samchain/econo-pairs-v1 huggingface dataset:
foods Core services  9  12 6 9 3  6 3  0  0  -3 15 16 17 18 19 20 21 22  15 16 17 18 19 20 21 22  (1) Dashed vertical line indicates statistical cutoff date for June 2022 MP Report. (2) For details on the different groupings and their share in the total CPI basket, see box IV.1 in December 2019 MP Report, Carlomagno and Sansone (2019), and Economic Glossary. Sources: Central Bank of Chile and National Statistics Institute (INE). 10  Figure 2 Surveyed inflation expectations (annual change, percent) One year out (1) (2)  12  Two years out (1) (2)  10  Financial traders (FTS) Economists (EES) Firms (EDEP)  10  Financial traders (FTS) Economists (EES) Firms (EDEP)  8  8 6 6 4 4 2  2  0  0 17  18  19  20  21  17  22  18  19  20  21  22  (1) Median responses. (2) FTS considers survey for first two weeks of each month through January 2018. From February 2018 onwards, it uses the latest survey published in the month, including the one prior to the September 2022 Meeting. In the months in which no survey is published, the latest available survey is used. Source: Central Bank of Chile.

This year will close at 12%, that is, nearly 2 percentage points above the June forecast. Cumulative surprises in volatile prices and the recent depreciation of the peso explain much of this correction. By 2023, on average, projected inflation is about 1 pp higher than in June, reflecting an RER standing between 3% and 4% above its second-quarter average. In addition, it is assumed that it will remain at these more depreciated levels throughout the projection horizon, ending the period above its 15- to 20-year averages. At the same time, the projection considers an increase in second-round and indexation effects, reflecting the higher persistence of inflation. Current levels and the expected evolution of the exchange rate are important factors behind the correction of our inflation outlook over the policy horizon, which more than compensates for the drop in the world prices of fuels, foods, and other commodities. The central scenario assumes that inflation will converge to the 3% target within the twoyear monetary policy horizon. In this projection, annual CPI inflation will end 2023 at around 3.5%, reaching 3% by the third quarter of 2024. Core inflation will see a slower convergence towards 3%, as a result of the strong persistence already noted and a higher RER (figure 11). This stubborn inflation persistence calls for a more contractionary monetary policy —in both nominal and real terms— than foreseen in June, as is summarized in the new MPR corridor in this Report.
Or has the major long-term and painful correction of the imbalances in the U.S. economy now begun in earnest? After some months of unpredictable data, even the most experienced and qualified observers find it difficult to say anything definite. So let me outline three conceivable paths — one optimistic, another less so, a third pessimistic — and then discuss them. Three scenarios The optimistic scenario — the V The alternative most observers, particularly in the United States, believe in just now is that the fall in the United States is an unpleasant but innocuous ‘air pocket’ in the flight path of the American economy’s soft-landing to lower growth rates. The air pocket is attributed to a temporary output surplus, so that unduly large stocks and rather too much IT investment have to be adjusted downwards during one or, at most, two quarters. The profile of this development is commonly described as a capital V; consumption and investment slacken initially and then pick up again, bringing growth back up to its presumed potential rate of around 3 to 4 per cent. Underlying this version is the recent years’ exceptional technology-driven improvement in productivity, which helps to inject new life into the optimistic mood. The concern generated by the correction is brushed away by the active monetary policy and the promise of massive tax cuts in the coming years. The optimists set great store by IT’s impact on growth and productivity, as well as by a quick improvement in expected profits.

Investment was still able to reach record levels because the additional capital could be borrowed from investors abroad who willingly placed their money in U.S. securities in the expectation that the good times would continue. That explains why the U.S. current account has been able to run up a gigantic deficit, currently equivalent to almost 5 per cent of GDP, at the same time as the dollar has appreciated strongly. Even with rapidly rising productivity, the rate of economic growth became incompatible with long-term stability. In order to dampen activity, the Federal Reserve started to apply the brakes in summer 1999, raising the instrumental rate in a series of steps, totalling 1.75 percentage points, to 6.5 per cent. The setbacks were not long in coming. Last year the value of the Nasdaq exchange was virtually halved. Profit warnings have been pouring in, firms are shedding labour, banks have tightened their lending, consumer confidence is weakening and unemployment is tending to rise. Manufacturing output has virtually stopped growing. In the course of a month the Federal Reserve has lowered the interest rate 1 percentage point to 5.5 per cent and market agents are counting on further cuts this spring. We now have to consider what is actually happening. Is this just a temporary correction after a period of undue optimism that has led, for example, to surplus investment and will now be followed by a fairly mild and gradual slowdown?
(1997), “Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets”, European Economic Review 41, 1111–1146. Svensson, Lars E.O. (1999), “Inflation Targeting: Some Extensions”, Scandinavian Journal of Economics 101, 337–361. Svensson, Lars E.O. (2003), “Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others”, Journal of Economic Perspectives 17(4), 145–166. Svensson, Lars E.O. (2005), “Monetary Policy with Judgment: Forecast Targeting”, International Journal of Central Banking 1(1), 1–54. Svensson, Lars E.O. (2009a), “Evaluating Monetary Policy”, in Koenig, Evan, and Robert Leeson, eds., From the Great Moderation to the Great Deviation: A Round-Trip Journey Based on the Work of John B. Taylor, forthcoming, www.larseosvensson.net. 8  BIS Review 16/2010  Svensson, Lars E.O. (2009b), “Flexible Inflation Targeting: Lessons from the Financial Crisis”, speech on September 21, 2009, www.riksbank.se. Taylor, John B. (2007), “Housing and Monetary Policy”, in Housing, Housing Finance, and Monetary Policy, Federal Reserve Bank of Kansas City Jackson Hole Symposium, 463–476. Walsh, Carl E. (2009), “Using Monetary Policy to Stabilize Economic Activity”, in Financial Stability and Macroeconomic Policy, Federal Reserve Bank of Kansas City Jackson Hole Symposium. White, William R. (2006), “Is Price Stability Enough?”, BIS Working Paper No. 205, www.bis.org. Woodford, Michael (2007a), “The Case for Forecast Targeting as a Monetary Policy Strategy”, Journal of Economic Perspectives, Fall 2007. Woodford, Michael (2007a), “The Case for Forecast Targeting as a Monetary Policy Strategy”, Journal of Economic Perspectives, Fall 2007.

Thomas Jordan: Sound money – a fundamental pillar of our society Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Ustertag, Uster, 23 November 2014. *  *  *  The speaker would like to thank Peter Kuster for his support in preparing this speech. He is also indebted to Patrick Halbeisen, Rita Kobel, Thomas Moser and the SNB Language Services. Introduction It is a great honour for me to speak to you today from this lofty pulpit. Admittedly, as a central banker I cannot contribute a great deal to your spiritual well-being. I will therefore limit myself to my true area of competence and talk about money. Let me begin by explaining why I am particularly delighted to be addressing you today, as your guest speaker. As you know, the Ustertag of 1830 was a major milestone on the long road towards the creation of the Swiss federal state. Just 18 years later, modern Switzerland was born. And only two years after that, the Swiss franc was introduced as the currency of the Confederation – although, in the initial stages, the federal state had to be content with coinage sovereignty alone. Not until 1907 did a central bank equipped with the exclusive right to issue banknotes begin operations. This was the Swiss National Bank (SNB). So you see, important developments were set in motion by the Ustertag, including changes that would affect our monetary system.
An illustration of this can be found for instance in the Memorandum of Understanding on high-level principles of co-operation in crisis management situations that have been agreed on, in March 2003, between the EU banking supervisory authorities and central banks. Third, because banking supervision ultimately ends up into the surveillance of individual institutions, supervision at the national level and the role of domestic supervisors remain strategic. The specificity of this domain calls for the preservation of two major principles: the participation of supervisors and central banks to the drafting of regulation on the one hand, the permanent improvement of an efficient decentralised and highly co-operative supervisory approach on the other hand. Again, Memoranda of Understanding (MOU) currently organise the bilateral exchange of supervisory information, for instance covering the special information needs in case of financial troubles. 2.3 Second, I would like to focus on the necessary restoration of public confidence in financial markets. Over the past year, in both the United States and Europe, reforms have been undertaken in the area of corporate governance and financial disclosure with a view to restoring investor confidence in listed companies. These legal and regulatory reforms mainly concerns three areas: External and internal audit, financial transparency.

This will lower compliance costs for financial institutions, arising from having to satisfy different regulatory and legal regimes in different countries. Unfortunately such harmonisation is extremely difficult, even if we confine ourselves to a small subset of countries. The issues are far too intricate and complex to be resolved in a multilateral setting. Institutional structures, market practices and philosophical approaches differ from country to country. And each country guards its regulatory powers jealously, and wants the freedom to set and enforce its own rules. The multiple national regulators that exist in the European Union are a good example. Short of complete harmonisation of regulations, one practical approach to pursue is mutual recognition of regulatory regimes. Mutual recognition need not be all or nothing. It can be applied to specific areas, starting from cross-border offerings of financial products such as collective investment schemes and suitable initial public offerings. Institutions can save half or more of their compliance costs, if they only have to comply with one set of regulations recognised by both regulators. This benefits both markets by deepening liquidity and broadening product offerings. Singapore has participated actively in international efforts to harmonise regulations and policies across jurisdictions. As a small country, our ability to push the envelope on regulatory practices is limited. But we have conscientiously kept abreast of global regulatory initiatives, and adopted the best international standards and practices for regulating and supervising our financial institutions and capital markets, taking into account the specific circumstances of our financial industry.
Outbreaks in Vietnam, an important producer of consumer durables for the US market, led to a significant tightening of restrictions throughout the summer. These were ended in early October, but have had knock-on effects on delivery times and shipping demand since then. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  particularly those from East Asia to Europe and North America. For example, despite new shipping capacity coming on stream, door-to-door delivery times on the China-US route have continued to lengthen through the autumn (Chart 10). However, I still think it’s more likely than not – looking a couple of years ahead as we should – that these pressures on traded goods prices are more likely to subside than intensify. Through the autumn there have been signs that some countries in the pacific region are abandoning “zero-covid” policies, or at least pursuing them less stringently6. (Obviously the new Omicron variant might interrupt that process, depending on the effectiveness of existing vaccines against it and the severity of its health effects. Those we don’t yet know.) The easing in US fiscal policy is past its peak and the impetus it’s provided to US durables demand has therefore started to decline. There is probably still significant pent-up demand for cars and, as and when constraints on auto production are overcome, we can expect that spending to pick up again.

If (for example) the NAIRU goes up (temporarily) but the underlying “natural rate” of unemployment that maximises economic welfare, and that is relevant for the MPC’s secondary objective, does not, then inflation might rise for a bit but the welfare-relevant output gap wouldn’t, and could even widen. And I’ve argued that such a deterioration is part of the story here. However, I don’t think it’s the whole story: I think the strength of labour demand (including from the public sector) is also playing a part in reducing slack in the labour market. It’s also possible that the rise in the NAIRU will last longer than we think (and that it amounts to a rise in the longer-run natural rate as well). I touched on the question of potential trade-offs in the labour market in a talk some years ago (“Unemployment and the conduct of monetary policy in the UK”). The canonical academic reference is Blanchard and Gali (2007), ‘Real wage rigidities and the New Keynesian model’, Journal of Money, Credit, and Banking. 11  16  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  16
One such reason is the central bank’s responsibility for the stability of the financial system. If asset prices have been driven up to unsustainable levels that do not correspond to the underlying fundamentals, we are faced with a special kind of problem. We know from experience that speculative asset price bubbles eventually burst. When they do, collateral values will fall and balance sheets deteriorate, potentially threatening the stability of the banking system. To avoid this kind of development, the central bank needs to closely monitor the potential for excessive credit growth and the possibility of asset price bubbles building up. It seems that historically the forming of speculative price bubbles has been closely linked to an excessive expansion of credit. But we need to operationalise both the concept “excessive” and the difficult concept of an asset’s “fundamental value”. As history has shown us, judging to what extent rising asset prices reflect strong fundamentals, rather than the “irrational exuberance” of investors, is easier said than done. How does a speculative asset price bubble get started and how do we spot it? And if we spot it, what do we do about it? In most countries the risks associated with a property price bubble would probably be considered to be greater than in the case of an equity price bubble. This is because in most countries banks are more exposed to risks in the property market, since real estate is used as collateral for a considerable amount of bank loans.

An important aspect of the recent developments to strengthen Islamic financial services industry is that this is being undertaken during the stable and good times. This will position Islamic finance to deal with future challenges. A clear indication of that is the growing relevance and importance of the sukuk market. This event in Kuala Lumpur is commemorating the talent, expertise and the successes of the Islamic financial community. BIS Review 95/2010  3
We expect that the rate at which the prices in Bulgaria will be rising in 2022 will reach its peak, on an annual basis, within the first half of the year, and at the end of the year, again on an annual basis, it will fall below that reported as of December 2021. The concrete nominal levels of the general price index will depend on the combined effect of the antiinflationary and pro-inflationary factors, including on the dynamics of the energy prices in the international market and the prices of foodstuffs. We believe that the coming discussions on the adoption of the 2022 budget will give additional indications of the development of the macroeconomic processes in Bulgaria. In this regard, the topics important for the banking sector are: the annual and medium-term macroeconomic framework; the level and management of the debt; the incomes policy; and the level and management of the so-called ‘contingent liabilities’ in the energy, transport and social security sectors. In the context of the ongoing global and local macroeconomic processes and the still open issues, in 2022 the banking sector will have to find a balance between the possibilities of expanding the lending, as a result of the anticipated improvement in the economic environment, and the areas of economic uncertainty coming mainly from the evolution of inflation and the still unresolved risks caused by the pandemic. A major criterion for reaching an optimum balance for each bank will be the preservation of, and even improvement in, the quality of assets.

For its part, the BNB is ready, as it has been thus far, to implement the full range of measures, within its mandate, to mitigate and neutralise the manifestation of risks in relation to banks. The overarching objective of these measures is to preserve and further strengthen the capital reserves and the high loss-absorbing capacity of banks against potential deterioration in their loan portfolios and to ensure that the stability of the system is maintained, including in the event of less favourable than expected exogenous economic and financial developments. 2/3  BIS central bankers' speeches  In 2021, the BNB twice increased the level of the countercyclical capital buffer to reach 1.5% and confirmed the level of the systemic risk buffer at 3%. The BNB will continue to require banks to maintain adequate capital buffers against potential losses arising from the realisation of cyclical systemic risk. This risk currently arises mainly from active residential lending to households, as well as lending secured by commercial real estate. At this stage, the focus will continue to be on the implementation of macroprudential measures targeting banks’ capital, but the BNB stands ready to implement additional measures, if necessary, including borrower-based. More strategically, the BNB has already mobilised serious efforts in the project for the adoption of the euro in Bulgaria. The tasks on the way to achieving this goal go beyond the banking sector, but will also strongly involve the banks.
The efforts of the city and the state, starting in the mid-1980s, to redevelop the Theatre District and Times Square area played an important role in revitalizing tourism. But, of course, the city’s well-deserved reputation for culture and arts goes well beyond Broadway—to the hundreds of Off-Broadway and neighborhood theaters, museums, music venues and organizations like yours. Supporting this cultural infrastructure is important to maintaining a vibrant economy and a bright future. The experience of New York City, which has gone from crisis to vibrancy, shows that the past need not be prologue for the future. It also shows that a well-managed regime of fiscal control can help begin the process for future recovery. Other cities and regions are at different points in this journey. Puerto Rico, for example, which has been in recession for many years and which defaulted on its debt obligations earlier this year, is at a particularly critical juncture. On the positive side, the fact that Congress has enacted legislation, the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, does provide a way forward. The prospect for good fiscal stewardship has improved and this is an essential first step in the Island’s recovery. As I have noted elsewhere, there are significant opportunities for action that can leverage the Island’s strengths to foster economic growth. These include its bilingual adult population, an open economy occupying a central position in the Caribbean, wide experience as host to international corporations and close economic ties to the U.S. mainland.

However, much as New York City took time to recover, so too will it take time for Puerto Rico to recover from its crisis of the last decade. The future of Puerto Rico is yet to be determined. However, the experience of New York City suggests that a turnaround is possible even when underlying conditions appear dire. New York City is a compelling example of what is possible when you leverage your citizens’ ingenuity and capacity for reinvention. It shows what can be achieved with the appropriate discipline and effort. Thank you for your kind attention. 1 Jason Bram, Andrew Haughwout, Joseph Tracy and Luis Uranga assisted in preparing these remarks. 2 Raj Chetty, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. “Where is the Land of Opportunity? The  Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics, Vol. 129, No. 4, 2014. 5/5  BIS central bankers' speeches