samchain/econo-pairs-v1 huggingface dataset:
A study by Catherine Mann at the Institute for International Economics shows that trade and global production accounted for 10-30 per cent of the price fall on hardware products in the United States during the 1990s. This led to growth being approximately 0.3 percentage points higher each year between 1995 and 2002 than it would otherwise have been. Today, expenditure on software is increasing at twice the rate as on hardware, and this process has scarcely begun in large areas of the economy. If prices for software also begin to fall, thanks to globalisation, the second wave of productivity gains can be even greater than the first, particularly within the services sector, which has the greatest potential. We have seen that globalisation of trade and production patterns has led to more operators, who also have lower costs, participating in the world economy. This has led to international competition becoming stiffer and prices being pushed down. Similarly, the increasing trend towards deregulation and privatisation over the past two decades has contributed to making production more efficient and raising productivity, which in turn has had a subduing effect on price trends. The question of how globalisation and structural changes may affect the future path of inflation will probably attract increasing attention in central bank circles. If, on the one hand globalisation and new  BIS Review 21/2004  3  technology have led to economies having a lower inflation propensity, it may be possible to achieve a higher level of resource utilisation without inflation accelerating.

This means that the Riksbank is as anxious that inflation should not be too low as that it should not be too high. In Sweden, the annual CPI inflation rate was negative in February, for the first time since the beginning of 1999. Is there a risk of this development continuing, and what can the Riksbank do if it does? To begin with, it is important to distinguish between whether price trends are governed by developments on the demand side or on the supply side. A period of falling prices is often due to aggregate demand being significantly lower than the total supply of goods and services in the economy. This type of situation can arise for two reasons: One is that demand could fall heavily, for instance, as a result of households for some reason reducing their consumption. The other is that supply could increase significantly, for instance as a result of technological advances leading to increased productivity. While demand-driven deflation is connected with weak production growth, the opposite applies to supply-driven deflation. These are usually termed “bad deflation” and “good deflation” respectively. In practice it is not so easy to distinguish between one sort of deflation and the other. Problems arise when demand is too low in relation to supply.
Michelle Neal: Advances in digital currency experimentation Remarks by Ms Michelle Neal, Executive Vice President and Head of Markets of the Federal Reserve Bank of New York, at the Singapore FinTech Festival 2022, Singapore, 4 November 2022. ***  As prepared for delivery Good afternoon. It is a pleasure to be here with you at the Singapore Fintech Festival. It is exciting to be a part of this gathering of industry professionals, policy leaders, and investors to discuss key developments in the fintech industry. Digital innovation has the potential to benefit the financial system writ large by reducing transaction costs, increasing competition, and broadening access to a wider range of participants. However, harnessing the full potential of financial innovation and related technologies – especially regarding cross-border settlements and payments – will require collaboration across a range of international partners. In my remarks today I will discuss the landscape of digital assets and some of the ways that the Federal Reserve System is engaging in research and experimentation that support ongoing innovation. As always, the views I express today are my own, and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. Digital Assets and the Federal Reserve We are all experiencing the incredible pace of growth and change within the digital asset domain, which encompasses a range of opportunities and risks.

References Alsterlind, Jan (2021), "The development of risk premiums on covered bonds during the coronavirus pandemic", Economic Commentaries No 13 2021, Sveriges Riksbank Archer, David and Paul Moser-Boehm (2013), "Central bank finances", BIS Papers No 71 Bank of England (2022a), “Asset purchase facility quarterly report – 2022 Q3”, Bank of England Bank of England (2022b), “Letter from the Governor to the Chancellor”, Bank of England, 22 November 2022 Bernanke, Ben (2020), ”The New Tools of Monetary Policy”, American Economic Review 110(4), 943-983 Bhattarai, Saroj and Christopher Neely (2022), “An analysis of the literature on international unconventional monetary policy”, Journal of Economic Literature 60(2), 527-597 Bullock, Michele (2022), ”Review of the Bond Purchase Program”, speech on 21 September 2022, Reserve Bank of Australia Calmfors, Lars, John Hassler and Anna Seim (2022), “Samspel för stabilitet – en ESO-rapport om rollfördelningen mellan finans- och penningpolitik, (Interaction for stability – an ESO report on the division of roles between financial and monetary policy), report to the Expert Group for Public Economic Studies ESO 2022: 3  26 [30]  De Rezende, Rafael B., David Kjellberg and Oskar Tysklind (2015), “Effects of the Riksbank's government bond purchases on financial prices”, Economic Commentaries, No. 13 2015, Sveriges Riksbank Del Negro, Marco and Christopher Sims (2015), “When does a central bank’s balance sheet require fiscal support?”, Journal of Monetary Economics 73, 1- 19 Di Casola, Paola (2021), "What does research say about the effects of central bank balance sheet policies?
Zeti Akhtar Aziz: Greater financial integration and financial stability Opening remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the SEACEN 30th Anniversary Conference “Greater financial integration and financial stability”, Kuala Lumpur, 20 October 2013. *  *  *  Bank Negara Malaysia is honoured to welcome you to the SEACEN 30th Anniversary Conference on “Greater Financial Integration and Financial Stability”. We are especially honoured by the presence of Governors and senior officials who are here today, despite the pressing demands on our institutions during this period of persistent uncertainties in the global financial and economic environment. We continue to face challenging and often testing times. Over the recent five years, we have been confronted with recurring episodes of turbulence, followed by phases of transitory recoveries. We have seen, and have been part of, extensive collaborative measures and reforms pursued at both the regional and global level. Yet, the calm after the storm continues to evade us. The SEACEN and Asian economies have seen significant structural adjustments and wide ranging financial reforms in this decade. During this period intra-regional trade activity has rapidly increased, signifying the deepening of economic ties within the region. Intra-regional trade in East Asia has expanded from an average of 44% of total trade in 1995, to 50% in 2012. Intra-regional investment activity has also been on an uptrend.

While these ever emerging technologies such as Digital transformation, Artificial Intelligence, Internet of Things, Cloud Computing, Enterprise Mobility and Mobile Banking, have brought about efficiency and increased innovations, they have also exposed the financial services sector to cybercrime. Some notable incidents of 1|Page  cybercrime include, the attack on the Central Bank of Bangladesh, Russian retail bank and seven banks in the United Kingdom. The financial services sector is a key target by criminals because it is the custodian of large amount of funds in the economy. For this same reason, the financial services sector has to also deal with other types of risks, which among others include, fraud, extortion, money laundering, illicit financial flows, market manipulation, data theft, and currency attacks. With statistics showing an increase of cyber-attacks in the financial sector, the importance of ensuring that our institutions are cyber resilient cannot be over-emphasized. Ladies and gentlemen, the financial services sector has to see cybersecurity for what it is, a large scale operational risk deserving the utmost attention and thus develop the necessary systems and cultures throughout the sector to deal with this risk. Key to the development and operation of these systems and cultures is the need to nurture talent capable of addressing cyber security threats through prompt detection, investigation, reporting, prosecution and prevention. Distinguished participants, let me also emphasize that cyber risks should be viewed from an enterprise-wide perspective.
Although in some areas, such as the unsecured money market or the bond market, the euro seems to have boosted market integration, in other areas, such as repo and equity markets, the impact has been much weaker. The need for further efforts in this direction is fully recognised by many institutions, including the ECB, and is at the heart of the European Union's initiative to create a truly integrated market for financial services. The VicePresident will address this issue tomorrow in his summing-up. The second ECB Central Banking Conference is structured very much like the first one. Today and tomorrow, there will be three sessions covering a number of issues related to the general theme of this conference, and based on research papers and contributions from discussants. A policy panel will follow these sessions. The first session will deal with developments in European banking. The paper by Jean Dermine takes a look at how the European banking system has changed since the Treaty of Rome in 1957. It then asks a provocative question: how "real" is the single banking licence? The second session, tomorrow morning, will address the changing character of European finance, and in particular consider to what extent Europe is shifting from bank financing to market financing. In their paper, Luigi Zingales and Raghu Rajan will assess recent developments in this respect, and impediments to a further shift to a more market-based financial system.

Since the early days of the ECB and the first ECB Central Banking Conference, sufficient time has passed for us to assess whether we at the ECB have made an effective contribution to the relationship we have with the academic world. The academics here today should be the first to be asked this question. From our side, I am inclined to say that we have been effective. I am in particular referring to the success of our Graduate Research and Visitors Programme. In this context, I should like to announce the establishment of five fellowships for young researchers working in top-priority fields within the Financial Research Network. The Executive Board has decided to call these fellowships the 'Lamfalussy Fellowships', in honour of the first President of the European Monetary Institute (EMI), who has made an impressive contribution to the process of European monetary and financial integration. Another example of successful co-operation and exchanges of information between the academic world and the ECB is the launching of a series of conferences and research networks. Of these, the ECB-CFS research network on "Capital markets and financial integration in Europe" has the closest ties to the theme of this year's conference – the transformation of the European financial system. Some of you may have attended the initial workshop here in Frankfurt last April. It's a European initiative; future workshops are to be held at the Bank of Finland in Helsinki, in March next year, and at the Bank of Greece next November.
2  BIS Review 63/2002  fluctuated between 1.5 and 2.7 per cent) but also to the fact that the demand for labour declined in 4 connection with the economic recession at the beginning of the 1990s. A high level of credibility for the inflation target has pushed down inflation expectations. Stable inflation expectations make it easier for the social partners to negotiate new wage agreements. They do not need to worry that pay packets will contain mostly air and they have no need to safeguard by demanding high nominal wage increases, as was often the case before. The institutional changes in wage bargaining may also have contributed to more subdued wage increases. The coordination of wage bargaining rounds with centrally-established agreement levels, but a local distribution of wages, mean that the cost to society of excessive agreements is accounted 5 for and that market forces exercise a restraining influence on wage demands at local level. The tendency towards a greater element of local wage formation has made the wage process more flexible during the 1990s. Other important explanations are that new compensation methods, such as bonus wages and profit-sharing have been introduced in many areas of the labour market, which has probably increased flexibility. Companies are then able to reduce their payroll expense to some extent during downturns in the economy. During the 1990s, there has also been a development towards limited period employments, which should lead to greater flexibility in the labour market.

Our main concern is that across euro area countries domestic vulnerabilities are still very large, which implies a limited ability to withstand adverse external shocks and to kick start a new phase of sustainable growth. The vulnerabilities of many euro area countries are related to the high stock of debt, both public and private, and to a number of structural rigidities and institutional bottlenecks that prevent an optimal allocation of resources across factors of production, and thus limit total factor productivity growth. The current environment not only urgently calls for the implementation of structural reforms, but also provides the right conditions for their implementation. With our monetary policy, the ECB is greatly contributing to an environment favourable to implementing structural reforms: our accommodative monetary policy stance helps countries to gain time, time to implement the necessary measures to increase resilience and thus support sustainable growth. However, there is only a limited role for demand-side policies. Fiscal space is limited and monetary policy cannot carry the burden of the adjustment alone. For the euro area to become more resilient and sustain stronger growth, national governments need to bring about further structural change 1. Work in this regard has already started, and the reform wave of the countries hardest hit by the crisis is showing some initial results, such as a GDP recovery related to comprehensive labour market reforms. Other reforms, mainly on product markets, are expected to bring about GDP gains, but they need to be implemented in full.
In sum, after recognizing credibility as the main asset of a central bank, especially an independent one, we can conclude that drawing on parallel work on trust in institutions may provide a useful Page 6 of 8  Central Bank of Chile July 2019  framework to assess the current situation and to guide action to address existing gaps and vulnerabilities. Trust in the Central Bank of Chile The experience of the Central Bank of Chile can illustrate some of the ideas above. The IMF study on the importance of credibility for monetary policy underscored anchoring of inflation expectations in Chile as key to the effectiveness of its monetary policy and macro resilience in the face of external shocks. Deviations of long-term forecasts of headline inflation from target have been less than 0.1%–being the lowest for a sample of emerging countries, and even lower a benchmark group of advanced economies. This is remarkable considering that inflation volatility in Chile has not been particularly low relative to other emerging economies. Yet we do not see credibility as an immutable attribute, given the dynamism of trust in institutions in the public opinion and market perceptions. We believe that a positive past record helps, but trust can deteriorate in a number of ways, some of them pretty fast, in the face of new standards and developments. Therefore, trust needs to be protected and enhanced in a systematic way with different stakeholders in the different dimensions of activity of the Bank.

A discussion of these kinds of central considerations is typically missing from the criticism put forward. In the international discussion, the central banks’ policy rates are currently seen as quite blunt tools when it comes to curbing the rise in household debt and housing prices. The reason for this is that the interest rate cannot be targeted at the problem area in question, but has a much broader impact on the economy, such as companies’ investments and, via exchange rate effects, their export opportunities. 11 It does not come as much of a surprise therefore that no central bank has so far used the interest rate weapon to any great extent for this purpose. There is currently a relatively high level of agreement that macroprudential policy and well-designed financial regulation should be the first line of defence in preventing financial imbalances from accumulating. 12 The tolerance band was not a target range As I mentioned, one proposal has been that the tolerance band for the inflation target should be reintroduced, as it is assumed this would make it easier for the Riksbank to raise the repo  11  The broad impact of the interest rate is occasionally highlighted as an advantage, however. Unlike macroprudential policy measures which can sometimes be circumvented, “the interest rate gets into all the cracks” (Stein, 2013). 12  See IMF (2015). BIS central bankers’ speeches  7  rate. It could be helpful to remind ourselves here why there was previously a band surrounding the inflation target.
This is important not least for the subsequent discussions with the other EU countries. I have devoted a good deal of my time here to the question of an appropriate central rate and how this question can be addressed in principle. There are two points I want to underscore: •  Calculations of the real exchange rate, which provide a starting point for discussions about reasonable central rates, are highly uncertain. Different economic models yield different results but can still be used to arrive at an approximate interval. Our calculations consistently suggest that an appreciation from the present rate is motivated. However, as relative GDP, terms of trade and other explanatory factors vary over time, calculations today may give a somewhat different picture from the calculations that were made some years ago. •  When setting a rate it is also natural to consider the level that is appropriate in the medium term. In this context it is primarily a matter of ensuring a stable adaptation to ERM2 and EMU, which calls for an exchange rate that markets find credible. The conditions for achieving this are naturally better if economic development in Sweden is balanced, with stable prices, etc. An unduly weak rate implies a stimulus to the Swedish economy that soon has to be met with a tightening of fiscal policy. An unduly strong rate, on the other hand, may be too restrictive, with negative consequences for growth and employment in Sweden.

On the contrary – low inflation is necessary for a favourable development of production and employment. Sweden is a clear example of this. 9/10  BIS - Central bankers' speeches  Thank you! 10/10  BIS - Central bankers' speeches
Falling prices on the Baltic property market In terms of financial stability, the development of the Baltic property market is of course a cause for concern. This development is in many ways reminiscent of the Swedish property  BIS Review 105/2009  3  crisis. Exaggerated expectations of future price increases pushed up prices, particularly housing prices. Now the prices of both commercial properties and housing have fallen dramatically. For example, the average price of an apartment in Tallinn was more than 50 lower in June 2009 compared to the peak in April 2007. This means that prices will soon be back at the level of 2004 (see Figure 10). In Latvia, the average price of apartments fell in the same period by almost 60 per cent, which is among the largest price falls noted in Europe during this crisis. 6 In Lithuania, the fall in prices has been comparatively moderate: 28 per cent during the second quarter of this year compared to 2008. 7 We could say that after being a landlord's market for several years, the property market is now a tenant's market. In an economic downturn, it is common for landlords to offer rent rebates or to refrain from increasing rents in line with the index to the full extent allowed in rental contracts. Lenders can also put pressure on the construction and property companies to increase the level of occupancy.

With these differences in mind, we can note that it is unlikely that the fall in prices we have seen so far will lead to a crisis on the Swedish property market. However, an economic downturn is always associated with increased risks. During the second quarter of this year, nominal prices for office premises in Stockholm, Gothenburg and Malmö fell by between 14 and 20 per cent on an annual basis. These are substantial price falls, although not as substantial as during the crisis of the 1990s. Prices began to fall in late 2007 and this was primarily driven by that fact that investors increased their return requirements. At the same time, rents were still increasing at a good rate, which counteracted an even more substantial fall in prices. However, rents began falling in the spring, especially in Stockholm where the number of vacancies has also increased. Given that the outlook on the labour market is deteriorating and that bankruptcies are expected to increase among tenants, it is highly probable that vacancies will continue to increase. Such a development will reduce the earnings of the property companies, thus weakening their ability to make interest and amortisation payments. Ultimately, this may also lead to the suspension of payments on the part of property companies too. Falling prices may also cause difficulties for the property companies if they do not meet the banks' requirements regarding maximum leverage.