samchain/econo-pairs-v1 huggingface dataset:
3  All speeches are available online at www.bankofengland.co.uk/speeches  3  One is that the current extent of world trade isn’t entirely novel and should in some ways be seen as a recovery. World trade had grown very strongly under the classical gold standard, during the second half of the 19th century. The same goes for the capital flows that financed these exchanges. The catastrophes of the world wars, and the intervening Great Depression, put all that into reverse. Partly as a natural consequence of economic contraction, partly thanks to outright protectionism, trade volumes fell sharply between 1914 and 1950, even relative to world GDP. Chart 2: Costs of trade fell sharply in 1970s  Second, although the conditions for a revival began 2  to be laid during the 1950s it wasn’t until the 1960s and early 1970s that trade costs started to fall, and trade intensity to rise, in earnest. In this first phase of (re-)globalisation, during the 1970s and 80s, much of the growth in trade occurred between developed economies. Third, there was a further and very marked rise in trade intensity during the 1990s and the early part of the last decade, as developing economies entered the world trading system. Source: Jacks , Meissner, and Novy (2011)  Finally, you can see clearly how world trade has stalled, relative to GDP, since the financial crisis a decade ago. This is to cut a long and complex story very short.

They are likely to stay slightly above 2%, largely owing to commodity price developments, before moderating again towards the end of the year. Overall, we see evidence of short-term upward pressure on overall inflation, stemming largely from global commodity prices. While this has not so far affected our assessment that price developments will remain in line with price stability over the policyrelevant horizon, very close monitoring of price developments is warranted. Inflation expectations over the medium to longer term continue to be firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. Risks to the medium-term outlook for price developments are still broadly balanced but could move to the upside. Upside risks relate, in particular, to developments in energy and nonenergy commodity prices. Furthermore, increases in indirect taxes and administered prices may be greater than currently expected, owing to the need for fiscal consolidation in the coming years, and price pressures in the production chain could rise further. On the downside, risks relate mainly to the impact on inflation of potentially lower growth, given the prevailing uncertainties. Turning to the monetary analysis, the annual growth rate of M3 increased to 1.9% in November 2010, after 0.9% in October. This strong increase is in part related to base effects and volatile factors. The annual growth rate of loans to the private sector also increased, rising to 2.0% in November from 1.5% in October.
All these developments highlight the need to explore and develop a new frontier of regional cooperation in Asia, particularly for the development and integration of financial markets, and build a bigger market to cope with the changing dynamics of international finance. BIS Review 61/2006  1  The development of deep and sound financial markets must start at home. Only the relevant authorities within each jurisdiction have the ability to establish a regulatory and institutional framework that will permit and encourage the growth of a vibrant private financial sector. All of us in the region understand this and are working individually to improve our domestic markets, albeit from very different starting points, which explains the differences that still exist among us in the size and sophistication of our financial markets. But the development of the financial sector in each economy is limited by the size of our domestic markets unless we open our borders to international trade in financial services and the establishment of foreign financial institutions on our territories. Banking and finance are subject to economies of scale and scope, so the expansion of the effective market size is necessary to make the provision of financial services more efficient. In addition to taking advantage of economies of scale and scope, the case for integrating financial markets across jurisdictions is simply an extension of the case for developing the markets within each economy.

The implication of these possible explanations is, if these exchange rate and commodity price effects ease as expected, or credit conditions become less tight, inflation will fall as the influence of the underlying demand and supply imbalance becomes the dominant influence. But an alternative and less reassuring explanation might be that the pricing climate has changed (following a lengthy period in which firms appeared to set prices in conditions of intense competition), suggesting that firms’ prices might respond less for a given degree of slack in the economy. The key conclusion I would draw from this is, that although from time to time criticised for too much reliance on one model, the MPC has in fact shown itself open to considering a range of interpretations over time, and is fully aware that different circumstances may point to different challenges. At present, neither the extent of excess capacity nor the impact of capacity pressures on inflation are easy to assess. The track record of the judgements we made in more stable times may well not be a good guide to the future. It therefore makes sense to look at a range of estimates both of the gap and of its effect in order to give some guidance to the range of likely economic outcomes. Implicitly, such a range is contained within the fan charts of GDP and of CPI inflation published quarterly in the Inflation Report.
The monetary easing has been bolstered, moreover, by a policy of abundant liquidity supply in ordinary operations; extraordinary operations at terms of up to three years; the broadening of the range of guarantees or collateral accepted for liquidity-provision operations; the launch of asset purchase programmes; and, finally, the approval in August 2012 of the Outright Monetary Transactions programme, which has not had to be used, but which is one of the “weapons” at our disposal and which played an important role during the very difficult times the euro area experienced in the summer of 2012. And lastly, in this area, the latest novelty: the “forward guidance” policy, involving the more precise communication of the future behaviour of official interest rates, shadowing the measure used some time ago now by the Federal Reserve. Outside the monetary policy sphere, mechanisms have been set in place in the European Union to provide funds to those Member States deprived of access to the capital markets. Also, a reform of the economic governance of the area – whose ultimate scope may prove substantial – has been launched. Turning to what we call the “real” economy, following six consecutive quarters of contraction euro area GDP posted a year-on-year rate of increase in the second quarter of this year of 0.3%. And analysts expect a positive though moderate rate for the third quarter.

Today's forum therefore seems to fit in very well with the European spirit now sweeping Hong Kong, and I congratulate the organisers on putting together a very lively and topical programme. It is a particular pleasure to be presenting together with Christian Noyer, Governor of the Banque de France. He has made some very thoughtful remarks on the first question for discussion. I intend to comment on the second question: "Can the euro be a benchmark for Asian monetary co-operation?" But before I address this question, we need to ask another question: how ready is Asia for closer monetary co-operation? We are, I think, all aware of the considerable differences in the political systems, the cultures, the historical backgrounds, and the economic, financial and monetary systems of the countries in this region. I think it is largely accepted that these differences are greater than the differences between the various economies that make up the euro zone. Nevertheless, it is important not to overstate them. Nor should we overlook the regional integration already in progress in the trade, financial and monetary spheres. Let me briefly outline these three forms of integration. About half of total trade in the Asia region is intra-regional trade. Trade integration has been largely market-driven, and the process has stimulated the signing of various free trade agreements, which will, in turn, encourage further trade integration in the region.
One of the strengths of the UK monetary policy framework is that MPC members are individually accountable for their decisions and votes. The resulting expression of different views, and implied necessity for debate among them, guards against the emergence of ‘group think’ and thereby helps improve the robustness of final policy decisions. Given different appraisals of the economic situation and outlook, these different views reflect different assessments of how the MPC should act to achieve its common goal. Because, even if MPC members are individually accountable for their decisions, they don’t get to choose the MPC’s objectives. They are individually responsible for the means, but not the ends, of monetary policy. The ends of monetary policy are handed to the MPC in the form of its remit, which achieves democratic legitimacy through its roots in legislation approved by Parliament. [4] That remit has three main elements. First, it establishes the primacy of price stability in the mandate for UK monetary policy. Second, that primacy takes concrete form in the 2% inflation target, which holds at all times. And third, the remit requires the pursuit of the inflation target to be achieved sustainably in the medium term, while avoiding excessive and undesirable volatility in output and employment. Given the current situation, pursuit of this remit faces risks on both sides.

In the Asian financial crisis, it ran its full course with the rapid price adjustments in most asset markets taking place within a period of just over a year. In Asia , there was limited potential to reduce interest rates in an environment that was vulnerable to capital outflows. The focus of policy in Asia was therefore on the resolution of the banking sector and to restore the functioning of the intermediation process. In most of the crisis affected economies in Asia , this strategy produced positive results and growth resumed within twelve to eighteen months. Financial crisis and Islamic finance In the midst of the unfolding of the global financial crisis, it is useful to review the foundation and structures of the Islamic financial system to assess its resilience in withstanding the impact of the current and future crises. In taking into account the dynamics of the crisis and the potential implications for Islamic finance, two important dimensions are key in undertaking the assessment. The first key dimension highlights the inherent ability of Islamic financial system to deal with the test of such crisis. Islamic finance is well-supported by two essential features which serve as pillars to Islamic financial transactions. Firstly, Islamic finance encourages business and trade activities that generate legitimate profits, subject to an explicit requirement of materiality and validity of the transaction. This requirement ensures that the funds are channelled into real financial business activities, reinforcing a close link between financial  2  BIS Review 145/2008  and productive flows.
But we also learned to pay more attention to the structural, supply-side capacity of the economy and in particular to the role of reform - and deregulation, subject to appropriate safeguards, of goods, capital and labour markets, as the means of increasing the economy’s flexibility and the underlying rate of growth that can be sustained. We learned finally that these twin approaches - of macroeconomic stability and supply-side reform reinforce each other. It is these understandings that lie at the heart of our present economic policy framework. On the macroeconomic side, the Government has enacted legislation which requires it to set out transparent rules for fiscal policy. For the current Parliament it has chosen to adopt two specific rules. First, over the economic cycle, Government borrowing will be restricted to borrowing for investment, and not to fund current spending; and Secondly, net public debt as a proportion of GDP will be kept at a prudent and stable level over the economic cycle. These rules taken together are designed to ensure financial stability in the medium-term, but also allow for automatic stabilisation in response to fluctuations in output growth in the short-term. On the monetary side, the Government has set a low, symmetrical target for underlying retail price inflation as the objective of monetary policy; and it has devolved technical responsibility for setting short-term interest rates to achieve that objective - on average over time - to the Monetary Policy Committee of the Bank of England.

Krzysztof Rybiński: Inflation targeting and the challenges ahead Opening remarks by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the “Inflation Targeting - Third Joint NBP & SNB Seminar on Monetary Policy”, Warsaw, 18-20 May 2006. *  *  *  Ladies and Gentlemen, I am pleased to welcome you at the third seminar on monetary policy organized jointly by the Swiss National Bank and the National Bank of Poland. Let me start by thanking staff members from the host central banks, who have not spared their efforts on preparing this seminar. For the first time in our seminar, apart from economists from the host central banks we have invited representatives of other central banks to share with us their knowledge and experience with inflation targeting. Thus I would like to warmly welcome our guests from the Czech National Bank – the first inflation targeter in Central and Eastern Europe, and from the Central Bank of Turkey – a brand new inflation targeter, which has adopted the framework only this year. The topic of this year’s seminar is inflation targeting (henceforth called IT). As the distinguished former Fed chairman Paul Volcker recently remarked 1 , inflation targeting may sound like an oxymoron since usually central banks strive to fight inflation rather than to breed it. So should we gather here to discuss ways of breeding inflation?
The pace at which the role of the euro as an international currency will develop is hard to predict. But what can be said is that the global acceptance of the euro in the international financial markets depends first and foremost on market confidence in the stability of the euro. In this context, the ECB’s monetary policy committed to the pursuit of price stability provides an important contribution. In the same vein, by participating in 5  BIS Review 72/2000  international policy cooperation, the ECB contributes to reducing the risks of negative externalities and to fostering the adoption of best policy practices at the international level. This is an important contribution of Europe to a more stable international financial system. BIS Review 72/2000  6

Implementation of the investment policy  Our investment policy has not fundamentally changed with the new Act. The monetary reserves continue to constitute core assets for monetary policy. They allow the National Bank to exert an influence on the Swiss franc exchange rate in exceptional situations and are available as an internationally accepted means of payment in a crisis situation. This presupposes a minimum degree of liquidity of these assets. Moreover, monetary reserves enhance the credibility of monetary policy and foster confidence in the Swiss franc. The security of these investments and growth of the monetary reserves in step with the development of the Swiss economy is an important consideration in this context. This is why monetary reserves ought to provide an adequate return, while taking into account the monetary policy restrictions. It is the aim of our investment policy to strike an optimal balance between the criteria of liquidity, security, and return. We assess and regularly review the National Bank’s liquidity requirements - i.e. its need for easily realisable and hence easily accessible assets - on the basis of our experience and taking due account of the current situation. Given the Bank’s large portfolio holdings in US dollar and euro government bonds, the liquidity requirements are currently more than met. This creates a certain amount of leeway for investing in instruments that are less liquid but generate a higher return. The investment criterion “security” must be seen in the context of the monetary reserves as a whole.
The productivity challenge  In recent decades the increase in total factor productivity (TFP), which measures the efficiency with which productive factors are used, has been notably meagre in Spain. Indeed, TFP posted negative growth rates for much of the 2000s. In Spain, it has averaged growth over the past 20 years of approximately 0.2%, 0.2 pp less than the euro area average, according to European Commission estimates. 10/18  Such poor productivity has a cost in terms of wealth. A simple calculation helps illustrate the fact that, if Spanish TFP had performed like that of the euro area, income per employee would today in Spain be almost 90% of the euro area average, as opposed to its current level of 83%. The latest economic literature stresses the role of business dynamism in productivity. Specifically, innovative business start-ups and the destruction of relatively unproductive firms are at the root of productivity gains. On Eurostat data, the pattern of business start-ups in Spain prior to the crisis was relatively similar to other advanced economies, and the destruction of firms somewhat lower. Yet during the crisis the rate of business start-ups underwent a sharper fall than that observed in other economies, while destruction increased, being concentrated moreover in the least productive companies. Since 2013 the business sector has proven somewhat more dynamic.

This would indicate that at 4/18  least some of the correction of the external adjustment is of a structural nature, and associated with the aforementioned cumulative gains in competitiveness and with the increased geographical diversification of exports and of the number of firms selling their products regularly to the rest of the world. Also worthy of mention is the notable deleveraging by the non-financial private sector, at a very advanced stage in the case both of non-financial corporations and of households. In the case of non-financial corporations, for example, the debt-to-GDP ratio, after falling more than 40 percentage points (pp) from its peak, stands below the average for euro area firms. Significantly, too, there has been intense recapitalisation and restructuring in the banking sector. Yet as I shall explain, the sector continues to face a very complex environment demanding high adaptability. Under the projected baseline scenario for growth of the Spanish economy, however, the Banco de España expects a gradual slowdown in the rate of change of GDP to figures more closely in line with its potential growth. On our estimates, that would be around 1.5%. This gradual easing in growth reflects the progressive exhaustion of some of the abovementioned factors, such as the expansionary demand policies and, in particular, monetary policy. This scenario of gradual deceleration is, moreover, part of a complex and uncertain global context. Here there are doubts about the intensity and the pace of growth in the global economy, in particular the euro area, which is Spain’s main export market.
And quite often, training fee has been quoted as one of the key pain points. It is against this background that the Financial Secretary has announced the launch of the Pilot Scheme on Training Subsidy for Fintech Practitioners, and the Pilot Green and Sustainable Finance Capacity Building Support Scheme in his Budget Speech earlier this year. The HKMA is now working closely with the Financial Services and the Treasury Bureau on the implementation details. And we aim to launch these two schemes in the second half of this year. 20. We also recognise that talent development efforts can only be effective if they are targeted at the most pressing needs faced by the industry. Earlier this year, we embarked upon the Skills Transformation and Empowerment Programme (or in short, the “STEP”). Under this Programme, we seek to discuss with banks their strategy and action plans to address their future talent needs, focusing on future upskilling and reskilling needs. And through those discussions and explorations, we will provide further guidance to the industry by sharing key observations and good practices on talent development. 21. Now turning to nurturing young talent. Of course we need a sustainable pipeline of young talent to inject fresh impetus into the industry. However, when we talked to HR management of banks over the past two years or so, they often cited that it’s not easy to attract new talent these days. There appears to be a general misconception about the banking industry among the younger generation.

 Third, we will have to look more closely at the economic activity and the cycle. In this tightening phase, unlike the phase of normalisation, the assessment of the state of the economy and projections for growth and employment will play a greater role. In case of a recession – even if it should be limited and temporary 8  Page 9 sur 14  -, we would be certain to face calls to stop the tightening. This would miss the point: to bring inflation back to target, a recession is neither necessary nor sufficient per se. A more relevant discussion will be the assessment of the slope of the Phillips curves. The current and rapid increase in core inflation has led some observers to suggest that the flat Phillips curve paradigm of past decades is now obsoletev. What is more likely is that price-setting in the economy is state dependent, with firms reacting by more and quicker to large shocks so that the Phillips curve is non-linear and convex. In any case, we cannot bet that a steeper Phillips curve will entirely do the job, allowing for a fairly “immaculate” disinflation.  Last but not least, we will need a benchmark to measure the degree of tightening. The real interest rate calculated with actual headline inflation would provide misleading signals. A better gauge is provided by medium-term forward real interest rates: they should be at least positive on all but the shortest maturities.