samchain/econo-pairs-v1 huggingface dataset:
...even though advanced-economy output is barely higher than a couple of years ago  Per cent  Level relative to 2019 Q4, per cent  6  4 0  5 -4  4 3  -8  2  -12  1  UK GDP (output estimate)  0  -16  UK market sector output  -1  World GDP  -20  -2 -3  -24  97 99 01 03 05 07 09 11 13 15 17 19 21  2016  2017  2018  2019  2020  2021  Twelve-month CPI inflation. Includes November flash estimate of Euro Area inflation. Sources: Eurostat, ONS, Refinitiv Eikon from LSEG, US Bureau of Economic Analysis and Bank calculations. World GDP is constructed using GDP data of 188 countries weighted according to their shares in UK exports. UK market sector output is real market sector gross value added. Sources: IMF World Economic Outlook (WEO), ONS, Refinitiv Eikon from LSEG and Bank calculations. This pattern – levels of output that are still relatively subdued but rapid and skewed price rises – has been evident for some time. Qualitatively, at least, nor has there been any change in the best explanation we have for it. Inflation in global goods prices looks to be the result of a big shift in global consumer demand, induced by the pandemic, away from services and towards goods. Even at the best of times it would have been hard for the supply sides of our economies to adapt to this.

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.
Fourth, consequently, the reserve ratio for commercial banks has to be raised successively, now standing at a historical high of 13.5% of deposits. There is of course a cost involved for commercial banks in holding reserves with the central bank earning fairly low interest, with implications for the profitability of the banks and the efficiency of the banking system in financial intermediation. Fifth, concurrently, the central bank also has to issue vast amounts of central bank paper to sterilise that part of the renminbi monetary base injected into the banking system as a result of the continuing purchase of foreign reserves. This also represents a cost to the central bank, if the foreign reserves, after adjusting for exchange rate appreciation of the domestic currency, earn an investment return less than the interest rate paid on the central bank paper issued. Sixth, notwithstanding the efforts to sterilise monetary injections, inflation has been on the rise, reflecting economic buoyancy and imbalances in individual commodity markets, presenting considerable challenges to macro adjustment and control. Seventh, although interest rates have been raised, the concern about attracting further capital inflows constrains the scope for their use. Instead there has been continued dependence on the use of administrative measures that risks distortions and lowers the efficiency of the allocation of financial resources.

All this had a marked downward effect on domestic demand. The drop in output—almost 6 per cent in the course of three years—meant in turn that government finances worsened dramatically. From a surplus at 4.2 per cent of GDP in 1990, the budget balance swung to a deficit of 12.3 per cent in 1993. In this period, moreover, registered unemployment shot up from 1.7 to 8.2 per cent. In a way, the economic crisis in the early 1990s can be said to have been generated by political decisions. The combination of a stabilisation policy realignment with some structural reforms did play a part in the course of the crisis. But it should also be underscored that such measures were broadly essential. The problem was not so much the measures that were implemented when an inflationary bubble had already developed as the fact that policy had not been realigned earlier. In recent years, economic developments in Sweden have been favourable. Growth has been stronger than in the high phase in the late 1980s and it has proved possible to combine good growth with low inflation. A couple of years after the realignment of economic policy, inflation had fallen BIS Review 47/1998  -2sharply to around 3 per cent. Moreover, the reduction of current inflation has been accompanied by a downward revision of inflation expectations. Today, neither households, firms nor financial market agents perceive any serious threat from inflation in the coming five years.
SOUTHERN CONE AND ANDEAN OPPORTUNITIES CONFERENCE CHILE: THE VIEW FROM THE CENTRAL BANK Mario Marcel1/ Governor, Central Bank of Chile April 2017  Current macroeconomic conditions and prospects in the monetary policy scenario 1. The last few months have brought mixed signals for the Chilean economy. On the one hand, 2016 ended in a low tone, with a slowdown in activity and inflation. A series of oneoff events extended economic weakness into the first quarter of 2017, lowering forecasts for the year as a whole. On the other, the global outlook appears more favorable, both for the growth of trade partners and terms of trade. This suggests a gradual improvement of economic prospects for the Chilean economy which should be further supported by an expansionary monetary policy as long as inflation remains below target. 2. Activity data and expectations in advanced economies have been more upbeat, marked by better than expected performance by the manufacturing sector and a broadening of the growth outlook across countries following years of stagnation. As a result, deflationary risks have dissipated, as inflation is expected to return to more normal levels. The Federal Reserve (Fed) has continued to normalize monetary policy and monetary authorities in Europe and Japan appear to have set aside the possibility of additional stimulus measures. Markets have incorporated these changes in their expectations avoiding any serious disruptions. Along with better signs in advanced economies, activity in China has remained relatively stable, which contrasts with what had been observed one year ago. 3.

Excluding the purchase of non-regular transport machinery, this component of investment has improved in recent months. 9. In our baseline scenario, gross fixed capital formation should experience a slightly positive growth in 2017, after three consecutive years of contraction. A key factor in the negative figures of the last few years is the ending of the mining investment cycle, which reached its peak in 2012. More recently the deterioration of housing construction has added, as the boom triggered by tax incentives finished and a modification of loan-to-value norms reduced home sales. Going forward, our forecasts rely on an increase in non-mining and nonresidential investment (mainly machinery and equipment). While mining investment will eventually return to positive territory during 2018, the gradual adjustment in residential investment is expected to continue during the following quarters (Figure 5). Figure 5 Real annual contribution to GFCF (*) (percentage points)  16  16  12  12 Other  8  8 Non-mining  4 0  4 0  -4  -4  Housing  -8  -8  Mining  -12  -12  -16  -16 09  10  11  12  13  14  15  16  17  18  (*) For sectoral GFCF, variations of the 2008 Benchmark Compilation are used. Since total GFCF is expressed using the 2013 Benchmark Compilation, annual variation of other GFCF is adjusted for consistency purposes.
When this decision was announced, it was stated that the Bank intended to purchase the equivalent of ISK 20 billion of currency by the end of 2003. To start with the Bank purchased USD 1.5 million on Mondays and Wednesdays each week. This January the Bank also began to purchase this same amount on Fridays as well, and in February purchases were added on Tuesdays and Thursdays. Currently the Bank thus purchases USD 7.5 million each week, or the equivalent of USD 390 million on a yearly basis. Even though the impact of these purchases on the exchange rate will likely be slight in the long term, as is generally the case with such intervention on the foreign exchange market, the króna rate will be somewhat lower for a while than would have otherwise been the case. 1  Aluminium smelter and related power plants. As was previously pointed out, the Central Bank spent the equivalent of ISK 40 billion to try and shore up the falling króna in the years 2000 and 2001. As a result, the Bank’s net external position worsened significantly and since that time its currency reserves have to a considerable extent been maintained with foreign short-term loans. The Bank’s plans to purchase the equivalent of ISK 20 billion in foreign currency, announced last autumn, involved paying off at least a major portion of short-term debt. This was also the primary purpose of the purchases.

Taking into consideration innovations in central bank legislation in other countries, this Act consolidated the new inflation targeting policy. The most significant change from the earlier legislation was to set a single, principal objective for the Central Bank, i.e. to promote price stability. The Bank was also granted the independence to apply its instruments in order to achieve this objective. Furthermore, it was assigned the task of maintaining Iceland’s foreign exchange reserve and fostering an efficient and reliable financial system, i.e. financial stability. The Act also stipulated that the treasury may not borrow from the Central Bank. Specific requirements were set out concerning transparency and accountability towards both the government and the public. For example, the Bank is now obliged to publicly account for its monetary policy and for monetary and exchange rate developments and its actions in these areas at least quarterly. The principal objective of current Central Bank monetary policy, as stated in the joint declaration issued by the Bank and the government in March 2001, is to keep inflation as close as possible to 2½%. Should inflation deviate from this target by more than 1½ percentage points in either direction, the Bank is to provide the government with a written public account explaining what has caused this deviation, how the Bank intends to respond and how long it expects that it will take for inflation to once again return to within the targeted inflation limits. The Central Bank has only one instrument at its disposal to achieve this objective: interest rates.
Manufacturing activity is slowing after a robust showing throughout 2021. The travel-related and domestic consumer-facing sectors are strong, as domestic mobility indicators have returned to pre-COVID levels. It is estimated that domestic economic output has reached close to its pre-pandemic trajectory (i.e., the present level of GDP envisaged in January 2020). Singapore’s GDP growth is likely to come in between 3 and 4% this year, which would bring the average pace of expansion over 2021-22 to around 5.5%. This outlook is strongly predicated on the prospects for Singapore’s three main final demand markets – China, ASEAN-5 and the US. [2] Growth will be led by the domestic-oriented and travel-related sectors, while the contribution of the trade-related sectors could retract from last year. Ongoing costs pass-through Core inflation rose to 3.8% y-o-y in Q2, reflecting both imported cost-push and broader demand-pull pressures. Core inflation is expected to remain elevated this quarter, as previous global cost shocks continue to transmit through the domestic economy. With domestic demand picking-up amid a tight labour market, consumer services inflation is likely to feature more prominently. Several results from the econometric work done by the Economic Policy Group in MAS are notable:  First, global food and energy shocks impact headline inflation within one quarter of the shock and continue to pass through to final prices for at least the next six months. Second, domestic cost increases as proxied by wages in the services sector pass through moderately to prices mainly within the following quarter.

The bank’s new statutes promulgated in February 2006 confirmed its independence in the conduct of monetary policy and enshrined price stability as its primary objective mandate. As you know, the Eurosystem attaches greatest importance to cooperating with central banks of emerging market economies, including those in the Mediterranean region. The ECB, as the central bank of the world’s second largest integrated economy, very closely monitors economic developments in regions nearby, notably the Mediterranean. 1  See Wilson, D. and R. Purushothaman “Dreaming With BRICs: The Path to 2050”, Global Economics Paper No. 99, Goldman Sachs, 1 October 2003. BIS Review 66/2009  5  As I said earlier, we have been working more closely in recent years by holding regular EuroMediterranean Seminars for central banks. And further east, we have established a similar seminar with the governors of the Gulf Cooperation Council. The group’s first meeting was held in Germany last year. Conclusion To conclude, I would like to call your attention to the following points. To start with, we are, for the first time, putting to the test the soundness and resilience of the globalised economy, which has become increasingly integrated over the past fifteen years. We now have to draw, systematically and without complacency, the lessons of the global crisis that we are fighting against. Secondly, we have a duty. Our duty is to considerably reinforce the resilience of the global financial system and the soundness of the real global economy.
Specifically, return on assets (ROA) stood at 0.67% (up on the -0.21% of 2020 and on the 0.51% of 2019). The main driver of the improvement in ordinary profit was the reduction in impairment losses on financial assets. 21  The average loan-to-value (LTV) and loan-to-price (LTP) ratios, which measure borrowers’ indebtedness in new mortgage loans, remained stable in 2021. At the same time, there were no significant variations in the proportion of loans with a higher level of leverage (those with an LTV or LTP ratio of more than 80%). As regards the loan-to-income (LTI) ratio, which reflects the relationship between the mortgage principal and the borrowers’ income when the loan is originated, most new lending was concentrated in loans with a low LTI ratio (below 3) and a high LTI ratio (above 4.5). 23  The average cost of liabilities at banks declined in the last two years, meaning a lower level at end-2021 (0.5%) than prior to the pandemic (slightly above 1%). The cost of capital stood at 8.1% in December 2021, lower than the sector’s ROE (10.5%) even without factoring in extraordinary items (9%). Moreover, the CET1 capital ratio held relatively steady in 2021, after increasing in 2020, so the health crisis has not lessened the banking sector’s overall capacity to absorb unexpected losses. The stress tests conducted by the Banco de España show that the banking sector maintains its correct aggregate resilience to the macro-financial risks identified in the present setting, albeit unevenly across banks.

In short, we have been designated as an honorary member of this entity. My thanks to the Association but, above all, to those who have made this work possible over the years, and to those continuing it and adding to its prestige today. Lastly, allow me to stress another of the grounds for a publication such as that we are presenting today. It is a question of transparency, understood as the possibility of sharing information with society as a whole. As I pointed out in one of my early public appearances as governor of the Banco de España, I consider making high-quality statistical information 4/5  available to researchers as absolutely crucial for sound analyses and research enabling better-founded economic policy decision-making.1 In this respect, we intend in the coming years to pursue various projects that allow these researchers to have access to our statistical information, thereby enabling different avenues of analysis and research of benefit to society as a whole. In conclusion, I would like to reiterate my satisfaction at these initiatives and to thank the efforts and contributions, from both the public and private spheres, of those who have participated in this publication. In some ways, this substantiates the fact that these avenues for sharing information and making it available to society are enormously beneficial for all. Thank you. 1  See my “Welcome address” for the Second Annual Research Conference of Banco de España, 2018, at: https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/IntervencionesPublicas/Gobernador/Arc/hdc030918en.pdf. 5/5
This will add to the information we already collect from surveys, official sources and the Bank’s Agency network 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  Chart 5: Uncertainty indicator well correlated  Chart 6: Better correlated with investment than  with GDP growth  consumption  Source: ONS and Bank of England calculations  Source: ONS and Bank of England calculations  Chart 7: Rising uncertainty tends to shift new hiring  The first two speak for themselves: aggregate  towards temporary jobs  GDP growth is strongly correlated with uncertainty; on the demand side, the share of business investment is more sensitive than that of 6  consumer spending . The fourth is interesting. Although employment decisions are more easily reversed than most capital spending, permanent appointments do involve at least some degree of commitment and therefore might be susceptible to changes in uncertainty. The data seem to bear this out. Chart 7 plots the change in the uncertainty measure against the ratio of temporary to permanent job hires (as measured by the REC job market survey). The correlation is clear, including in the Source: REC survey, ONS and Bank of England calculations  most recent data. 6  Charts 5-7 display the bare correlations with uncertainty and don’t necessarily tell you about causation – it’s quite possible that weaker growth increases uncertainty about the future. But even after you attempt to control for this reverse effect, the impact of exogenous changes in uncertainty still appear very significant.

Based upon the aforementioned assumptions and trends, the Reserve money target for end 2007 has been computed by allowing the necessary increase from that as targeted at the end 2006 value to accommodate the expected GDP growth of 7.5 per cent, inflation of 8.5 per cent, and an extra 1.6 per cent to cover the change in velocity, a total of 17.6 per cent. The Broad money (M2b) target too, has been computed by applying the properties of the Quantity Equation, the inflation target and expected economic growth 3 . The Reserve money growth will be facilitated by two major developments, the change in the Net Foreign Assets and the change in the Net Domestic Assets of the Central Bank. The Net Foreign Assets of the Central Bank have been determined by the expected BOP surplus of US dollars 200 million. As already explained, the planned monetary programme requires the Reserve money growth to be maintained at 17.6 per cent from the targeted level of Reserve money as at the end of 2006. At the same time, the expected reserve build up of the Central Bank indicates an increase in Net Foreign Assets of the Central Bank by Rs. 21 billion while the Net Credit to the Government from the Central Bank will increase by Rs 11.5 billion, which includes provisional advances of Rs 12.5 billion, and a decline of Treasury bills by Rs. 1.0 billion. 3  A crucial factor in developing the monetary programme is the assumptions in velocity of money and money multiplier.
I believe that if collected and channeled in the right way, the funds can be of great value in fighting poverty, leading to long-term social improvements and long-term resilience of communities. Islamic banks can play a greater role and participate more actively in this area, particularly in developing innovative ways to enhance access to and outreach of zakat. Positive partnerships between Islamic banks and zakat institutions is a means to explore in this regard, to provide greater convenience to customers, while strengthening public trust and confidence in the system. Second, Islamic finance must embrace the tech revolution to power up innovation. Fintech is rapidly changing the facets of the global financial industry, reshaping the expectations of consumers and businesses on financial services. For Islamic finance, there are large opportunities in fintech to develop financial solutions that can help drive Islamic finance to deliver even greater, wider and deeper positive impact – particularly in realising its promise in risksharing and providing support for genuine and productive economic activities. An example is the Investment Account Platform in Malaysia, which is a multi-bank online platform that connects investors to viable economic ventures, mainly SMEs. Technology can also widen access to and increase outreach of social financing instruments through digitisation of collection and disbursement of its proceeds. Fintech startups such as LaunchGood and SkolaFund are already making their name in social impact initiatives, which is a promising start.

Considerable progress was made in elevating living standards in many corners of the world, with hundreds of millions of people lifted out of poverty. The world economy has also gone through great transformation. We now have a truly global village. Closer ties have been formed between countries with the help of rapid technological progress and increased international integration. Stronger trade and financial linkages follow suit, at a rigour, more than could have been imagined, half a century ago. Yet, against these gains, the world faces daunting challenges affecting sustainability that could dramatically alter the overall growth outlook in the next 50 years. Today, I would like to name three challenges that confront us. The first is climate change. What was once a theoretical discussion in lecture halls, today, climate change has impacted us more frequently and in more visible ways than ever before. The increasingly complex needs and demands of modern civilisation have indeed exerted a significant toll on the environment. Over the past two decades, carbon dioxide emissions have risen significantly, leading to a wide range of problems such as rising sea levels; melting glaciers; and more extreme weather events. It is alarming that the number of reported weather-related natural disasters has increased threefold since the 1960s. The effects of these events have been devastating – economic activities have been disrupted; large resources have been rechannelled; and vulnerable segments of societies have been the most affected.