samchain/econo-pairs-v1 huggingface dataset:
One advantage put forward on the basis of this is that a nominal growth target can provide a desirable adjustment even to more long-term  29 See Cecchetti and Schoenholtz (2017). For a more detailed review of different types of criticism, see Yellen (2015) (footnote 14) and Bernanke (2017b). 30 Summers (2018). However, it is interesting to note that one of Summers’ arguments in favour of a target for nominal GDP growth (of 5-6 per cent) is that it: ”would attenuate the issues around explicitly announcing a higher inflation target, which I think are a little problematic on political economy grounds”. Examples of other advocates are Scott Sumner and Jeffrey Frankel (see, for instance, Sumner, 2011 and Frankel, 2012). Another variation on this is that the target should instead concern the level of nominal GDP. For a discussion of this and other target definitions that I do not take up here, see Andersson and Claussen (2017). 31 Inflation is in this case measured according to the so-called GDP deflator. 14 [24]  changes in the economy. If, for example, the growth potential declines, it is probable that the neutral real interest rate will fall. But the lower growth potential means that with a nominal growth target one also has a higher implicit inflation target, which in turn should make it easier to attain a negative real interest rate and an expansionary monetary policy in situations when this is needed. The effect would thus be similar to the increase in the inflation target I talked about earlier.

For some time now we are no longer affected by financial premiums that resulted from credibility problems in economic policy. This can be seen, for instance, in the fact that the difference in ten-year government bond yields between Sweden and Germany is much less than before (see Figure 6). The fact that interest rates and exchange rates vary relatively little despite the difficulties in forming a new government can also be regarded as an indication that the Swedish economy enjoys a high level of confidence. The fiscal policy framework introduced after the crisis in the 1990s is central to this stability and it is important to safeguard it. Creating confidence takes a long time, but it can be lost very quickly. Having said this, it does of course feel reassuring to have fiscal policy room for manoeuvre, even if one would prefer not to use it. The role that fiscal policy should play is therefore not an uncomplicated question. But I think that it is nevertheless important that the question of how to stabilise economic activity when the Riksbank's possibilities are not unlimited is brought up on the economic policy agenda. 22 Before I go on, it may be worth emphasising that yet another alternative for stimulating the economy that is sometimes mentioned – what is known as “helicopter money” – also requires interaction by monetary policy and financial stability. In brief, helicopter money involves the government increasing public expenditure or cutting taxes and this being funded by a permanent increase in the money stock.
With the pandemic also affecting global supply chains for goods it’s proved that much harder1. There are still good reasons to think that this rapid inflation in tradable goods prices is likely to fade, and in some cases reverse, before a policy decision taken now could do much to offset it. In contrast, and although Many individual policy makers have discussed these points (I did so in a couple of speeches earlier this year - “Covid and the Composition of Spending” in January, and then “Mismatch” in July). As the MPC we’ve done so in successive Monetary Policy Reports this year (see, in particular, the ‘in focus’ section in the August Report). 1  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  it’s so far contributed much less, the tightening of the domestic labour market is likely to be a more persistent source of inflation. That’s why the MPC has paid close attention to it, and in particular how it’s behaving now that the furlough scheme has ended. As I say, I’ll have a little more to say about these things – whether rapid goods inflation is likely to prove transitory, what people have actually meant by that word, and what we’ve learned about the post-furlough labour market – in a bit. Sandwiched around those points, both at the end and now, are a couple of more general points about monetary policy. These too are familiar but they’re particularly relevant in the current environment and are therefore worth reiterating.

Where they exist, that’s  2017-19 Average  consistent with the current pattern of forward prices,  350 300 250  as you can see from both Chart 1, for wholesale  200  gas, and Chart 12 for shipping costs. (For what it’s  150  worth, the spot price of shipping containers, plotted  100  as the red line in Chart 10, has actually declined in  50  recent weeks, down nearly 30% from its peak in mid-September.) It’s therefore quite possible that, in a couple of years, the contribution of some of these items to UK inflation will be not only smaller but negative. Sources: Baltic Exchange and Bank calculations. Panamax is a sub-index covering mid-sized vessels travelling on 5 of the 23 shipping routes of the full index. It co-moves closely with the overall Baltic Exchange Dry Index. Having said all that, there’s no doubt that the path of these global goods prices is highly uncertain. Even if it’s still the right judgement that recent inflation rates are “transitory”, in the sense I defined earlier, that doesn’t mean our central forecasts are an inevitability. In the last Monetary Policy Report the MPC produced two forecasts for inflation, one in which gas prices followed the full path priced into financial markets, and therefore fell steeply throughout the next three years, another in which they stabilised at a relatively high level.
Unless mergers are accompanied by other measures to improve corporate governance, we will merely create one large weak bank out of several small weak ones. Financial sector reforms also have to include strengthening of the supervisory system and institutions. Had supervision been adequate in the first place, the problems would not have become so grave. Professional and independent supervisory authorities will tighten standards of acceptable banking practices, and over time instil rigour and rectitude among all participants in the system. The supervisors have to set standards, penalise errant lenders, and remove implicit guarantees. Credit discipline will foster the emergence of stronger companies, and provide the basis for sustained growth. Political and social preconditions All these policies - accepting globalisation, fostering ASEAN economic cooperation, restructuring the corporate sector, and reforming the banking sector - are essential for countries to recover. But to be in a position to implement and make such economic policies work, countries must first create the right political and social preconditions. Investors, both domestic and foreign, will adopt a wait-and-see attitude until they know how political uncertainties are resolved. Their views are coloured by past experiences, and they will look for evidence of a clear break with the past. A stable political climate is essential to foster confidence, investment and growth. Governments must put their houses in order, bring corruption under control, and install men and women of integrity and competence to key positions within the top leadership.

As Mr Anand Panyarachun, former Prime Minister of Thailand and now President of the Thai chapter of Transparency International, said: “The very basis of a non-corrupt culture is integrity. … It is a state of mind, an attitude. You can be corrupt without taking any money.”2 The values, norms and business environment of ASEAN countries cannot be transformed overnight. It is more than enacting new laws and regulations. It means changing deeply established social relationships and norms which vary from country to country. Businessmen, civil servants and politicians used to operating in one way for years will not suddenly abandon or condemn old practices as soon as a new law is passed. Mom Rachawong Chatu Mongol Sonakul put it aptly: “What we are doing is a very long process. We’re not talking of months or years. We are talking in, maybe, decades or generations. We’re not changing our way of working. We actually try to change our way of life.”3 These are matters that each country has to resolve for itself, in its own way. External inputs can be helpful, but may also be counter-productive. For example in Indonesia the IMF sought drastic economic reforms, which inevitably had far-reaching political implications. The result was a complete collapse of the Suharto government. But creating a new order to follow this is now a challenge which only Indonesia’s people and leaders can resolve. Foreign advice and assistance now play only a secondary role. 2 3  Asiaweek, 3 November 2000.
Durmuş Yilmaz: Economic outlook for Turkey Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at a meeting organised by the Chamber of Commerce and Industry of Malatya and Dünya daily newspaper, Malatya, 7 September 2006. *  *  *  Distinguished industrialists, businessmen, guests and members of the press, I am very pleased to be in Malatya for this meeting arranged to bring together the Central Bank and the real sector and to create common ground for exchanging views. I would like to extend my most sincere thanks to the Chamber of Commerce and Industry of Malatya and to Dünya daily newspaper for the excellent organization of this meeting. In today’s meeting, I would like to focus on the importance of Central Bank independence and price stability within the framework of our Bank’s monetary and exchange rate policies. Following this I will talk about the inflation targeting regime and developments in inflation as well as those in floating exchange rate regime and financial markets and lastly, I will touch upon some of the issues at the top of the agenda, such as growth, employment and the current account deficit. The amendment made in the Central Bank Law in 2001 was a turning point for monetary policy implementations in Turkey because as per this amendment, the Central Bank of Turkey acquired instrumental independence and the Bank’s primary objective was set as achieving and maintaining price stability.

Analyzed in terms of the ratio to national income, the ratio of the current account deficit was 6.4 percent by the end of 2005. The said ratio rose to 6.9 percent in the first quarter of 2006. Certainly, high rates of current account deficit are not peculiar to Turkey and can also be observed in other transition economies that grow at similar high rates. For instance, the ratio of current account deficit to gross domestic product is 11.8 percent in Bulgaria, 8.7 percent in Romania, 7.9 percent in Hungary and 7.2 percent in the Slovak Republic, as of 2005 1 . Higher rates of global and financial integration enable countries to sustain higher rates of current account deficit, to the extent that the robustness of their macroeconomic fundamentals allows. Due to the impact of these conditions, a current account deficit on a higher plateau has also been sustained in Turkey in recent years. 1  IMF, World Economic Outlook, April 2006  BIS Review 89/2006  9  The recent high increase observed in the current account deficit in Turkey is not the result of the increase in consumption, but comes from the increase in investments that boosts the production capacity. Crude oil prices, which have been following a high and volatile course in international markets and maintaining their upward trend in recent years, stand as another factor explaining the widening of the current account deficit.
This averaging principle, which grants the banks more flexibility in meeting their reserve requirements, is conducive to more orderly market conditions. Since the start of EMU in January 1999 the ECB has been providing its (weekly) refinancing to the euro area banking system based on the concept of a benchmark allotment. This benchmark allotment is defined by the ECB as the allotment amount which allows counterparties to smoothly fulfil their reserve requirements until the end of the day before the settlement of the next MRO, when taking into account the aggregate liquidity need of the banking system. 4. The Eurosystem accepts a wide range of collateral to underlie its operations, including marketable and non-marketable assets. The Eurosystem has put in place a single framework for eligible collateral, which covers marketable and non-marketable assets that fulfil euro area-wide eligibility criteria. As far as marketable assets are concerned, there are four liquidity categories: The first and best category is made up by central government debt instruments, the second by jumbo covered bonds, agency, and local or regional government debt instruments, the third by covered and uncovered bank bonds and the fourth by asset backed securities. There are two types of non-marketable assets that are accepted as collateral: credit claims and non-marketable retail mortgage-backed debt instruments.

On the other hand, the consequences of the coronavirus crisis could also impact on the soundness of money. Overall, state financing needs and thus government debt have increased considerably as a result, and this could undermine the third mainstay if countermeasures are not taken over the medium term. In addition to this, many central banks have themselves bought exceptionally high amounts of their country’s own sovereign debt. In a crisis, that may be the right thing to do in terms of monetary policy, but it must not be done for reasons of 9 Money supply and monetary aggregates can be represented as the product of the money multiplier and the monetary base. 10 For more information on the sovereign wealth fund issue, cf. inter alia Jordan, Thomas J. (2016), Comments on Swiss monetary policy, speech at the SNB AGM, Berne, 29 April. For more information on how the SNB contributes to a healthy pension system, cf. Jordan, Thomas J. (2019), Challenges confronting the pension system – options and limitations of monetary policy, speech at the PK-Netz conference, Berne, 31 October. Page 7/8  state financing. The challenge lies in safeguarding the clear separation of responsibility for monetary policy and fiscal policy even in this crisis situation, and thus ensuring that central banks remain independent in practice and not just on paper. It is particularly important to avoid scenarios where excessive government debt means that a central bank is de facto forced into making its decisions dependent on their impact on public finances.
Subsequently, yields rose on Icelandic bank bonds in the secondary market. These new conditions prompted extensive discussion by analysts with international banks and others about the position of the Icelandic banks. Attention focused in particular on the banks’ business model, i.e. their high degree of leverage. It was pointed out that deposits account for a smaller share of the banks’ funding that is customary among  2  BIS Review 46/2006  comparable banks in other countries. Thus Icelandic banks are more dependent on access to credit than is the norm. Also, the banks’ enormous expansion has been noted and some observers wondered if it has not been unduly rapid. Whether or not the banks’ positions and strategies deserve to be called into question is immaterial. The banks must take this dialogue seriously, by providing much more transparent information, correcting obvious misrepresentations and responding earnestly to criticism that may be justified. This is precisely what they have been doing in various ways and the results are already beginning to appear. Macroeconomic imbalances, rapid banking sector growth and recent negative press prompted foreign investors to raise Iceland’s risk profile. Higher required yields in the secondary market for bank bonds and for Credit Default Swaps indicate that the banks’ financing costs have risen, at least for the time being. While there is nothing unusual about such a development, what is surprising is how much wider spreads have been required relative to the terms offered to banks with comparable credit ratings.

Required yields have now fallen again in the secondary market and so has pricing of Icelandic banks’ CDSs. The banks have also tapped international credit markets on favourable terms recently and have more than met their capital requirement so far this year. Their market position has therefore definitely improved again, which must be welcomed. The banks have vigorously expanded in other countries in recent years. Most indications are that their foreign investments have been successful, in the Central Bank of Iceland’s view. Their subsidiaries are sound financial companies subject to stringent supervision in their home countries, just like the parent companies in Iceland. Likewise, these companies operate in stable economies where the outlook is bright. At the end of 2005, two-thirds of the banks’ consolidated lending was to foreign borrowers. In effect, therefore, overseas expansion has strengthened the banks’ foundations. They are no longer so much at the mercy of economic fluctuations in Iceland or any other country. On the contrary, their risks are dispersed. Pension funds I shall now turn to the matters in which you are most directly involved, the position of pension funds in Iceland. Their position is remarkable in all respects, especially by international comparison. Most or all other industrial countries have rapidly ageing populations and face growing and serious fiscal concerns about future pension fund arrangements. Since their pension schemes are largely funded by taxation, a sharp rise in contributions is foreseeable over the next few decades.
Strategies therefore focused on introducing reform measures to strengthen the banking sector and develop and enhance alternative sources of financing. The objective is to develop an intermediation structure that will facilitate an economic transformation toward a more diversified economy, namely: ·  Develop the domestic bond market;  ·  Develop venture capital industry to support new growth areas such as the ICT and bio-technology sectors;  ·  Enhance the framework for financing the small and medium-sized enterprises or SMEs;  ·  Develop micro finance services especially micro credit for micro enterprises; and  ·  Strengthen the development financial institutions to ensure more effective use of public sector resources in achieving socio-economic objectives and greater complementaries with the banking sector. Following the successful financial restructuring and consolidation of the banking sector, efforts have shifted to building the domestic financial infrastructure. The industry-wide consolidation exercise for the domestic banking institutions after the crisis saw the 71 banking institutions pre-crisis being consolidated into 10 domestic banking groups. The consolidation exercise was a major structural enhancement of the financial system. Banking institutions have now attained a minimum capital size that is able to benefit from economies of scale and undertake the necessary investment in technology important to the industry. A major transformation of the structure of financial intermediation can be seen in terms of the deepening and broadening of the private debt securities market.

Our goal is to provide information that helps households and businesses follow the data along with the Fed. If people know more about how the economy is performing and how that is likely to influence our actions, this should make it easier for us to achieve our twin objectives. I will now turn it over to Rob to discuss the Snapshot in greater detail. 2  BIS central bankers’ speeches
But perhaps the most salient international economic development in 2004 was the persistent rise in oil prices. At the root of this, above all, is the force of demand from the United States and China, in a  BIS Review 45/2005  1  situation marked by production and refining capacity bottlenecks, arising from limited investment in the past. Compared with other recent periods of oil price rises, such as the peaks in 1990 and 2000 linked to geopolitical tensions, the increase in prices on this occasion fed through to a much greater extent to long-term futures contracts, suggesting the markets are expecting oil prices to hold at high levels. Despite this, and on the indicators available, dearer energy scarcely affected inflation expectations, meaning the so-called second-round effects - linked to the reaction by wages - were avoided. On past experience, it is these latter affects which are most damaging. So far, the effects of higher oil prices have been surprisingly mild. But economic policies should remain vigilant in the face of a potential pass-through to inflation expectations, all the more so when there are other risks and vulnerabilities in the world economy which, in some respects, have not only not diminished but have tended to increase. Of note, here, is the necessary re-establishment of a more normal macroeconomic stance (the main countries’ policies have been adding abnormally expansionary momentum in the world economy in recent years), and the potential impact on financial markets.

Figure 10 CPI inflation forecast (1) (2)  CPIEFE inflation forecast (1) (2)  (annual change, percent)  (annual change, percent)  5  5 5 Dec.19 MP Report  4 3  5 Dec.19 MP Report  4 4  4  3 3 Mar.20 MP Report  2 1  3 Mar.20 MP Report  2 2 1 1  0  1  0 0 18  19  20  21  22  0 18  19  20  21  22  (1) 2018 figure shows the annual variation in the CPIEFE obtained by splicing the 2013=100 series with the monthly variations of the 2018=100 basket as from February 2018. See box IV.1 Monetary Policy Report of in March 2019. (2) Gray area, as from the first quarter of 2020, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE).
Three-month moving average, goods exports in fixed prices calculated by the Riksbank. Sources: Statistics Sweden and the Riksbank  14  BIS Review 23/2009  Higher unemployment Per cent of labour force, seasonally-adjusted data 14  14 Unemployment 16-64 year Unemployment 15-74 year  12  12  February December  10  10  8  8  6  6  4  4  2  2  0  0 80  82  84  86  88  90  92  94  96  98  Note. Broken lines represent the Riksbank’s forecasts. 00  02  04  06  08  10  12  Sources: Statistics Sweden and the Riksbank  Forecast for GDP growth in Sweden and abroad Quarterly change in per cent calculated as an annual rate, seasonallyadjusted data 5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  Sweden USA Euro area TCW  -3 -4  -3 -4 -5  -5 07  08  09  Note. Broken lines represent the Riksbank’s forecasts.

I cannot really comment on Italy at that current stage where we are in a political flux and that's clearly not our role to step into that. Apart from trade and your desire to see greater productivity reform, structural reforms, 2/3  BIS central bankers' speeches  fiscal buffers as well, what are the other issues that you have greatest concern about at the moment in global markets, global economy? Trade – as we just discussed – is clearly top of the agenda. That's the biggest concern we have today. And Brexit? Brexit is a concern but there is a political negotiation and the ECB is not part of this political negotiation. We very much hope that this can be settled in a way that makes it smooth, that does not harm confidence. But we also trust that it can be settled in a way that preserves the integrity of the European project in terms of the four freedoms, in terms of the single market, in terms of having effective ways to regulate our financial industry and to supervise our financial industry to achieve stability in Europe. A huge part of the EU financial industry is based in the United Kingdom, the fundraising for the broader EU is based in many ways in the United Kingdom. The clearing, the forex, the bond trading as well.