluctuations, but the budget deficit must not exceed 3 per cent of GDP unless it is deemed to result from an unusual event or severe economic downturn. In Norway, fiscal policy also has a long-term anchor, and monetary policy is oriented towards low and stable inflation. The guidelines for the use of petroleum revenues set limits on the structural budget deficit. Like the Stability and Growth Pact in the EU, these guidelines will contribute to economic stability. 1  GDP calculated in a common currency based on purchasing power parity. BIS Review 90/2001  3  The economic situation and the monetary policy stance Growth forecasts for the global economy have been revised downwards markedly in recent months.
5  Chart 3a: Superficially strong evidence of a global inflation cycle  Notes: Correlations calculated using quarterly data on annual inflation rates. Sources: Thomson Reuters Datastream, National Sources and Bank calculations. Some perspective is required. Wage puzzles in advanced economies can be partly solved by recognising that post-crisis structural reforms have lowered natural rates of unemployment, by broadening measures of labour market slack to include involuntary underemployment, and by acknowledging that weak wages are one consequence of sustained poor productivity growth. 6  More broadly, the recent high correlations of headline inflation rates have been driven by very large global shocks including the financial crisis and the commodity super cycle. Core inflation rates have actually exhibited little co-movement but rather have varied with (divergent) underlying economic conditions (Chart 3b). 785-823. Consistent with this, analysis by Bank staff found that UK businesses with weaker balance sheets increased their margins by more at the height of the crisis than those with healthier balance sheets. 4 For example, as documented by the Bank for International Settlements (BIS) in their 87th Annual Report, 2017. See also Draghi, M (2017), ‘Accompanying the economic recovery’, introductory speech at the ECB Forum on Central Banking 2017 and Danninger, S (2016) ‘What’s up with U.S. wage growth and job mobility’, IMF Working Paper 16/122. 5 For example, as suggested by Claude Borio, ‘How much do we really know about inflation?’, Presentation on the BIS 87 th Annual Report, 25 June 2017.

So if a large share of a country’s imports is invoiced in a foreign currency, changes in its exchange rate will mostly show up in changes in the domestic currency price of imports – in other words, pass-through will be higher. For the UK, Gopinath finds that just under half of imports are invoiced in US dollars. 55 There is evidence of threshold effects in exchange rate pass-through. Pass-through of bilateral exchange rate movements that are larger than 5% is around four times larger than that of changes smaller than 5%. See Lewis, J (2016), ‘What can Big Data tell us about the pass-through of big exchange rate changes?’, Bank of England Staff Working Paper No. 579. 54  20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Turning finally to the policy implications, it is critical to recognise that Brexit represents a real shock about which monetary policy can do little. Monetary policy cannot prevent the weaker real incomes likely to accompany the move to new trading arrangements with the EU, but it can influence how this hit to incomes is distributed between job losses and price rises. And it can support UK households and businesses as they adjust to such profound change. On balance, the de-integration effects of Brexit can be expected to steepen the Phillips Curve and to be inflationary. At present, the main question concerns the extent to which this adjustment has been brought forward.