samchain/econo-pairs-v1 huggingface dataset:
For a longer-term perspective, Chart 4 shows an estimate of UK TFP back to 1 AD, alongside GDP per head. The measurement problems in GDP and productivity were probably more acute then than now. Nonetheless, the “hockey-stick” profiles of both GDP and TFP are striking, both in their own right and in their similarity. Over the long haul, GDP and TFP have moved in lockstep. For many centuries prior to the Industrial Revolution, productivity and GDP growth in the UK averaged only around 0.01% per year. Each generation was only around 0.3% better off than their parents – a scarcely noticeable improvement. Secular stagnation in living standards and innovation persisted for many centuries. History suggests both secular innovation and secular stagnation have, at different times, been the norm. Although productivity growth has picked up since the Industrial Revolution, it has still been subject to significant twists and turns. Chart 5 plots UK labour market productivity since 1760, decomposed into the contribution from additional capital per worker (“capital deepening”) and TFP. Both have fluctuated significantly and have made substantial contributions to UK productivity growth over time. 33  Bloom and Van Reenen (2007). 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Chart 6 looks more closely at the historical evolution of UK TFP growth. Trends in TFP have been far from constant, with decadal spans when productivity has averaged little more than zero and others where it has averaged close to 2%.

Lastly, to bring inflation back sustainably to 2% in the medium term, Europe also needs to solve its supply constraints and challenges. 4/4  BIS - Central bankers' speeches
Second, in coming years the implementation of the structural reforms identified in the 10th Development Plan aims to address the structural causes of inflation and hence is expected to support disinflation process. Finally, the Food Committee (the Food and Agricultural Products Markets Monitoring and Evaluation Committee) was founded in December 2014 with an objective of identifying policies to alleviate the contribution of structural and cyclical factors to elevated food inflation. Of course, the credibility of monetary policy is key to achieve price stability. Therefore, let me devote the final part of my talk to explaining our policy strategy to cope with current challenges. Like most EMEs Turkey has also been facing tightening external financial conditions since May 2013 and accordingly introduced several mutually complementary policies and announced a “road map” document back in August 2015 outlining monetary policy, foreign currency liquidity and financial stability related measures.

As a result, stock and flow balances, policy frameworks, and levels of economic confidence and market development in EMEs have strengthened substantially and radically. Stock ad flow balances Since EMEs mostly suffered from sovereign debt crises, fiscal discipline has been the cornerstone of the first generation of structural reforms. Prudent fiscal policies have played a key role in maintaining low budget deficits and hence lowered debt levels to the extent that budgets delivered primary surpluses (Figure 4). Lower interest rates implied by diminished financing requirements of the government sector then further reinforced fiscal positions. As a consequence, the share of government bonds in emerging debt markets has declined and created room for the private sector debt market to grow. Private debt levels in emerging markets have also stayed at moderate levels on average (Figure 4). Declined public debt also implied lower bases for external debt. In addition to this development, EM governments have consciously borrowed less in foreign currencies in the wake of their earlier financial crises. Combined effects have, on average, reduced government owned external debt to GDP ratio from 28 percent at the beginning of the 2000s to 18 percent in 2014. This decline in Eurodollar loans manifests deepened domestic debt markets and hence have reduced the so called “original sin” problem of emerging markets to the extent that foreign investors willing to lend in domestic currency as opposed to hard currencies. It is argued that one of the factors that created economic instability in EMEs is the “original sin” problem.
Banks responded swiftly to this decision of the Bank of Albania by increasing their liquidity. BIS central bankers’ speeches  5  The supervision of the banking system and assessment of the financial system stability show that exposure to credit risk has increased, as a consequence of increased non-performing loans to outstanding loans in 2011. As a result, loan portfolio quality indicator – non-performing loans to total outstanding loans of the banking system – increased by 4.8 percentage points, settling at 18.8%. Nonetheless, stress-tests have revealed that the banking system is resilient to shocks that may come from extreme deterioration of this indicator. Concerning the foreign-exchange risk, the indicator of open foreign-exchange position of the banking system shows a long position at 3.94% to the regulatory capital. Compared with the maximum regulatory threshold of 30%, this figure depicts a low level of exposure of the Albanian banking system to the foreign exchange risk. As regards exposure to interest rate risk, the spread between assets and liabilities repricsed up to three months, accounted for 5.1% of earning assets, which shows a low exposure to interest rate fluctuations at system level. Moreover, during 2011, the banking system performed positively in terms of compliance with new standards and regulations on operational risk management approved over the year. Issues related to transparency and money laundering prevention were an important part of supervision in 2011. To monitor them, a number of examinations on banks and non-bank financial institutions, including bureaux de change, have been conducted.

Ardian Fullani: Albania’s economic and financial developments in 2011 Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the presentation of the Bank of Albania’s Annual Report 2011 to the Parliamentary Committee on Economy and Finance, Tirana, 30 April 2012. *  *  *  Honourable Chair, Distinguished Members of the Committee, Ladies and Gentlemen, *** Before starting my speech, I would appreciate your kind understanding about the fact that the period after the submission of the Report has enriched the 2011’s economic data inventory with new information. It is understandable why this information is not incorporated into the submitted material. In the following, I will address overall economic developments based on the latest information, trying to also identify the differences between the latest data and the version available to you. *** Our annual meeting on introducing Bank of Albania’s Annual Report remains a special pleasure for me. More than a legal obligation, the Bank of Albania considers this Report as an important step to enhance institutional transparency, foster accountability and intensify the dialogue with all economic policy-makers and stakeholders. Let me now start with an overview of main conclusions of the Report. The economic activity recorded positive growth rates, while the macroeconomic balances remained stable or were further strengthened. It should be emphasized that this activity was conducted against the backdrop of deteriorating global economic and financial situation in 2011.
Without appealing to esoteric economic theories of sunspots, these expectations don’t seem sustainable in the current environment. Higher inflation expectations would presumably get priced into higher bond-market yields and higher financing rates generally. Until inflation actually rises – remember, this story has expectations rising first – ex post real interest rates would be higher and that would presumably result in a higher debt burden for borrowers. This would reduce aggregate demand. Lower demand and lower growth would further reduce cost pressures, strongly suggesting that higher inflation expectations would not be ratified by inflation experience, and thus, would not be sustained. Frankly, this story just seems very unlikely. Fourth, another more direct measure of potentially rising costs and hence inflation might be stronger wage growth. The economic story here is a bit involved. Most economic research indicates that rising wages are not a leading indicator of rising inflation, so wages are rarely an early warning signal for future inflation. However, higher inflation would lead to higher nominal wage growth. And the double-digit inflation experience of the 1970s suggests that inappropriately accommodative monetary policy can amplify rising cost pressures, creating a wage–price spiral. Clearly, unsustainably strong nominal wage increases would very likely be symptomatic of rising inflation pressures. In terms of the current situation, there is good news and bad news. The good news is that currently, wage increases are low and not symptomatic of high inflation. The bad news is that, currently, low wage increases are symptomatic of weak income growth and low aggregate demand.

It is not the MPC’s job to control house prices, any more than it is our job to control share prices or the exchange rate; but just as we would not ignore the wider economic effects of a high exchange rate or a boom in the stock market, so we cannot, and do not, ignore the influence of soaring house prices on consumer spending and hence on the overall pressure of demand. Much attention has been paid to the historically high level of house prices relative to earnings, and what this might mean for the future path of house prices. A less discussed question - of more interest to you - is how much influence the current strength of the housing market is having on household spending; and what impact a weakening in the housing market might have on consumers. 2  BIS Review 41/2004  Healthy as household spending has been in the last few years, there has not a consumer boom on anything like the scale of the late 80s, when house prices last took off. Since early 1998, house prices have risen sharply relative to incomes; but household spending has only grown broadly in line with incomes. A buoyant housing market may still have had some influence on spending; and spending and house prices may have been influenced by some of the same factors. But spending and house prices do not seem to have moved together as closely as they have done in the past.
In the current circumstances any deviation from projections could have serious consequences for the credibility of the fiscal consolidation efforts. To ensure strict compliance with targets, monitoring and supervision procedures will have to be strengthened and contingency plans designed to ensure that targets are met and certain expenditure items are behaving adequately. The cooperation of local and regional governments is essential if the ambitious process of fiscal consolidation facing us is to be tackled successfully. The fiscal effort to be made by the Spanish economy, in a situation in which the available projections point to moderate growth, is considerable, and may become even more so if nothing is done to correct the upward path of interest rates triggered by the Greek fiscal credibility crisis and the contagion spreading it to other vulnerable economies. To make this effort feasible, the fiscal consolidation programme has to be accompanied by structural measures designed to strengthen the potential growth of the economy, since this largely determines the sustainability of public finances. In this respect, it is vital to correct the inefficiencies which have grown up in the labour market, since here the required reform will largely determine Spain’s ability to become more competitive and generate employment. Nor should it be overlooked that a relatively significant part of the increase in the budget deficit in the last two years is directly or indirectly related to the rise in unemployment.

The upshot was an unprecedented reduction in investment, with significant effects on the economy’s level of capitalisation. Nonetheless, in late 2009 and early 2010 there was some improvement, especially in household consumption, which began to respond to the major stimulus packages adopted. The slight rise in consumption combined with the positive contribution of the external sector enabled Spain to join in the recovery already under way in other developed countries. The signs of recovery are still very muted and are largely sustained by temporary factors that will tend to peter out in the coming months. The recovery will foreseeably be gradual and take some time to gather the momentum sufficient to generate employment. Accompanying the incipient stabilisation of the economy are certain developments which, while they may be interpreted as the counterpoint of the contraction in domestic demand, contribute to creating conditions conducive to a return to growth. The sharp fall in domestic spending has contributed significantly to altering the dynamics of inflation, the pace of which has clearly slowed to the extent of posting negative differentials with the euro area for most of last year, something unprecedented since the start of EMU. The disinflationary process has continued in 2010 to date, and there have even been falls in core inflation in a setting in which the slowdown in services prices has continued to intensify. It is too early yet to know to what extent this development is in response to a greater sensitivity of cost and price-setting to cyclical conditions.
The surge in inflation rates has become a major challenge that threatens price stability in many countries. I would like to give you a few examples. Between 2006 and 2008, eighteen developing countries have implemented inflation-targeting regime. In 2006, the end-year inflation was within the target band in twelve of these countries. In 2007, this number dropped to five. By May 2008 only one of these 18 countries (Brazil) has succeeded to keep inflation within the target band. In the remaining 17 countries, including Turkey, inflation is outside the target band. Developed countries are also experiencing a similar problem. By May 2008, only in one of the eight developed countries the inflation rate is still within the band – and that country is Canada, by the way. Average inflation throughout the world has increased one-fold to seven percent over the last 12 months. Inflation in developed countries has reached its highest level of the last eighteen years. For the first time in many years, inflation figures of the developing countries are in two digit levels. In this period central banks have adopted different approaches for fighting inflation. One reason of this divergence is the difference between the objectives of central banks. For example, the Federal Reserve Bank of the United States, with ultimate goals of price stability, financial stability and full employment, lowered interest rates by 325 basis points between September 2007 and June 2008 due to severe problems in the financial system.

However, we should also keep in mind that globalization also presents some challenges and thus, it has made the job of policy-makers more difficult. Firstly, I would like to underline the concept of financial globalization. Thanks to financial liberalization and improvements in information and communication technologies, significant amount of capital has been flowing into developing countries, especially to those that offer high growth potential – helping these countries achieve relatively high growth levels. In the post-war period when globalization was not a popular buzzword, high growth rates were also observed in a number of countries, usually in the South Asia. However, these countries had something in common, which was high rates of savings. In countries like Turkey, where more than half of the population is 30 years old or younger and where savings rates are comparatively low; foreign savings, and therefore capital inflows are needed to maintain high levels of growth. In this respect, financial globalization has contributed to the convergence process among countries. Financial liberalization has also led to amplification of new and more complex financial products. As a side effect, these financial products have introduced new risks and fragilities to the financial markets. As financial markets have gradually become more integrated, the concept of financial stability has started to receive more attention and become one of the priorities of central banks.
We also cautioned repeatedly against the positions taken by some Member States – particularly those who traditionally uphold the independence of monetary policy – and ultimately reflected in 2/3  BIS central bankers' speeches  the draft amended text of Article 22 discussed by EU legislators. Under this approach, the ECB would have had no competence over EU CCPs, contrary to its mandate as central bank of issue for the euro, which calls for powers over all euro clearing regardless of its location. The ECB would have been given an exhaustive list of specific and circumscribed powers – replicating the present and future provisions of EMIR II – in respect of some systemic third-country CCPs, as designated by the European Securities and Markets Authority (ESMA). This would have been uncharacteristic and overly granular for the ESCB Statute, which is primary law and gives the ECB broad discretion in the exercise of its monetary mandate, and it would have violated the ECB’s functional independence. This was compounded by a requirement that ECB measures be “in alignment with” legislative acts and measures taken under those acts. Given these grave legal concerns, the Governing Council concluded that the final text seriously distorted its recommendation and interfered with fundamental principles of the Treaty, including the independent exercise by the ECB of its monetary policy. The recommendation to amend the Statute was therefore withdrawn, which is a matter of regret.

Managing a crisis also requires laws and regulations that enable a problem institution to be closed down quickly or managed in some other way. Sometimes it is necessary to take measures very quickly, perhaps even the same day. It is not possible to wait for the usual court process to be completed. To avoid this leading to any form of malpractice, the injured party should have the opportunity to obtain redress and damages afterwards. We had this kind of a law in Sweden during our financial crisis. Another question is when a court should be allowed to stop important authority decisions intended to deal with acute bank problems, such as closing a problem bank. When a bank needs to be closed, a difficult balance arises, between the owners' interests and the savers' interest, which are both safeguarded in law. One very current example of this dilemma in Sweden is the case of Custodia. Both the country administrative court and Finansinspektionen (the Swedish financial supervisory  2  BIS Review 83/2006  authority) have made their assessments on the basis of what they should take into account, that is to say the customers' interests and the company and owners' interests respectively. However, I feel that it is very unsatisfactory that we in Sweden do not have a clear legal framework that can manage this type of situation and I assume that these difficulties will quickly be repaired. Crisis prevention also includes creating sufficiently strong public authorities.
Bank of England  Page 1  Supply matters − speech by Andrew Bailey Given at London School of Economics 27 March 2023  Bank of England  Page 2  Speech It is a great pleasure to be at the London School of Economics. Introduction The past few years have been a time of macroeconomic upheaval. A series of significant economic events have deeply affected the UK economy. This includes the change in our trading relationship with the European Union, the Covid pandemic with shutdowns of some sectors of the economy and supply chain bottlenecks in others, and the rise in energy prices caused by Russia’s brutal war on Ukraine and its people. These shocks have affected the UK economy in different ways. But they have all eroded the terms on which we trade with the outside world. This has made us poorer as a country; manifesting itself in a rise in the prices we have to pay for the things we buy as consumers. UK Consumer price inflation is currently at 10.4%. This is much too high, and we need to, and will, bring it back down to the 2% target. That is why last Thursday the Monetary Policy Committee increased Bank Rate at the eleventh meeting in a row, to 4.25%. We have increased Bank Rate by more than 4 percentage points since December 2021. These increases are being felt by households and businesses across the country.

However, overall economic progress has been below the desired level for a sustainable reduction in unemployment and poverty in Sri Lanka. Sri Lanka’s inflation has averaged 11 per cent in the post liberalization era. This has the adverse consequence of eroding the living standards of people, particularly vulnerable groups such as pensioners, other fixed income earners and the poor. Supply side factors, including sharp increases in the price of oil imports, have contributed to cost-push inflation. Sri Lanka’s vulnerability to the vagaries of weather, and relatively low agricultural productivity have been causal factors. Monetary management has been able to contain demand-pull inflation to a degree. The increase in inflation in 2004 over 2003 was perhaps typical - caused by a prolonged drought in certain areas of the country, a rise in international prices of key commodities, especially fuel, a somewhat higher growth in money supply and an increased budget deficit. Investment and savings ratios have been moderate; not sufficient to raise economic growth to the level necessary to improve the standards of living to the desired degree. Investment improved in 2004 to 25 per cent of GDP. However, a level of about 30 – 35 per cent of GDP is required on a sustained basis over the next five to ten years to improve essential infrastructure, to promote a higher and regionally balanced growth. BIS Review 36/2005  1  The external sector has been developing rapidly since 1977 with a significant degree of export diversification.