samchain/econo-pairs-v1 huggingface dataset:
The impacts of various shocks on inflation may differ according to time and period. As a consequence, the period required for inflation to converge to the target again will be announced after the occurrence of shocks and the determination of their sources, if there is a significant deviation from the target. Forecast horizon The forecasts presented in the Inflation Reports published throughout 2006, covered a period of one and a half years. From 2007 onwards, forecasts will refer to a two-years period. This change aims to help economic agents to predict the future better. Furthermore, forming a comparable forecast period with the results of the Expectations Survey will provide us with the opportunity to analyze and assess inflation forecasts more easily. 1 Inflation forecasts and interest rate path While producing inflation forecasts, one of the most critical questions to be answered is how the monetary policy is shaped over the forecast horizon. Country experiences reveal that there are many different approaches related to the presentation of forecasts and the method of signaling future monetary policy. Accordingly, central banks can be classified into three groups: (i)  Countries in which central banks produce inflation forecasts by considering their own potential policy responses: New Zealand, Norway, Canada, Sweden, Czech Republic, Turkey, Columbia, Peru, Rumania. In addition, these countries announce their forecasts on the interest rate path in verbal or numerical terms. (ii)  Countries where central banks employ the market expectations: European Union (European Central Bank), Chile, Brazil, Czech Republic, Sweden, and England.

(ii)  On 13 June 2006 and 23 June 2006, the Central Bank decided to directly intervene in the market by selling foreign currency in order to prevent the excessive volatility observed in line with the liquidity shortage in the foreign currency market due to global liquidity conditions. Total amounts sold were USD 0.5 billion and USD 0.8 billion, respectively. (iii)  In the Monetary Policy Committee meeting held on the 25th of June 2006 following the aforementioned interventions, it was stated that the liquidity shortage in the foreign currency market continued and once again underlined that an effective foreign currency market was a prerequisite for the price stability target. Thus, in order to provide foreign currency supply via its instruments and mechanisms, the Central Bank directly intervened in the market by selling an amount of USD 0.9 billion foreign currency on the 26th of June 2006. In addition to this intervention, two more FX selling auctions were held on the 26th and 27th of June 2006, in which a total amount of USD 1 billion foreign currency was sold. Following the measures taken by the Central Bank against the volatility in financial markets in May and June 2006 and improved global liquidity conditions, the foreign exchange market has become relatively stable. For this reason, the Central Bank has decided to resume the foreign exchange buying auctions, which were suspended on the 16th of May 2006, as of the 10th of November 2006.
I would like to outline these shifts in the global economic landscape, and then elaborate on the implications for the IMS and monetary policy coordination. Three structural shifts in the global economy Globalisation, home bias and regionalisation Clearly, the defining feature of the last three decades has been the dramatic strengthening of globalisation in both trade and finance. Cross-border trade in goods and services as well as investment has soared, driven by trade-liberalising policies, the lifting of capital controls as well as innovations in transport and information technologies. The global financial crisis has led to a halt in this trend, perhaps only temporarily. But there is also the possibility of a step backwards, i.e. a re-emergence of financial home bias and a stronger drive towards regionalisation. Early evidence of this is the resurgence of the so-called “Feldstein-Horioka puzzle”, that is, a sharp rise in the correlation between savings and investments.1 European banks have retreated from dollar-denominated lending.2 Banks from emerging economies also have a stronger regional orientation, in particular in SouthEast Asia, Central America and the Commonwealth of Independent States.3 Regulators have been tempted to ring-fence their domestic financial systems. Restrictions on intra-European  1  For euro area countries the cross-country correlation between the savings and investment-to-GDP ratios fell continuously from 0.6 in the early 1990s to essentially zero in 2005; similarly, for non-euro area OECD countries it even fell from almost one to zero over the same time span.

A greater degree of cooperation is required from governments in the area of reforms and budgetary policies, to encourage growth and reinforce the monetary stimulus. Conclusions I shall now conclude. Central banks have played a fundamental role in the economic policies launched to combat the crisis, especially in the most developed economies, namely the United States, the European Union, Japan and the United Kingdom. This response has been based on very loose monetary policies, which have led to growth in central bank balance sheets to unprecedented volumes and, although at different tempos, has helped to contain and reverse the negative demand and employment dynamics. In the context of the European Union, the role of the ECB has, of course, been extremely important, and the attention aroused by its measures, initiatives and announcements is therefore entirely understandable. 6/7  I said at the start that central banks are offspring of the Enlightenment. As heirs to this tradition we should all aspire to ensure that pursuit of the common good and reason continue to be the main driving forces guiding these institutions. Thank you very much for your attention, and my congratulations to all this year’s CUNEF graduates  7/7
Financials have reverted to being close to a break-even strategy. That is broadly what long-run growth theory would lead us to expect. So what lessons should we take from this? Many practitioners and policymakers were seduced by the excess returns to finance during that twenty-year golden era. Banks appeared to have discovered a money machine, albeit one whose workings were sometimes  BIS Review 85/2009  1  impossible to understand. One of the South Sea stocks was memorably “a company for carrying out an undertaking of great advantage, but nobody to know what it is”. 1 Banking became the 21st century equivalent. We should aspire to a financial system where there is greater market and regulatory scrutiny of future such money machines. In achieving this, there is a role for some body – a systemic overseer – which is able to detect incipient bubbles and fads and, as importantly, act to correct them. This role is about removing the punchbowl from future financial sector parties. Lesson 2: Unless the golden goose is geared At one level, the crisis tells us that banks may not be special after all, at least in terms of their long-run profitability. There is, however, one dimension along which banks are a different animal: leverage. To see this, consider a simple decomposition of return on equity (ROE) for a firm: (1)  ROE = Return on Assets * Leverage  The first term is a measure of management skill in extracting profits from a pool of assets.

BIS Review 85/2009  7  Chart 3: Return on assets and leverage for global banks, end-2007  Pre tax profit/Total assets 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 0  10  20  30  -1.0%  40  50  60  Total assets/Tier 1 capital  Source: Bankscope  Chart 4: Tier 1 Leverage ratio and Total assets for global banks, end-2007  Tier 1 Ratio (%) 8 7 6 5 4 3 2 1 0 0.0  0.3  0.6  0.9  1.2  1.5  1.8  Total Assets £  Source: Bankscope  8  BIS Review 85/2009  Chart 5: Capital injections and balance sheet size, end-2007  Capital injections $ billions) 60 50 40 30 20 10 -  0.5  1.0  1.5  2.0 2.5 3.0 Total assets $ trillions)  Source: Bank of England  Chart 6: Probability Densities of UK GDP Growth  Density 1857-2007 1998-2007  -15  -10  -5  0 5 10 Annual GDP Growth (%)  15  Sources: Office for National Statistics and Bank calculations.
It will also affect industries like construction, which rely on outdoor work. Lower income countries are particularly vulnerable to global warming, while coastal states are vulnerable to rising sea levels. These shocks to output cannot but have significant implications for prices. Climate change will impact how the economy operates and will exert a substantial influence on price dynamics. Indeed, given the Eurosystem’s primary objective is price stability, it is important for monetary policy makers to be aware of these effects as they set the policy stance. Monetary policy is going to be affected by climate change, as well by the measures taken by governments to address it. First, climate change will affect the structural parameters of the economy. One key parameter is the natural rate of interest. The natural rate of interest is fundamental notion of central banking. When interest rates lie below the natural rate, monetary policy is accommodative, and vice-versa. In turn, the monetary policy stance has an impact on the price level. There is uncertainty over the direction of the impact of climate change on the natural rate- our r star: climate factors could contribute to the secular decline of natural rates in line with prevailing structural trends such as demography. Conversely, higher investment to combat emissions could lead to a rise in productivity which may push up r-star. 3  Second, climate change will alter the transmission mechanism of monetary policy. The value of assets posted as collateral by financial intermediaries could decline due to the higher frequency of extreme weather events.

While the responsibility to engineer a coordinated response rests primarily on national governments and international organisations, everyone has a stake in this process. The Central Bank of Malta, and the Eurosystem more broadly, intends to contribute to net zero emissions by adjusting its policy framework in favour of low emitters, by enhancing the resilience of the banking system and by incorporating climate change into its macroeconomic models to ensure that the monetary policy stance takes climate into account and that monetary policy measures are transmitted smoothly to the real economy. These efforts will safeguard the public good of stable prices while fostering the transition to the public good of a clean environment. Private actors too have a role to play. The more funds are channelled towards environmentally sustainable projects, the quicker the transition to net zero and the less resources will have to be deployed to adapt to climate change. In the Maltese capital market, green  finance has a vast untapped potential. It is thus reasonable to expect that in the coming years green finance will carry a growing weight over traditional instruments thanks to increasing awareness of the public interest inherent in its expansion and to the support of policymakers and legislators alike. Thank you very much for your attention. Prof. Edward Scicluna, Governor of the Central Bank of Malta 11.11.2022 9
Such caution holds back spending below the levels of our productive capacity. For example, I regularly hear from business contacts that they do not want to risk hiring new workers until they actually see an uptick in demand for their products. Most businesses do not appear to be cutting back further at the moment, but they would rather sit on cash than take the risk of further expansion. 1  Real GDP fell about 5 percent during the recession, and growth has averaged about a 2-1/2 percent annual rate so far in the recovery. (The number in the text was based on the difference between actual and potential real GDP as calculated by the Congressional Budget Office through 2011:Q2.) BIS central bankers’ speeches  1  Considering the substantial lost wealth that came with the Second Great Contraction and the enormous uncertainty over the recovery today, it is understandable why households, businesses and market participants are exceedingly cautious. We seem to be following the tendency, documented by Carmen Reinhart and Kenneth Rogoff, that recoveries from economic downturns caused by large financial crises usually are painfully slow. Accordingly, it is of the utmost importance for monetary policymakers to respond appropriately. Recently, many critics of the Fed’s actions have raised concerns about the credibility of Fed policy. Credibility – that is, the general belief that the Fed does what it can to achieve its mandated policy objectives – is certainly a critical issue. Defining “credibility” sounds easy, but there are several aspects to credibility.

Jean-Pierre Roth: Central bank policy and developments on the real estate market Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the 8th International Symposium of the Group of Fifteen, Zurich, 1 February 2007. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss National Bank takes considerable interest in the real estate market for a number of different reasons. Movements in real estate prices, on which it focuses in particular, can have a bearing on private consumption, investments and bank lending in addition to directly influencing the consumer price index through the rent component. The SNB’s monetary policy is aimed at maintaining price stability, as measured by changes in consumer prices. Therefore, if it had reason to expect that developments in the real estate market could jeopardise price stability in the economy as a whole, the SNB would definitely adjust its monetary policy. The Swiss real estate market has shown a very positive performance over the last few years and has made a substantial contribution to the upturn of the economy. According to the National Bank's assessment, the housing market in particular is currently well-balanced. The present situation thus gives no cause for concern. The SNB will, however, continue to monitor developments closely, particularly those factors that might boost demand for residential space in the future.
At the risk of oversimplifying these challenges, let me group them into three categories: (i) challenges to macroeconomic management, (ii) structural challenges, and (iii) cyclical challenges. The first two depend essentially on us, while the third refers to the short-term trajectory of the Chinese economy and its possible impact on developing countries. Macroeconomic challenges A first issue worth noting is that commodity prices have experienced successive cycles throughout history, and there is a permanent risk of mistaking a temporary phenomenon for a permanent one. This time is no different. There is a valid argument that the Chinese economy can sustain its recent dynamism for many years to come. While there are reasons to believe that the Chinese economy should converge to growth rates around 7% within the next few years, and that 9% growth rates are very difficult to sustain, this does not imply a substantial deterioration in Chinese demand for commodities. 3 In the case of Chile, the experts surveyed by the Ministry of Finance have raised their estimates for the long-term copper price on repeated occasions on the grounds of both supply- and demand-side considerations. 4 However, economic cycles do exist and the response of supply – which has not been fully perceived so far – will tend to drive prices to their trend values, which are below current levels. Clarity on this point is not only fundamental to determine a fiscal policy consistent with medium-term income, but also to guide private spending and investment decisions on the basis of sustainable future earnings.

What is more, the Swiss franc has only seen a moderate rise against the euro. As Swiss households and companies are on a solid financial footing, they are shielded – so to speak – against a tightening in credit conditions. Lastly, the stronger Swiss franc vis-à-vis the US dollar has limited the impact of higher commodity prices. Several other factors, like a robust labour market and a competitive industrial sector, could cushion the negative repercussions of the financial crisis in Switzerland. Against this backdrop, the SNB is expecting real GDP to grow between 1.5% and 2% this year. Inflation should be below the 2% mark again in the course of 2008. These forecasts still involve substantial uncertainties. Given the present state of the economy, the current interest level seems to be appropriate. However, the SNB will keep a close eye on further economic developments and inflation so that it is able to identify when action needs to be taken and react in a quick and flexible manner. BIS Review 51/2008  1
This is how it was before the Executive Board was established. Furthermore, as I have already remarked, there should be a monetary policy committee, with or without external members, that takes monetary policy decisions. In addition, if the Riksbank and Finansinspektionen are merged, there should also be a similar committee or board to take decisions of the type currently taken by Finansinspektionen, with the exception of decisions dealing with macrofinancial stability, which should be taken by the monetary policy committee.11 This would give us an arrangement similar to the model presently being launched by the Bank of England.12 Finland also has a similar model, with the financial supervisory authority as a part of the Bank of Finland, but with its own board and head. The Riksbank should have a sufficient foreign currency reserve One issue that we in the Executive Board have not agreed upon is the issue of the size of the foreign currency reserve. Previously, under the present foreign exchange policy with a floating exchange rate, the foreign currency reserve has primarily been intended to support  11  In addition, there should be a financial stability council for inter-agency cooperation and the exchange of information. As an alternative for strengthening macrofinancial stability, the Swedish Fiscal Policy Council has proposed such a council, and, in its recently concluded mission to Sweden, the IMF advocated a committee of this kind.

Back in 2001 the Governing Council of the ECB, on the basis of a proposal coming from Tommaso Padoa-Schioppa, issued a short paper lining up the arguments for having supervision in a central bank. And if you read that paper, you will see that the set of arguments is heavily tilted towards favouring giving supervision to central banks. So it’s a long-standing position.1 There are many advantages, including one that is not mentioned in the paper: supervision is not just about micro-supervision these days; it now has a macro-financial perspective, for which central banks are much better prepared than any other institution to handle. Central banks monitor developments in all segments of the financial system. From reading your most recent speech, I had the impression that you thought austerity went much too far and the effects have been too drastic. Is that right? 3/8  BIS central bankers' speeches  Yes. And the main example of that is of course the case of Greece. No institution, not the Commission, not the ECB, not the IMF, ever thought possible – let alone planned for – a 25% drop in GDP in Greece. The first and second programmes for Greece were designed with a much more optimistic view on the cost of the adjustment. So the adjustment programme was indeed too harsh. And also perhaps too mechanical, because what the programme didn’t foresee was the total collapse of hope and expectations. Then, at the same time, all countries in the euro area were reducing deficits, consolidating.
Indian leaders and businessmen wanted to convince me of India's technical expertise, management skills and huge market. They wanted Singapore investments. The late Narasimha Rao, who was then Prime Minister, had just begun to reform India's economy, working closely with his then Finance Minister, Manmohan Singh. I encouraged them. I told the Indian leaders and businessmen that protectionism was the wrong development strategy: 900 million people should not produce for only 900 million people. They would be better off producing for the whole world. 18. Many observers had doubted whether India could shake off decades of central planning. Indeed, in its reform path, India had often taken two steps forward and one step back, sometimes in a zigzag. But I knew that India, like a big elephant with constant change of mahouts, would take time to turn around. 19. Since then, India's economic reforms have been creating a buzz. The mindset change of politicians and business leaders in this new India is palpable. 20. Today, India is attracting attention from foreign media and investors. Japan has traditionally not shown much interest in India. But this may change. I am told that Japanese companies have started to  2  BIS Review 83/2005  explore the new India. Recently, when Nomura Securities launched its India Stock fund in Singapore, $ was raised in a week. I urge Japanese companies to quicken the pace of this exploration. 21. India is changing, albeit not as quickly as China. There are many serious challenges.

Reinventing ourselves to stay relevant is in our DNA. In the 1960s and 70s, when it was fashionable to be anti-MNC, Singapore welcomed MNCs. Over the past 40 years, we have grown in partnership with MNCs in manufacturing. This strategy will continue. The manufacturing sector will remain a key driver of our economy. 42. But we have started to build a second platform to drive an innovation- and knowledge-based economy. New areas of focus include Research and Development, biomedical sciences and the creative industry. We have also undertaken extensive measures aimed at strategically positioning Singapore as a leading international financial centre. 4  BIS Review 83/2005  43. Singapore is also prepared to break old moulds and be flexible and practical in a changing world. For instance, we overturned our longstanding policy of disallowing casino gambling. To remake itself into a city with buzz, Singapore is developing Integrated Resorts, with casinos, convention facilities and world-class entertainment. Japan-Singapore partnership for the future 44. I see great potential in closer collaboration between Singapore and Japan. The landmark JapanSingapore Economic Agreement for a New Age Partnership (JSEPA) provides an excellent framework. Japanese companies can use Singapore as a hub with radiating spokes to tap global opportunities. From Singapore, companies can service a combined population of 3 billion. That is why 7,000 MNCs choose to hub in Singapore. Of these, 4,000 manage global and regional responsibilities. Recognising this strategic value-add, many Japanese companies have further expanded their operations in Singapore. 45.