samchain/econo-pairs-v1 huggingface dataset:
This finding is consistent with other past and ongoing research here at the New York Fed that points to the potential longer-term negative implications of student debt on homeownership and other types of consumer spending. Of course, homeownership is more than just consumption—it has historically been an important form of wealth accumulation. For a large share of households, housing equity is the principal form of wealth. Thus, changes in the way we finance post-secondary education could also have important implications for the distribution of wealth. Before turning it over to my colleagues, I would like to comment briefly on the importance of college costs, financing and access to higher education. It is well known that the average earnings premium from having a college education is high and has risen over the past few decades, in part because of a decline in real average earnings for those without a college degree. In addition to higher earnings, a college education is associated with increased homeownership, as I just discussed. The economic and social returns to having a well-educated and skilled labor force are also well documented. However, I would like to highlight another important role of higher education: it is a pathway to and engine of upward income mobility. I believe that income mobility—the degree to which individuals or families can move up or down in the income distribution over time—is a foundational element for a well-functioning society and indicates the ability of an economy to provide opportunities for all.

One possibility is that recent budget cuts may have forced these colleges—which tend to be mid-tier public institutions—to raise tuition and change their admissions policies more than other institutions, such as less budget-constrained elite private institutions. Empirical evidence points to a greater sensitivity to college costs in the higher education decisions of low-income populations. As a result, continued increases in college costs and debt burdens could inhibit higher education’s ability to serve as an important engine of upward income mobility. In my view, these developments are important and deserve increased attention. Thank you for your kind attention. I will now turn it over to Wilbert van der Klaauw, who will give a brief overview of the current state of household debt. 1 See Economic Opportunity and Income Mobility, Remarks at the Association for Neighborhood and Housing  Development Annual Community Development Conference, April 11, 2016. 3/3  BIS central bankers' speeches
John C Williams: 901 days Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Securities Industry and Financial Markets Association (SIFMA), New York City, 15 July 2019. * * * As prepared for delivery Thank you for the kind introduction and the opportunity to speak this morning. It’s a particular pleasure to be sharing the stage with Andrew Bailey, who has played such an important role in leading efforts on establishing robust references rates to replace the London Interbank Offered Rate (LIBOR). This critical undertaking traverses markets and transcends jurisdictions, making international cooperation and coordination essential for success. Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Where Have We Come From? Today I’m going to talk about the progress we’ve made, and the path that lies ahead. But first, given that 12 years have passed since LIBOR first became an acute area of concern, it’s important to remember why replacing it is so critical. LIBOR is based on submissions from individual banks. The volume of actual transactions that term LIBOR is based on is very small—totaling around $ million on a typical day.

But we are now at a critical point in the timeline. The very complexity of this issue is why the industry cannot afford to wait any longer. The clock is ticking, and there are 901 days left. 1 Alternative Reference Rates Committee, Second Report, March 2018. 2 Financial Stability Oversight Council. 2018. Annual Report. Washington (revised June 20, 2019). 3 International Organization of Securities Commissions, Principles for Financial Benchmarks, Final Report, July  2013. 3/3  BIS central bankers' speeches
Much of this work involves international institutions like, for instance, the International Monetary Fund, the World Bank, the Bank for International Settlements, the Basel Committee on Banking Supervision, and the OECD, as well as the newly created Financial Stability Forum. 1  Governor Bäckström is also Chairman of the Board and President of the Bank for International Settlements. Before becoming Governor of the Riksbank in 1994 he was State Secretary in the Ministry of Finance with responsibility for Fiscal and Financial Affairs, which included the responsibility, under the minister, for the handling of the Swedish banking crisis in the early 1990s. 1  BIS Review 88/1999  However, the work, often hard, of implementing policies and codes lies with national authorities. These measures will contribute to improved financial stability only if countries actually adopt and implement them. A crucial ingredient in achieving this is of course to involve countries, formally or informally, in the development of the policies, codes and standards. But even if that is achieved, I know from my own experience how difficult the actual implementation sometimes can be, not least for political reasons. I would also like to make the point that today’s favourable trends in the world economy should not lead us to conclude that the danger is over. Instead, policymakers throughout the world must continue to work on forestalling new problems both because some evident threats to international financial and economic stability still remain and because there may well be vulnerabilities that are not so evident.

Chart 8: Accounting for intangibles reduces the missing-investment puzzle  Note: The orange line shows the investment puzzle using industry-level data, and the shaded area around it is the 95% confidence intervals. The line shows the estimated year fixed effects from an industry-level regression of investment rates on the wedge, including industry fixed effects, and standard errors clustered at the industry level. See Appendix B to Bailey et al. (2022) for full details. The blue line shows the same statistic from the regressions in which both investment rates and the wedge are adjusted to include intangibles. See Appendix A.2 to Bailey et al. (2022) for a discussion of the adjustment. Source: ONS, KLEMS, Jordà et al. (2017) Macrohistory Database and authors' calculations. The remaining puzzle is mostly concentrated immediately after the global financial crisis, and so it is possible this is not driven by structural factors, but rather the lingering impact of the global financial crisis, for example related to the sluggish demand recovery or financial frictions. [22] While the results suggest an important role for intangibles in explaining the missing-investment puzzle, a few notes of caution are in order. It could be that certain drivers of investment, such as financial frictions, are captured more accurately only at more granular level, such as in firm-level data. Moreover, there could be large non-linearities related to the nature of the global financial crisis that cannot be captured by the simple regression framework used above.
Even if you are right, consistently betting on that mispricing can drive you out of business if the majority of the other agents keep acting in such a way as to validate such mispricing. As in Keynes’ beauty-contest illustration, what matters for you is not so much to be right about fundamentals as to be right on what others will do. This position was best expressed just one month before the beginning of the crisis by Chuck Prince, then CEO of Citigroup, when, in an interview with the Financial Times, he stated that5 “[w]hen the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. […] At some point, the disruptive event will be so significant that instead of liquidity filling in, the liquidity will go the other way.”  4  See Shleifer and Vishny (1997). 5  See “Citigroup chief stays bullish on buy-outs”, by Michiyo Nakamoto and David Wighton, published in the Financial Times of July 9, 2007. 4  BIS central bankers’ speeches  Those words provide the strongest possible refutation of the notion that an asset price being out of line with fundamentals will by itself guarantee that such a misalignment automatically disappears.

This is why I find it helpful to draw insights from psychology. Zimbardo’s work draws from well-known controlled studies such as Milgram’s electrocution exercise and the Stanford Prison Experiment. He also examines real-life cases like abuses in the Abu Ghraib and Guantanamo Bay prisons. All these cases revealed that ordinary people are a lot more capable and willing to engage in shocking and unethical conduct than we would expect. For instance, the prison studies uncovered deeply disturbing abuses by guards in both real-life and controlled settings. Verbal insults. Humiliation. People being treated like animals – all these by men and women who had loving families, a good upbringing and otherwise ordinary lives. Zimbardo proposes a threefold framework of “system”, “situation” and “person” to make sense of the factors affecting such behavioural choices. He points out that ethical and behavioural choices are often the result of a dynamic interplay. “What do the people bring into the situation? What does the situation bring out of them? And what is the system that creates and maintains that situation?” It is fascinating to note his conclusion that “personal” convictions matter, but only slightly. The overwhelming evidence shows that the “situation” and “system” – pose the greatest influence on behaviour. While this appears to paint a grim and depressing picture of humanity, I believe that there is a silver lining here. These findings suggest that, given the right “situation” and “system”, people are capable of much good – even in the highly-competitive and fast-paced world of finance.
To blend more ingredients into the world economic cocktail, again we face a substantial increase in commodity prices. As usual, it can be attributed to various factors. One is the fast growth of emerging economies and the subsequent increase in demand. Add to this, among others, climate elements that have hindered the production of foods, and geopolitical risks that have pushed up the oil price. These high prices, combined with the fact that emerging economies are near their potential growth level, some with clear signs of overheating, both actual and expected inflation have risen all over the world. Several emerging economies, Chile among them, have withdrawn monetary stimulus as a response to this cycle. In contrast, developed economies, with a timid recovery, have not only sustained their ongoing monetary packages but are expected to keep them in place for a while. This mixture of monetary policy imbalances, high commodity prices, and good growth prospects in emerging economies have created tensions in exchange rates and capital flows, two issues I will refer to now. The exchange rate and capital flows Before the financial crisis hit, some developed economies, particularly the United States, were accumulating big deficits in their current accounts. This excess spending was being financed by surpluses in emerging markets, primarily China with its high saving rates, and oil-exporting economies (figure 4). Global imbalances were an important factor in the crisis. This was not uncommon for emerging economies: low saving rates, large current-account deficits and borrowing used to finance unsustainable consumption or fiscal expansions.

BIS central bankers’ speeches  7  Figure 3 Output gaps (*) (percent) 4  4  2  2  0  0  -2  -2  -4  -4  -6  -6 97  99  01  Developed economies  03  05 Emerging Asia  07  09 Latin America  (*) OECD estimates are used for output gaps in developed economies. For the other regions, output gaps are obtained using an HP filter. Sources: Central Bank of Chile based on Bloomberg, Consensus Forecasts, OECD and the respective country’s statistics institute. Figure 4 Current-account balance (billions of dollars) 1.500  1.500  1.000  1.000  500  500  0  0  -500  -500  -1.000  -1.000  -1.500  -1.500 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10  Rest of the world  Oil exporters  Emerging Asia  China  Japan  United States  Eurozone  Source: International Monetary Fund, April 2011's WEO.
Yet, the view from the market seems to be that, while a declining proportion (but not a declining amount) of China’s goods will physically pass through Hong Kong, Hong Kong companies will continue to play an important intermediary function in sourcing the products and identifying the markets. Beyond this, it is likely that Hong Kong’s role will gradually change from one of intermediary into one of proprietor. The further liberalisation of China’s economy offers immense opportunities for Hong Kong investors, who, apart from possessing the necessary wealth, have a number of distinct advantages. They have a common language and culture with their counterparts on the mainland. They have an immense and very detailed knowledge of the mainland business landscape, and a great deal of practical experience. They also have proximity and wellestablished connections. This will no doubt be a profound change in role for Hong Kong. But I also have no doubt that Hong Kong will be able to cope well, just as it did over its history of economic development, from entrepot to manufacturing centre to international business centre. Those of you who speak with businessmen and women in Hong Kong - who are the backbone of our economy - will probably hear that many of them are already establishing or reinforcing their links, or opening branch offices across the border in anticipation of China’s WTO entry. This trend is already quite evident in the larger companies.

Therefore I welcome the creation of a G7 group dedicated to cross-border cyber exercises, and I confirm today that the Banque de France will coordinate the G7 test in 2019. Cybersecurity will indeed be one of the priorities of the forthcoming French presidency of the G7 next year. Besides cyber risks, we need to seriously deal with the emergence of crypto-assets. The underlying technology clearly promises sustainable innovation. The Banque de France was the first central bank to offer a service to the market based on blockchain and we intend to carry on experimenting with this technology. But support for blockchain doesn’t mean blind support for bitcoin and the like speculative assets. We were clear in the G20 last month, and let me be clear today. First, the frequent use of the term “digital or virtual currency” misleads the general public on what those assets really are: they are not currencies, with none of a currency’s key functions – store of value, medium of exchange, unit of account. Moreover, crypto-assets carry obvious risks in terms of consumer and investor protection, as well as money laundering and terrorist financing. Therefore they require internationally harmonised answers: the Financial Stability Board, in consultation with other standard-setting bodies and the Financial Action Task Force (FATF), should make recommendations by next July. In particular, we should work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy.
According to INSTAT data, Albania’s annual economic growth was 3.4% in the first quarter, supported by the fiscal stimulus of this period and foreign demand for Albanian products. On the other side, private consumption and investments continue to be slow, reflecting cautious consumer behaviour and existence of spare production capacities in the economy respectively. The Bank of Albania deems that economic activity posted similar growth even in the second quarter, with higher contribution of the private sector and downward public sector and foreign demand. Consumer prices were under added inflation pressures during 2011 H1, mainly due to foreign price increase in global markets. Average annual inflation during the first and second quarters of the year was 4.0% and 4.1%, respectively. As regards the consumer basket items, prices of processed foodstuffs had the main impact on the formation of annual inflation. Their contribution to headline inflation floated around 55%, close to this indicator’s all-time record. Inflation of non-food consumer goods, such as oil and other day-to-day consumer goods and services, was an added contribution to consumer price hike. On the other hand, the contribution of non-processed foods to inflation was stable. Gradual upsurge of domestic food products supply during the second quarter, balanced the effect of these items price increase in international markets. Lastly, administered prices and increased excise on some products had an increasing impact on annual inflation, albeit lower compared to a year earlier.

Lending to the private sector increased on average by 11.5% during the first five months of the year, about 1.5 p.p. higher than 2010 H2. In contrast to previous years, lending is oriented more towards the national currency: ALL-denominated loans increased by about 14% as at May. Lending continues to be impacted by a moderate demand for loans while the banking system has adopted prudent lending practices, with tightened lending standards for certain market segments. Financial markets were calm reflecting low risk premiums and a good liquidity situation. In the interbank market, interest rates fluctuated around the key interest rate, following its latest increase in March. The increase in the key interest rate is also followed by the yields in the  BIS central bankers’ speeches  3  Government securities primary market and is reflected less in the ALL-denominated deposits and loans, due to factors of liquidity and risk that accompany financial intermediation. The yields curve has retained its trend, indicating low inflation premiums in financial markets. Summing up the expected economic performance, our projections and assessments suggest that economic growth will continue even in 2011 H2. Aggregate demand will be supported less by the public sector and foreign demand, while the private sector is expected to provide a larger contribution to the economy. Nevertheless, economic growth is not expected to fill completely the negative output gap.
The whole region is going through a political, economic and social consolidation process. The policy-makers, the decision-makers, the examiners and almost everybody declare that their priority is the adherence to the European Union. The question to ask is if:   we have either to converge towards the European economic zone with small and fragmented economic structures competing with each other for European markets and opportunities,    or embrace a model:   gaining from the economies of scale,    encouraging and exploiting the advantages of the current competitive positions;    that grows the economic prosperity of the whole region and of each individual economy? Personally I think that the second alternative is the contemporary approach that our region should embrace with no hesitation. The success of this process shall depend on all our attempts and devotion to see which our competitive advantages are and to build up the right  2  BIS Review 117/2010  economic, financial, legal and physical infrastructure to use and increase these advantages to become competitive in the global economy. Therefore, its is significantly important that the study of the growth model takes place not only from a regional point of view, but to be an approach directed deeply towards the future.

To make things worse, the “originate-to-repo” transactions that took off when the turmoil started in July 2007 have often little in common with the “originate-to-distribute” assets that  2  BIS Review 84/2010  were marketed before mid-2007. Thus, the “originate-to-repo” securities do not aim at being attractive to investors, but serve a different purpose, namely to generate collateral buffers with the central bank. So, the significantly large volumes of retained issuance are effective indicators of the scale of the continuing dislocation of the ABS market and the vanishing of private markets. However, it should be obvious to everyone that the issuance of ABS only to serve as collateral with central banks cannot be a sustainable strategy for the ABS market. In normal times central bank operations are intrinsically of a short-term nature and of a limited size, and are designed to implement the stance of monetary policy. By contrast, ABS transactions backed by residential and commercial property loans have much longer maturities and must cover a very sizeable market. In other words, in normal times central banks tend to have a very limited involvement in financial intermediation and only private investors have the capacity and the need to offer long-term funding to originators. What are the more recent trends? Some developments in the last few months may be interpreted as showing tentative signs of a recovery as new ABS issues were distributed and placed with private investors .
Our institutions have successfully tackled the COVID-19 crisis thanks to a combination of suitable risk management and the set of extraordinary measures approved by the public sector (governments, prudential regulators and supervisors). I am confident that they are well prepared to deal with these new tensions and turbulence. In conclusion, the economic situation remains highly uncertain, in particular due to the ongoing war in Ukraine, the implied tensions in food and energy markets, the sanctions enacted against Russia, and the risks surrounding the continuation of energy trade with the latter. The economic effects of this situation can now clearly be seen for the economy as a whole and, in particular, for the more vulnerable citizens. With all of the uncertainty that surrounds any projection in these changing circumstances, while we foresee a significant deceleration of the economy and high inflation in the very short-run, we also expect the economic situation to normalise thereafter, with inflation easing over 2023, once all of the factors I referred to earlier have returned to normal. Fiscal policy has a key role to play, provided it targets the households and economic sectors hardest hit by the crisis, as also recently stressed by the European Commission, given the limited room for manoeuvre in public budgets. An appropriate combination of policies would support economic normalization and help tackle the inflationary episode, as would the continuation of prudent approaches by wage- and price-setters. Monetary policy can certainly meet the challenge.

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