samchain/econo-pairs-v1 huggingface dataset:
The benefits the world economy has reaped from having pursued that path are now only too clear. Global integration and co-operation has boosted dramatically flows of goods, services, people and monies. Each is at levels never previously seen. This, in turn, has helped deliver higher living standards and lower levels of 1  poverty in pretty much every country on the planet. Finch would have wholeheartedly approved. Looking to the future, however, this wind is at risk of changing direction. The global financial crisis has left lasting scars. That has created pressure to place speedbumps, or in some cases roadblocks, on flows of goods, services, people and monies. One of the key policy challenges ahead will be to prevent the hard-won gains from global integration and co-operation being lost. The stakes could scarcely be higher. Tonight, I want to discuss a different policy challenge facing policymakers, specifically central banks. It too has risen in prominence since the global financial crisis. It too has posed big questions about the existing policy order. And it too needs, I believe, to be tackled transparently and comprehensively if stability and trust in the international monetary system is to be preserved. Just before the 2016 referendum on EU membership, Professor Anand Menon of King’s College London was explaining to an audience in Newcastle that, in the view of most economists, leaving the EU would be bad for their economic health. GDP was likely to fall.

Published assessments of policy impact can improve public understanding of, and debate about, often difficult distributional choices. 9  When it comes to monetary policy, the position until recently has been rather different. There has been no particular clamour for published assessments of the distributional impact of monetary policy. Why? Because monetary policy has benefitted from, not one, but two “Get Out of Jail” cards. Both have their origin in Milton Friedman’s 1968 Presidential Address to the American Economic Association, half a century ago. 10  The first follows from the neutrality of monetary policy with respect to real variables over the longer run. 11  Typically, this neutrality is associated with the total level of resources in the economy, such as employment or output – the vertical long-run Phillips curve. But neutrality applies, with no less force, to the distribution of resources in the economy, whether between sectors or regions. In theory, monetary policy ought also to be neutral in its longer-run impact on economic inequality. 9 10 11  For example, Ball et al (2013) and Büchs et al (2011). Friedman (1968). Patinkin (1987) traces the history of thought relating to the neutrality of money. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  The second Friedman point is that the monetary policy tools of the trade should be simple and singular – for example, the money supply or short-term interest rate. These instruments are levied at an economy-wide level.
3  European Union enlargement  At first glance, the link between this topic and the two issues I have been dealing with up to now appears quite tenuous. Yet, while the issues arising from market integration and financial stability are of concern for many Central Banks, managing the EU enlargement is a distinctive concern of the Eurosystem. I would like to share views on how the Eurosystem will act to address this concern, while performing their task regarding price and financial stability. Ten countries from Central, Eastern and Southern Europe –comprising 75 million inhabitants – are to join the EU, thus completing European reunification. Although their combined GDP is rather small (equivalent to that of the Netherlands for instance), in terms of population' size they will propel the EU (450 millions inhabitants) largely ahead of the combined population of both the US (population: 275 millions) and Russia (population: 145 millions). This testifies again, if need be, to the attractiveness of the European Union framework, which has provided us with economic prosperity and political stability for almost half a century. Accession countries have accomplished important progress in stabilizing and strengthening their economies and their institutions. Observing the accession countries, recent history shows the major improvements those countries have made, in hardly 10 years, on the road towards convergence with the EU. Let us keep in mind, the sometimes rather slow pace the current Member States took, regarding for example trade openness, price liberalisation, or macro economic discipline.

Lastly, most spending is temporary and non-recurring, which will make it hopefully possible, once the crisis is over, to return to a sound and sustainable fiscal path. II. Can reconstruction now strengthen Europe and the Franco-German alliance? After the emergency phase, the time has come to exit the crisis. We Europeans have common objectives here: to support growth during the recovery phase, but above all to invest for the future (climate change, digital, health, etc. ), in a world that is increasingly uncertain. To achieve this, Europe has four concrete and innovative levers at its disposal: an unprecedented recovery plan, a Financing Union for private savings, its single market, and its commitment to fight global warming. An unprecedented recovery plan The Franco-German initiative of 18 May, and the subsequent European agreement of 21 July, have been a major step forward for European financial solidarity. This is an unprecedented act of solidarity towards the countries most affected by a pandemic, which is itself unparalleled. For the first time, a common European-wide fund to finance final expenditure has been adopted, representing over half of the package (EUR 390 billion). This is not only a strong political signal, but also an economic rebalancing of the policy-mix in the euro area, which lays the groundwork for a real common fiscal policy. The ECB's Governing Council has long advocated that monetary policy should not be “the only game in town” in Europe. This is very good news.
Jointly with several countries in the region, we were positioned in the group of efficiency enhancers, meaning that reforms must be intensified to increase the growth efficiency and quality. Increasing the technological readiness was one of the identified priorities. Thus, in the last decade, the Macedonian productivity level has been staggering to around 40% of the level of advanced economies, such as German economy. This clearly points that if we want to grow at stronger pace and in a more sustainable, green and inclusive way, we need to continue intensively addressing the structural hurdles for the key long-term determinants of the growth: labour, capital and productivity. Let me focus on productivity. At this point, I think I can bring in the highlight of the latest Transition Report, i.e., innovation and digitalisation of the economies. The adoption of digital technologies can unleash productivity revival and possibly counteract some forces that act as drag on growth, such as adverse demographic and emigration trends that dampen the labour supply. What is the pace of digitalization of the Macedonian Economy? The new EBRD digitalization index points to a progress in both segments that are captured by the index – first, the preconditions for the use of digital technologies (digital infrastructure, skills, regulation, provision of government services), and second, the actual use of digital technologies by individuals and companies. The progress is particularly visible in the area of regulation and provision of government services, where score has more than doubled.

Luis de Guindos: Interview with El Mundo Interview with Mr Luis de Guindos, Vice-President of the European Central Bank, and El Mundo, conducted by Mr Pablo Rodríguez Suanzes on 25 November 2019 and published on 2 December 2019. * * *  How are you finding life in Frankfurt? Frankfurt is a nice city, I like it. The ECB is the most important institution in the framework of the EU, and of the euro area in particular. Exposure to the public is very different to when you’re in government. Here, the relationship is mainly with the European Parliament, through hearings, and with the public, through speeches. Is my life better? It’s different. How do you feel about not being able to speak as freely as before? I can keep speaking normally. I still attend the Economic and Financial Affairs Council (ECOFIN); each week, we have discussions in various forums on issues around monetary and economic policy and financial stability. So I have something to offer, but my contributions aren’t political. Do you miss it? I don’t miss anything. That was my job for six years. I’m not at all bored here. When and why did you decide you wanted to try to become the Vice-President of the ECB? I wanted to leave the government at the end of its first term. I spoke to President Rajoy and we said it could be a possibility, and it was very attractive to me. It’s the most important institution in the euro area, very prestigious.
A series of home-made disasters have also rocked the sector. The UBS “rogue trader”, the losses at JP Morgan’s Chief Investment Office, LIBOR manipulation at Barclays (with others under investigation) and the mis-selling of PPI. These scandals have not so far been institution-threatening, but coming on top of the financial and macroeconomic crisis to date, they have helped to suck confidence from the financial sector just when it might otherwise have been recovering. Chart 3 shows a “heat map” of markets generated by colleagues in the Financial Stability area of the Bank. This chart uses indicators such as issuance amounts and bid-ask spreads to monitor market conditions. Red indicates a non-functioning market. The process of “healing” since 2008/09 that I referred to a year ago is clear. But then the improvement plateaus and starts to reverse in mid-2011. A year ago it looked like conditions were starting to revert to those of late 2008. As the managers of the UK’s foreign exchange reserves we experienced some of these deteriorating conditions at first hand. (It is a neglected point that the Bank of England is a significant participant in the market on behalf of HM Treasury through reserves management operations, as well as being the monetary authority for sterling markets.)

So equity-linked structured notes, for example, have been out of fashion. High yield (non-financial) corporate bonds and Exchange Traded Funds (ETFs) have both been in. But since the risks in some ETFs were highlighted – by the UK’s new Financial Policy Committee amongst others – some of the more complicated ETFs and those with opaque securities lending programmes, have faded somewhat. It is not that investors are avoiding all credit risk – where it can be properly assessed and a diversified portfolio is possible. For example, the end-investor demand for corporate credit ex-financials is generally very strong. The announcement of OMTs by the ECB and the other announcements by the US Fed and the Bank of Japan, appear to have led to a collective sigh of relief in recent weeks. Yields on Spanish and Italian debt have fallen since the announcement – by 100bps or so at 10 years – and equity markets are up. I hope that the ECB action lays the foundation for a successful resolution of the European debt crisis. The view of markets so far is positive in that regard. I would caution, however, that we have been here before. Along with every other market participant I hope that this time will be different. But central banks cannot solve fundamental problems in the real economy, even using unconventional measures – they can only give the time and space for governments and private sector agents to do so.
Role of the authorities Oversight in Sweden is the responsibility of the Riksbank. We are required by law to “promote a safe and efficient payment system”. The payment system is such a large component of the financial system that our role can really be described as being to promote the latter’s general safety and efficiency. Supervision, however, is the function of the Financial Supervisory Authority. What this means is that the Riksbank primarily oversees developments in a system or a market, while the Financial Supervisory Authority, besides monitoring the stability of the entire system, focuses on the situation in each institution. In practice, however, these two roles are difficult to distinguish clearly, so close cooperation between the two authorities is important. It is indeed a hallmark of our relationship, from the executive level down to managers and their personnel. Still, the Riksbank is in a position to detect more direct problems at an early stage, since they are likely to show up in the payment system, for which we are responsible. Our possibilities of affecting the course of events then lie in talking with bank executives and informing the Financial Supervisory Authority. Moreover, our series of Financial Stability Reports can no doubt exert a more continuous  5  BIS Review 127/1999  influence in this respect. In the longer run the Riksbank can also contribute to stability through international cooperation, as well as by participating in Sweden in work on new legislation and the promotion of structural changes in various systems.

To date, the inflation targeting policy must be said to have done well on the whole in this respect; today, the inflation target seems to function as a credible benchmark, a nominal anchor, for price and wage formation. That wage formation does not yet seem to have been fully adjusted unemployment in Sweden remains high - is another matter. It probably has more to do with structural factors. For asset markets, however, there is no such clear benchmark. So neither is there anything to prevent psychological factors - irrational exuberance, if you like - from continuing to inflate various asset prices beyond what is reasonable in relation to underlying economic conditions. The path of the American stock exchange in recent years demonstrates that low inflation is often not sufficient to ensure a restrained development of asset prices. That this can be seen as something of a dilemma is understandable. Does this imply that monetary policy should in fact be used more than hitherto for actively and directly countering sizeable price increases in asset markets? There is no obvious answer to that question but the dominant opinion at present is that the answer should be no. This is because central banks would find it difficult to identify true bubbles in the development of asset prices and judge the BIS Review 127/1999  4  appropriate measures correctly. Still, I would like to leave the door ajar. Situations may arise that are hard to foresee today and where monetary policy may need to play a part.
Indeed, while in the initial consolidated State budget for 2013 these three items accounted for around 18.2% of GDP, in 2014 they are expected to represent around 18.5% of GDP and close to 55% of total consolidated public spending. The budgetary adjustment will therefore continue to focus on government consumption, for which a real-terms reduction of 2.9% is projected in 2014 for overall general government, based partly on the civil servant wage freeze and on the extension of austerity policies in relation to public-sector employment; and, moreover, on the reduction in public investment. A further expenditure-containing factor will stem from the envisaged revision of pensions, set at 0.25%, in line with the floor established in the draft law defining the sustainability factor. BIS central bankers’ speeches  5  How do these figures compare with those for the euro area as a whole? In terms of GDP, the weight of unemployment benefits continues to stand far above the euro area average, as a result of our high unemployment. Interest payments on debt in Spain are also expected to exceed the euro area average, while spending on pensions would continue to be below the average, given that demographic developments in our country remain more favourable. On the revenue side, a 2.4% increase in total tax receipts (including the share of regional and local government) is forecast, with very few tax changes. These are concentrated in the broadening of corporate income tax bases approved last June.

It is envisaged that more than 90% of the Spanish banking system, measured by volume of assets, will be supervised by the SSM. 6  BIS central bankers’ speeches  Prior to the ECB effectively taking over supervisory responsibilities, a bank asset review and valuation is planned which will give rise to the requirement of a level of capital to be met by all banks subject to the review and, where necessary, to the setting up of additional coverage. It is worth noting that our banks are starting from a very reasonable level, both from the perspective of the accounting classification of their assets, and from that of asset coverage and provisioning, the result of the review conducted last year under the stress tests and of the above-mentioned recapitalisation processes. Recently, banks’ review of refinanced loans has also concluded, a process which contributes to shoring up their position ahead of the forthcoming evaluation of the quality of their assets. Likewise, and once more with a view to reinforcing the solvency of our banking system, the Banco de España has recommended that banks moderate the distribution of dividends during 2013 and that, in any event, the cash dividends paid out should not exceed 25% of attributable consolidated profit. Naturally, all banks are following this recommendation. The solvency position of Spanish banks has clearly improved in 2013. Average core capital in our banking system will stand at around 10.5% as at December 2013, more than 1 pp up on the same figure a year earlier.
20 Current UK household debt is twice the 2002 level in aggregate but debt servicing cost is half so the debt  service ratio is unchanged 21 For example, micro data studies from the UK, US, Denmark and Norway have all found statistically significant correlations between higher levels of household debt and the size of consumption cuts in a shock. For example Andersen et al (2016), Kovacs et al (2018), Dynan and Edelberg (2013) and Fagereng and Halvorsen (2016). 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  One might expect to see similar effects in the corporate sector. And indeed, Bank staff estimate that the share of corporate debt owed by highly leveraged companies has now pretty much grown back to pre-crisis levels. 22  This is a risk because we know that more leveraged firms cut back on investment and employment by more in a downturn.23 All else equal therefore – and crucially, absent policy – a low for long world is likely to be one with a less resilient and riskier financial system and a more leveraged real economy that, as a consequence, is more vulnerable to macro-economic shocks. Financial stability challenges of low for long: the risk of more severe downturns And this brings me to the third challenge of low for longer for financial stability – the risk that in such an environment, economic downturns will on average be more severe.

11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11  And the challenges are very different in different jurisdictions, not least because of differences in the structure and effectiveness of monetary policy transmission mechanisms.25 But, taken together with other changes in the economy – such as changes in the labour market which appear to have led to some flattening of the wage Phillips curve and changes in the pass-through of labour costs to consumer prices – the probability is that demand management will need to use more tools to stimulate demand in downturns and work harder to prevent macro-economic tail events. There is a lively debate over the extent to which aggressive use of monetary policy tools to stimulate demand creates financial stability risks by inflating asset prices and encouraging risk taking and the build-up of debt. My own view is that this can be overdone. There are, as I have said, deep-seated underlying structural drivers of low for long. We have not seen an explosion of real economy debt in advanced economies in recent years even with very low rates (Chart 2). Debt-to-GDP has not risen in advanced economies, although there has been a rotation from private sector to public sector debt. Prices of real assets like housing have been growing at a moderate pace in most advanced economies.
According to a research of the World Bank, in the years 2005 - 2025, the labour force participation rate in the developed countries of high income will fall by ca. 20 million, whereas that the developing countries will increase by almost a billion. At the same time, in view of the aging populations, especially in Europe, there will be a rapid growth in the number of elderly people, from 36 per 100 working people to 52 per 100 working people. These trends, coupled with a fivefold difference in average wages between the developed and the developing countries, will inevitably bring about an increase in the economic migration rate. What triggered the emergence of the global labour market?

For instance, South Korea is the eleventh global economy with th the voting share of 0.77%, which makes it hold 28 position among the IMF participants; whereas as per analyses of Kelkar V. et al. ”The International Monetary Fund: entitled Integration and Democratization in the 21st Century”, presented at the meeting of G24 in Manila, 17 - 18 March 2005, the total vote of Brazil, China and India in international institutions is equal to the total of Italy, Belgium and the Netherlands, whereas the total GDP of the first group of countries based on PPP is fourfold higher, with a 29 times larger population. 2  BIS Review 64/2006  Chart 1. Global demographic trends – the world population according to UN forecasts  LO – left axis (LA) PO – right axis (RA) Africa – (LA) Europe – (RA) The rest of the world – (RA) Asia – (LA) North America – (RA) Note: „LA”, „RA” mean the left and right axis, data in million persons. Source: the UNO, http://esa.un.org/unpp/  Hence the demographic developments, supported by the globalization mechanisms which have led to the establishment of the global labour market, will drive Asia and possibly some areas of Africa to become fierce competitors for Europe and the US in the forthcoming decades. There are many estimates that show the sizes of particular economies in the decades to come, based on demographic trends, assumptions concerning the long-term growth of performance, or changes in real FX rates.