samchain/econo-pairs-v1 huggingface dataset:
And the global population scarcely budged, held in check by unchanged food supplies, as th  7  predicted by Thomas Malthus in the late 18 century. Not for nothing was this called the Malthusian era. Another example of this secular stagnation, a favourite of mine, is provided by plotting heights from excavated skeletons records. These are a diagnostic on levels of health and nutrition. Male skeleton heights were essentially unchanged, at 160-170cm, for at least 2,000 years prior to 1750. Humans grew neither physiologically nor financially. And neither, then, did the societies in which they lived. That makes the contrast with developments in the last quarter of the millennium all the more striking. From around 1750, GDP per head suddenly took off and has kept on rising ever since, growing by around 1.5% per year. The magic of compound interest means these growth rates have transformed people’s living standards. The time it takes for living standards to double has shrunk to less than 50 years. The impact on people’s well-being, financial and psychological, has been transformational. It has meant each generation has been around 50% better off than its predecessor. After 1750, generational progress suddenly became visible, children to parents to grandparents. Growth in living standards became a social norm, in a way never previously true in human history. Life’s travellator turned into an escalator. And not just for GDP. Broader metrics of well-being tell a similar tale.

Even disastrously, the under-employment in agriculture in Sri Lanka is not only the highest but also on the increase. According to the Consumer Finances and Socio-economic Survey of the Central Bank, the underemployment in the agriculture sector in 1996/97 stood at 31 per cent of the employed and it rose to 36 per cent by 2003/04. In contrast, the underemployment in the services  2  BIS Review 116/2008  sector fell from 20 per cent to 18 per cent between the two reference periods and that in the industry remained unchanged at 20 per cent. This has to be seen as both a weakness and an opportunity. We know that food prices have recorded an unprecedented increase in recent times. Hence, there are immense opportunities arising from increased prices and resultant increase in production. At the same time, food security has to be ensured in order to avoid adverse consequences of increased food prices and also undue declines in stocks. Given these limitations, the obvious strategy is to increase productivity. Accordingly, attempts need to be made to concentrate on land, water, agricultural methods, seeds, harvesting, credit to agriculture, transport, harvesting storage, stable prices, value addition etc. to raise productivity in agriculture. If the growth is constrained by limited expansion in agriculture, can’t we focus more on the industry sector? Of course, we can. Unlike the agriculture, which is constrained with limited land availability, industry does not have capacity or demand limitations.
The Great Financial Crisis is a good example: at that time, solid and well-anchored inflation expectations in the euro area contributed to counteract the strong deflationary forces affecting our economies. However, since then, market-based measures of inflation expectations in the euro area have been decreasing and this decline has been even more pronounced since the beginning of 2019. This fall in market expectations has raised some questions among central bank watchers on potential risks of deanchoring of inflation expectations and more generally on our ability to deliver our mandate of price stability. I.2. The need for better information on households expectations  Let me stress that market-based inflation expectations are not the only available measures to assess future risks of inflation. Professional forecasters or consensus forecast provide a significantly higher figure than the 5Y/5Y ILS, at around 1,7% rather than 1,2% to 1,3%, although all of them point out to a decrease of inflation expectations over time (Figure 1). Market-based measures have also some technical limitations: first, related to the liquidity of 2  financial markets, and second because they are affected by the evolution of the risk premium over time. Moreover, while financial market expectations provide information on future financing conditions, the evolution of prices and wages depends more deeply and directly on what household and firms expect regarding future growth and inflation. Consequently, existing surveys among firms and households can provide very useful and valuable information on expectations.

Left unchanged—without our tiering system—it would have severely impaired the bank channel in the transmission of our monetary policy. The return of policy rates to positive territory would this time provide a sizeable risk free income to the banking system, and a similar loss for the Eurosystem. The possible losses for central banks and the Eurosystem may draw public attention, but the primary objective of monetary policy is price stability, not central bank profitability; and the more relevant issue  Page 8 sur 8 in this regard, rather than our profit and loss statement, is the financial solidity of central banks’ balance sheets through their levels of capitalized reserves. The effect on banks’ net interest income nevertheless, if opposite in sign to the one under negative rates, could also distort the transmission of our monetary policy. Just as we did with the tiering scheme, we have to think about a reserve remuneration system adapted to this new context, as the ECB announced it in our July decisions. We will conduct this assessment in a swift and pragmatic way, looking at various options having existed across history and across jurisdictions. ** The high uncertainty in which we must at present navigate the normalization of monetary policy means that we will have to artfully deal with the unexpected. Perhaps however, accepting this uncertainty is, if not what science is typically associated with, at least what rationality commands. Voltaire said, “uncertainty is not a pleasant condition, but certainty is absurd”.
To the extent that this may be the case, then a clearer picture on liquidity conditions may only emerge as monetary policy is normalized. What factors could influence liquidity provision? Clearly many factors could affect liquidity provision. On the regulatory side, capital and liquidity requirements are probably the most important factors. Dealers have been an important provider of liquidity. Higher capital requirements reduce dealers’ returns on equity for a given level of intermediation activity and margin. At the same time, liquidity requirements increase the cost of holding less liquid assets. To compensate for the higher capital and liquidity requirements, dealers can shrink their activity in lower margin businesses and raise the price for the liquidity services they provide. Presumably, both adjustments occur in most markets with the ease of entry, the degree of economies of scale, business model and overall client profitability influencing whether the adjustment occurs more through a resizing of the activity or a change in unit trading margins. For the U.S Treasury market, the most important change in regulatory requirements is probably the introduction of the supplementary leverage ratio (SLR) in the United States. The SLR limits how leveraged a dealer balance sheet can be. Because in the SLR all assets require regulatory capital, the SLR is much tougher on low risk assets compared to the riskbased capital measures it complements.

One response to the gaps revealed during the financial crisis was the adoption of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It ushered in significant changes and also required numerous studies to be undertaken, and new regulations to be considered and promulgated. Much of this work is still in process. Some of the most significant aspects of the Dodd-Frank legislation involve seeking greater clarity in the resolution procedures for complex financial holding companies that experience difficulties; creating a Financial Stability Oversight Council; establishing a Consumer Financial Protection Bureau intended to address gaps in consumer protection; and increasing regulatory powers over, and focus on, systemically important financial institutions. A second major change resulting from the financial crisis has been a reappraisal of the quantity and quality of capital needed to avoid a reoccurrence. This matter is clearly critical to the Basel III discussions taking place here over the next two days; but, I would note, has already been the focus of two supervisory exercises conducted in the United States. As I will describe in more detail in a moment, during a financial crisis investors focus on how much “core” or “pure” capital exists in an organization to absorb immediate and near-term losses.2 Some of the broader definitions of capital include elements that are not actually readily available to absorb losses.
BIS Review 28/1998  ˝  -5-  18. The latter point needs some further elaboration. As you will be aware, Hong Kong’s monetary policy is built around exchange rate stability in the form of the link between the Hong Kong dollar and the US dollar. This is backed up by the currency board system which requires the monetary base of the banking sector - the notes and coins in circulation and the clearing balances held with the HKMA - to be fully backed by foreign currency. When the Hong Kong dollar is under pressure as it was at the end of October 1997 and again in January of this year, the HKMA buys Hong Kong dollars from the banks in exchange for US dollars and the monetary base shrinks. This tightening of liquidity will in turn cause interest rates to rise, perhaps sharply so. This will choke off the inflows and restore stability to the exchange rate. 19. It is important to realize that this is an automatic process and that the HKMA has no room to maneuver to prevent the rise in interest rates from taking place. To do so would run counter to the basic principle of the currency board and would risk prolonging any attack on the Hong Kong dollar. 20. I think that there is now a better understanding of how the currency board system works. In addition, our determination to adhere to the system and to defend the linked exchange rate has been clearly demonstrated.

Yet we have been, somehow, controlling, or we claimed to have been controlling, the monetary base ever since the linked exchange rate system was established in October 1983. 16. Even assuming that the definition of the monetary base is well understood, there is then the important question of how it should be controlled. Herein lies one of the most interesting subjects in monetary management and that is the choice between discretionary control with people making decisions, and automatic rule-based control with no discretionary decisions involved. Associated with this are considerations concerning, and possibly another choice between, flexibility in management and the credibility of the monetary system. Even the most professionally competent central banker can be wrong. A system that involves discretionary decisions is therefore subject to human errors of judgement that may undermine the credibility of the system, and some would go as far as to argue that this would eventually lead to failure of the system. On the other hand, an entirely rule-based system without any discretion is inflexible and may not serve the best interest of the community, even though short-term interests may sometimes be involved - witness the many calls for lowering interest rates even when the exchange rate is under pressure. 17. Another related conceptual issue that needs to be put across clearly is that the classical currency board system, as structured in the old colonial era, whilst still theoretically sound, has long become impracticable in coping with the complexities of modern finance.
As I mentioned earlier, during 1999 and early this year a number of observers saw rising share prices as a strong reason why the Swedish economy might become overheated. At the Riksbank we were more inclined to wait and see. There is no reason now to adopt a different view and exaggerate the risks of the share price fall. Consumption is being sustained in the first place by a strong development of income that stems from increased employment, a good increase in real wages and a fiscal stance that is less restrictive than before. There is some cause for concern in the present round of wage negotiations. In a sense, that is inevitably the case when many settlements are being concluded simultaneously and the wage share is approximately two-thirds of the economy. That means that no other single factor is anything like as important as the wage trend for the path of the Swedish economy in the coming years. The picture of the negotiations that are now beginning is mixed. The outcome to date has been a positive surprise. It also looks as though the negotiating parties are formulating their bids on the basis of the inflation target. Moreover, the available picture of future wage expectations looks relatively good (Chart 3). Here we see the wage outcome, wage expectations and unfilled job vacancies. It is evidently becoming increasingly difficult to find the right people for the jobs that are advertised. This presumably makes the risk of wage drift greater than in previous years.

Moreover, the wage demands that have been presented are higher than before the previous round of negotiations. Wage outcome, wage expectations Nov-00 and unfilled job vacancies Per cent and thousands, respectively 8  45  7  40  6  35 30  5  25 4 20 3  15  2 1 0 1994  10 Wafe outcome (left scale) Faktisk lön (vänster skala) Arbetsmarknadens nov-00 (vänster skala) Wage expectations (leftförväntningar scale) Kvarstående lediga platser Unfilled vacancies (right scale) (höger skala)  5 0  1996  1998  2000  2002  Sources: Prospera Research AB and Statistics Sweden  5  BIS Review 107/2000  When it comes to judging future inflationary pressure, the degree of resource utilisation is the crucial concept, at least as long as inflation expectations are parked around the 2% target. The next chart is instructive here (Chart 4). As you know, we estimate total resource utilisation econometrically in terms of the output gap. If we take the October estimates as a starting point and project them with the accompanying GDP forecast, we find that for the first time in a number of years we look like having full or more than full resource utilisation in the years ahead. Perhaps the picture exaggerates the risk of future inflationary tensions. The cyclical position, for example, may be somewhat calmer than we counted on in October.
At the same time, concerns about the possible problems for the financial market apparently made the Bank of England decide to go no lower than 50 basis points and initially, in April 2009, prevented the Riksbank from going below 50 basis points, although the Riksbank later in July lowered the policy rate to 25 basis points. 5 How does the central bank know whether the constraint binds or not? I thought that it would know by continually monitoring the state of the financial sector. In some countries, the central bank publishes a regular Financial Stability Report of the type pioneered by the Bank of England and the Riksbank. These reports include an analysis of indicators of the state of the financial sector, in particular early-warning indicators of potential future problems. They serve to assure the general public and economic agents that everything is well in the financial sector when this is the case. They also serve as early warnings of the agents' concerns and for the financial-regulation authorities when problems show up on the horizon. Early action could then prevent any financial instability from materializing, thus limiting the probability of future threats to financial stability and future binding constraints on monetary policy.

One important lesson from the financial crisis is that financial factors may have a very strong and deteriorating effect on the transmission mechanism, making standard interest-rate policy much less effective. This motivates more research on how to incorporate financial factors in the standard models of the transmission mechanism used by central banks, and a rapidly increasing volume of such research is now being produced by academic and central-bank researchers and presented at an increasing number of conferences on financial factors and monetary policy. Important questions include how potential output and neutral real interest rates are affected by financial factors and financial distortions (Curdia and Woodford 2009, Walsh 2009), and what impact financial factors have on the general equilibrium effects of  6  BIS Review 112/2009  alternative policy-rate paths on inflation and resource utilization forecasts. 11 Before such extensions to the modelling framework are operational, policymakers and staff have to improvise and apply unusual amounts of judgment on the effects of the financial crisis on the transmission mechanism. Even with much better analytical foundations concerning the role of financial factors in the transmission mechanism, there will of course, as always, be considerable scope for the application of good judgment in monetary policy.
If the government in this kind of situation chooses to finance an increasing share of its expenditure by getting into debt (either via new bonds or central bank reserves), the result will be that inflation rises. The government's indebtedness is thus financed, at least partly, by a so-called inflation tax. This is a tax paid by all citizens in that money loses its value. The Riksbank is an independent central bank that makes independent decisions on government bond purchases with the aim of attaining the inflation target. The Riksbank shall thus act independently and the purchases may only be based on the Riksbank’s own assessment. In other words, the holdings may not mean that the state and the Riksbank enter into an interdependency. The purchases thus do not entail any monetary financing and do not lead to soaring inflation in that the Riksbank states that the purchases are made for monetary policy purposes. 53 Within the EU law there is for example restrictions regarding the scope of the government bond purchases. 22 [35]  Change end development – also within the Riksbank's field of operations In the economic cycle, all of the parts are connected. If there are changes in a part of the economy, this affects the other parts. Things such as technological developments, changes in demand, changed competitive conditions and new trade opportunities lead to the economic conditions constantly changing. In a larger perspective, the changes contribute to the resources being used where they do the most good and this promotes economic developments.

One question that many nevertheless ask in the light of today's relatively large balance sheets, is whether we should expect them to be large in the future. 44 There are many indications that this is the case. A short-term policy rate will always be an important monetary policy tool, but my assessment is that bond purchases will play a bigger role than before. As I said, the balance sheet is very large at present. This means that even if we wanted to reduce it rapidly, it would take a long time before it is back at the levels that applied prior to the global financial crisis 2008-2009. But there are also a number of economic reasons why the central banks’ balance sheets should be large going forward. 45  General low level of interest rates in Sweden and abroad If interest rates continue to be as low as now, the policy rate will hit the lower bound more often. Monetary policy will thus automatically become more dependent on other instruments to be able to affect interest rates and access to credit. Extensive asset purchases will thereby become a more important instrument, but other measures, such as forward guidance, and interventions on the foreign exchange market, could also become relevant. The Riksbank has already been using a form of forward guidance since 2007, in that we have published a policy rate path.
Table 5 Risk balance and sensitivity scenarios Sensitivity scenarios Downward biased external risks * Extension of trade war * Political - economic tensions * Abrupt deterioration of financial conditions  External  GDP  Inflation  MPR  Worsened external scenario  (-)  (-)  Stronger stimulus  Reduced productivity  (-)  (+)  Weaker stimulus  Increased labor participation  (+)  (-)  Stronger stimulus  Downward biased internal risks for activity * Worse than expected performance of investment, * Weaker mining industry  Unbiased inflationary risks * Unexpected effects of immigration * Impacts of a deterioration of the external scenario  Page 17 of 18

We now have 12 million internet bank accounts and over $ trillion worth of banking transactions are conducted on the internet each month. By and large, banks in Hong Kong are offering safe and efficient banking services to customers, both through the conventional branches and through digital or internet banking. However, in view of the explosive advancement in technology in the last few years, we believe that conditions now exist for banking in Hong Kong to rise to the next higher level. I would highlight a couple of technological developments that form the building blocks for the new era of Smart Banking:  (a)  First is the substantial increase in mobile bandwidth and data speed. Mobile data speed has grown over 50 times since 2010, allowing massive volume of data transmission from the handheld devices to take place at high speed and low cost that were unthinkable previously. (b)  Next comes the unprecedented growth in computing speed and storage capacity. This allows financial transactions to take place, be processed and stored in the digital form, again at very high speed and low cost. (c)  The third development is the breakthrough in customer authentication and telecom security. New authentication technologies such as fingerprint, voice, and facial recognition have significantly increased the robustness and reliability in remote digital banking using smartphones or handheld devices. (d)  And fourthly, there is the Open Application Programming Interface (API).