samchain/econo-pairs-v1 huggingface dataset:
The domestic risk factors stem largely from the very prolongation of a long, domestic demand-led expansionary phase, and can be grouped in two major areas. First, the losses in competitiveness that have built up in the earlier described setting of inflation differentials and very low productivity gains, which might ultimately check the generation of value added and job creation. And second, the increase in household debt that has accompanied the expansion of consumption and residential investment, which might constrain households’ spending capacity, particularly if developments in the housing markets were to prompt any uncertainty about the value of this sector’s wealth, which is strongly concentrated in real-estate assets. Although both areas of risk are inter-related, I shall deal with each separately. In respect of competitiveness, there are signs that the risks signalled by the Banco de España in the past have already begun to materialise. The significant restraint on growth exerted by external demand in the past year and the considerable widening of the Spanish economy’s external deficit point in this direction. Admittedly, these results partly reflect the influence of certain external factors, such as dearer oil and the appreciation of the euro, which have dampened the positive impact of the international recovery. Moreover, the deficit is also partly influenced by the cyclical divergences between Spain and the euro area.

Let me start by saying that New Jersey is well-positioned to prosper. New Jersey is the 11th largest state – with a population of 8.8 million and this population is well-educated. Roughly 35 percent of adults over 24 years old have a college degree, well over the national average. Here in Morris County, that figure is almost 2  BIS central bankers’ speeches  50 percent. The state is also quite ethnically diverse: roughly 20 percent of New Jersey residents were born abroad. The state’s economy is industrially diverse, resembling the nation. New Jersey employs many people in healthcare, professional and business services, wholesale and retail trade, and leisure and hospitality. In the northern part of the state, we see a disproportionate share of jobs in a few industries: finance, particularly in Hudson County; goods distribution, related to the ports, rail lines and trucking and warehousing activities that are prominent here; pharmaceuticals manufacturing and R&D; and private education. The area obviously benefits from its important links to New York City. In particular, many residents of this area, including myself, commute each day to the city. So how is the recovery proceeding here? Based on the New York Fed’s indices, economic activity in the state did not begin to recover until November 2010, more than a year after the nation and New York City. Since then, activity has recovered at a moderate pace, although we are still operating below our previous peak. Employment in New Jersey declined substantially during the downturn. Our employers cut about 250,000 jobs.
Indeed, the FOMC discussed this issue at great length (see the minutes of our January 2011 meeting).4 However, I have yet to see empirical evidence based on a modeling framework that successfully captures U.S. business cycle dynamics that shows such supply-side structural factors can come close to explaining the huge shortfalls in actual GDP from trend and the high level of unemployment. For example, extended unemployment insurance and increased difficulties in matching workers to vacant jobs may have resulted in a transitory increase in the natural rate of unemployment, but the analysis I’ve seen doesn’t get you close to the 9 percent rate we currently are experiencing. The policy loss function The macroeconomics literature often describes the policymaker’s problem as one of minimizing societal costs of bad outcomes – which it mathematically approximates by the sum of the squared deviations in inflation from its target and the unemployment rate from its so-called natural rate. It turns out that a conservative and tough-minded central banker should value these deviations about equally.5 Accordingly, an inflation rate of 5 percent against an inflation goal of 2 percent is the same sized loss as an unemployment rate of 9 percent against a conservative estimate of 6 percent for the natural rate of unemployment. Today, we are facing an unemployment rate of 9 percent with little prospect of meaningful declines soon and the medium-term outlook for inflation is under 2 percent. This policy framework is often described as flexible inflation targeting.

Our assessment is that the probability of this type of scenario is small at present, but that if it were to occur, the negative effects on the economy would be substantial. Given our inflation forecast and after taking into account other factors, the Executive Board’s assessment is that it is reasonable to continue gradually raising the interest rate. At the same time, it is important to emphasise that we are easing up on the accelerator, not putting on the brakes. Monetary policy is still expansionary, which is clear from a historical comparison of repo rate levels (diagram 4). Even in an international comparison, it is clear that Sweden’s key rate is still very low. The link between interest rate decisions, house prices and household debts There have recently been claims that the Riksbank’s decision to raise the repo rate was largely because we have been concerned over house prices and increased household indebtedness. This is not the case. I would like to argue that the decisions to raise the interest rate now and in January are primarily justified on the traditional basis of inflation prospects two years ahead. Inflation has been assessed as being close to the target level a couple of years ahead, given gradual increases in the repo rate. We have therefore chosen to raise the repo rate. Our monetary policy considerations have of course taken into account considerations related to risks linked with house prices and the build-up of household debt. House prices affect demand through households' decisions regarding saving and consumption.
BIS estimates that the average daily MYR forwards traded offshore is 4 times the amount onshore. This should not be the case as MYR is not an internationalized currency, and that all forwards should be backed by firm trade transactions. Given the sizeable volume and the opaque nature of such markets, I cannot help but ask: “What are we missing here? Who are the players in the ND markets? Are they hedging or speculating? “ Is it the lack of capacity of our local players to serve certain players? Or is it that the local regulatory and operating environment needs to be adjusted? These gaps should be identified and remedies formulated as the offshore market represents a loss of business opportunity for the onshore players. Fundamentally since the transactions are related to Ringgit, its activities should be captured onshore and transacted through the onshore market players. Ringgit exchange rate should be determined by onshore players, reflecting the underlying demand and supply of foreign currencies in the economy. It should not be dictated by any market other than Kuala Lumpur. Expectation and direction going forward As 2015 draws to a close, let us not allow the increasing challenges to stop us from advancing forward. Volatility is not likely to go away any time soon. It would be the norm. A new normal. Let us persevere, learn from the past and as a group forge ahead into the future. It is appropriate to have a retrospective here.

The thinking behind this division is that measures of this kind require comprehensive economic analyses, with which we are familiar. An excellent example of a cyclical measure is the countercyclical capital buffer. The Federal Council decides on the activation of this tool at the request of the SNB. In the designation of systemically important banks and functions, the SNB also has a comparative advantage because its approach is geared to the financial system as a whole. Although powers and responsibility for specific macroprudential measures are clearly allocated to one authority, overlapping and mutual dependencies can always occur. Consequently, it is very useful for the institutions to work together closely and engage in a certain amount of coordination. That is why the Swiss authorities have clearly specified how they will differentiate their tasks and work together. From a purely theoretical point of view, a strategy where one institution bears sole responsibility for financial stability might be more appealing. However, experience from the financial crisis does not provide any evidence that the one-authority-for-all model is superior – in systematic terms – to other organisational forms. On the contrary. In this country, the UBS case clearly showed that it is very possible, in an emergency situation, to carefully and discretely draw up a bundle of comprehensive measures in support of financial stability, and to implement these in good time, even where various institutions are involved.
Philipp M Hildebrand: Open world - Switzerland open to the world Summary of a speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Swiss Economic Forum, Thun, 7 May 2004. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Globalisation - the worldwide exchange of production factors, goods, technologies and ideas - is a process that has evolved in different ways and degrees ever since humankind can remember. Technological progress is the actual driving force behind globalisation. It thus becomes possible to reduce costs through increasing specialisation and the best use of comparative advantages. The process of globalisation, however, is restricted to some extent by national and international legal frameworks. Despite overall positive and widespread net effects, globalisation is, however, frequently not accepted due to adjustment costs arising for certain global players. With its successful export sector and its comparatively attractive local conditions, particularly the excellent infrastructure and the flexible labour market, Switzerland has the potential to benefit from the continuing globalisation in future as well. A necessary condition for this, however, is a rise in productivity and, as a result, enhanced competitiveness of the domestic sector. With international competitive pressure intensifying, insulating itself or merely adhering to the status quo are no options for Switzerland in the long term. This would lead to considerable losses in social security and growth and threaten the long-term survival of the country’s social institutions.

This may result in higher margins. A tighter labour market may lead to higher wage growth. In addition, the increase in energy and commodity prices is pushing up producer costs at home and abroad. Although the Bank in principle neither found it desirable nor anticipated that inflation was as low as it actually has been, we have deliberately accepted an inflation rate that is below target for a period. In a period of increased cross-border labour flows, substantial technological advances, changes in competitive conditions and new trading patterns, we may, with our very open economy, have to accept a somewhat greater variability in inflation and deviations from the target, as we have witnessed over the past two to three years. This leads me to how monetary policy should be assessed. Section 1 of the Regulation on Monetary Policy states: •  "Norges Bank’s operational conduct of monetary policy shall... be oriented towards low and stable inflation. The operational objective of monetary policy is annual consumer price inflation of approximately 2.5 per cent over time. •  In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances shall not be taken into account." A reasonable interpretation of the regulation is that when we look ahead, the interest rate should be set with a view to reaching the inflation target of 2.5 per cent within a reasonable, but flexible, time horizon.
Like a number of other central banks, we in the Hong Kong Monetary Authority have taken a number of initiatives in this direction in Hong Kong in recent years. We now have a fairly liquid bond market with a sophisticated but user-friendly market infrastructure. We have also taken initiatives in the regional dimension to promote the networking of Asian bond markets through encouraging bilateral linkages of debt clearing systems. BIS Review 55/1997  -2-  7. It is hoped that these efforts could help the expansion of the role of the Asian bond markets and hence facilitate more effective financial intermediation in the domestic, regional and global context. The region’s investment needs over the next decades are huge. The World Bank has estimated that private gross domestic fixed investment will amount to a total of $ 5 trillion over the ten years to the year 2004, a large part of it associated with infrastructural development1. The share of bonds in financing these needs is projected to grow from only 9% to 26% by 2004. 8. I hope this can be realized for this would enable the banks’ role in Asia to consolidate into more prudent proportions at least in the eyes of the regulators. It would help to achieve a more diversified and therefore a more stable framework for financial intermediation. Indeed, on the World Bank’s projections, the share of bank borrowing is expected to decline commensurately from 40% to 30% over the same period. 9.

It is in this context where the topic of this year’s conference falls right into the core business of central banks: understanding inflation dynamics, and how they influence monetary policymaking. 1  Central Bank of Chile October 2018  Indeed, throughout the post crisis period we have observed a puzzling behavior of inflation in many developed countries, as standard Phillips curve approaches have done a rather poor job predicting price pressures. During this period, the unemployment rate has reached historically low levels, but inflation has remained low. Economists have referred to a “twin puzzle” in inflation dynamics and several explanations with different policy implications have been put forward. Some have pointed to the existence of “hysteresis” as causing a drop in potential output and, consequently, smaller gaps in the economy after the crisis. Others argue that the weakening of the relationship between activity and inflation responds to structural changes, like globalization forces pulling wages down, or technological innovation prompting changes in industrial organization. Another alternative, a sort of “catch 22” for central bankers, is that the flattening of the Phillips curve may be the consequence of the success of central banks in targeting inflation. Measurement issues should not be ruled out either. Measuring a common movement of prices throughout the economy has never been a straightforward task, but this may be getting harder as standardized goods take a smaller and smaller share of household consumption compared to services and to goods that are subject to fast change.
Denis Beau: New technologies and monetary policy frameworks Opening remarks by Mr Denis Beau, First Deputy Governor of the Bank of France, at the International Monetary Fund (IMF) / Reinventing Bretton Woods Committee (RBW C) Seminar on “New Technologies, Financial Inclusion and Monetary Policy in CCA Countries”, Session 3: New technologies and monetary policy frameworks, 12 July 2021. * * * From its monetary and financial stability mandate perspective, the Banque de France pays a lot of attention to innovations that may alter the functioning of the real economy and the financial system, in particular digital technologies. This is exemplified by multiple experiments involving public and private institutions we launched since 2020. Through these experiments, the Banque de France is notably showing its commitment to reconsider, if necessary, the way it makes available central bank money for settlement and payment processes, to support with the provision of central bank money in digital form, the spread of new technologies and to help address the challenges those technologies raise for the fulfillment of our monetary and financial stability mandate. But the issuance of a CBDC is only an aspect of the policy responses that are to be considered given the risks and opportunities brought by digital technologies.

Exploring the issuance of CBDC in order to be ready to launch a CBDC, if necessary The third response is to be ready to launch a Central Bank Digital Currency (CBDC) , which means a digital form of central bank money, possibly for both the public and the financial sector. This response would help reassert the anchoring role of central bank money in both the retail and wholesale settlement and payment space, if needed in complement to what can be achieved with the regulatory and market response. This might prove useful for instance to address challenges coming from the introduction of CBDC by other countries. Central banks are actively exploring its potential. This is notably the case of the Banque de France. We have successfully carried out since 2020 seven experimentations on wholesale CBDC – and we will carry out two more by the end of this year, with private and public actors alike, covering a wide range of use cases (DvP and PvP), including cross-border transactions. Let me point out that a CBDC should be designed in our view in a way it is distributed by intermediaries, to allow the banking sector to keep a key role in the monetary policy transmission. C. Possible impacts of a CBDC on monetary policy implementation: preliminary thoughts When decided and depending of course on the specifics of the project launched in the concerned jurisdictions, a CBDC could have several consequences on monetary policy implementation.
11 This outcome would be undesirable for us, as we aim to steer secured short-term Swiss franc money market rates so that they remain close to the SNB policy rate. By reducing the stock of excess reserves, we also reduce the supply of reserves in the interbank money market. This lets us steer money market rates closer to our policy rate of 0.5%. That is precisely what the second element of our implementation approach accomplishes. To absorb excess reserves, we use open market operations. Specifically, we use term repos and SNB Bills, the latter being marketable debt claims on the SNB. 12 Term repos have a term of one week and are auctioned daily. SNB Bills, on the other hand, are auctioned on a weekly basis and with different terms from week to week. As Slide 8 shows, the effect of these operations is to replace the light-blue shaded rectangle with a light-green one. Our reserve-absorbing operations are offered with interest rates that are close to 0.5% on an overnight-equivalent basis. 13 This makes them particularly attractive to banks that hold excess reserves. By purchasing the instruments we offer, these banks can reduce the stock of excess reserves, which would otherwise be remunerated at 0%. It is important to emphasise that both interbank trading and the SNB’s reserve-absorbing operations are mechanisms for reducing the stock of excess reserves, possibly to the point where all excess reserves have been ‘soaked up’. How does the SNB’s approach determine money market rates?

Indeed, SARON never fell below the rates we set for the fine-tuning operations of first 0.35% and, 3 days later, 0.38%. Starting on the day of the monetary policy assessment, we also commenced auctions of term repos and SNB Bills. As you can see from Slide 12, we absorbed a sizeable volume of reserves via overnight repos in the first few days after the rate hike. During this initial period, the volume of overnight repo transactions peaked at around 36 billion Swiss francs. The market’s take-up of our term repos and SNB Bills auctions was very strong from the outset, and it continues to be strong. As shown on the slide, by the end of October, the combined stock of repo transactions and SNB Bills used to absorb excess reserves was close to 140 billion Swiss francs. The absorption of reserves was achieved in roughly equal parts by term repos and SNB Bills. We saw substantial demand for SNB Bills right from the very first auction, on 22 September, and demand has increased even further since then. At present, demand is concentrated in SNB Bills with the shortest term of 28 days. As one can see on Slide 13, as of the end of October, the total stock of outstanding SNB Bills stood at almost 70 billion Swiss francs. Of this, SNB Bills with 28-day terms accounted for around 50 billion Swiss francs, or roughly 70% of the total outstanding stock. SNB Bills, as money market debt register claims, are tradeable securities.
Pasricha (2017) shows that policymakers use capital inflows tightening for macroprudential concerns, while use capital outflows easing for competitive purposes. In Chile, the dynamic of outflows easing reflect mainly that Pension Funds’ limits on investing overseas have loosen. Nonetheless, Chile is among those EMEs that are less active when it comes to capital control actions over the past decades. The challenge, however, still remains in terms of addressing the actual level of capital account openness rather than it’s tighten/loosen evolution. Page 4 of 12  Central Bank of Chile September 2019 High-level Policy Seminar on Integration or Fragmentation? International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  Pasricha et al. (2015)  Indices of capital controls policy for Chile and other EMEs Pasricha et al.

More conservative fiscal policy would have done what monetary policy could not accomplish; namely, to cool down the overheated economy. Ladies and Gentlemen, These lessons have been expensive ones. Thailand, as a nation, has spent the last five years dealing with the problem with some severe hardship and grave consequences. Although it is probably safe to say that the height of the problems is now behind us, we still face an enormous uphill battle. A new set of challenges seems to emerge everyday, some with very important repercussions on the Thai economy. Here, what spring to my mind are the delay in the global economic recovery and China’s WTO entry already mentioned, as well as the current global equity slump. This is just to name a few. To prepare Thailand for these future challenges, we need to get the fundamentals right on all of the four areas that I have just discussed. In brief, we need to raise productivity in the real sector, rebuild our financial infrastructure, instill the value of good governance in both the private and public sectors, and develop a comprehensive macroeconomic strategy. Needless to say, comprehensive real sector reform is at the core of the new paradigm for sustainable growth. And this requires a carefully planned national agenda. In essence, Thailand needs to  BIS Review 62/2002  3  distinguish itself quickly in the fast-evolving global competitive landscape.