samchain/econo-pairs-v1 huggingface dataset:
And so that’s just another factor that maybe tilts the risk to the economy a little bit to the upside. Maureen O’Hara: So, Bill, how about we think a little bit more broadly. You talked about where – it looks like interest rates are going up, at least that’s what, you know… President Dudley: Gradually, right. Maureen O’Hara: What Janet Yellen indicated would happen. There’s this interesting question, though, about will interest rates over the next year go to quote normal levels, or is there a new normal, right? I mean we’ve struggled through how many years now of zero interest rates, and the distributional consequences those have had, is there a “new” normal? Do we have an idea what that “new normal” is going to be? President Dudley: Well I think if you look at what the FOMC publishes, the so-called Summary of Economic Projections, one of the things that they forecast, we forecast, is the long-run federal funds rate, where we think the federal funds rate is going to end up in the long-run. So think five, six, seven years out. And that estimate has come down over the last few years. So what that’s telling you is that people on the FOMC think that the normal federal funds rate is lower now than it’s been in the past. And the idea behind that is a very simple one. One, there’s probably still some residual headwinds left over from the financial crisis that are going to persist for some time.

2  BIS Review 2/2003  markets enhance the ability to manage and trade risk, they are at the heart of modern finance and the backbone of financial innovation. Their development has enabled market participants to hedge risk, develop arbitrage, and, therefore, enhance the efficiency of price setting in financial markets. Of course, the other side of the coin is that derivatives are sometimes criticised as they may be regarded under some circumstances as a potential threat to financial stability. I will come back to this point later on. The elimination of currency risk within the euro area has also had far-reaching effects on the equity markets. This is crystal clear when observing volatility patterns and portfolio allocation methods. As regards volatility patterns, recent developments seem consistent with the predictions of economic theory, where stock prices should reflect expectations of future dividends, interest rates and risk premia. It follows that the introduction of the euro should be associated with a reduction in differences 7 in volatility across markets. Indeed, a recent empirical study demonstrates that those countries whose stock exchanges had a structural high or medium volatility regime, converged towards those with a low volatility regime. From the point of view of the European stock market as a whole, this shows an improvement in global efficiency. As regards investment patterns, sector-diversification strategies have been defined as an alternative to country diversification.
That is because more than $ trillion of assets are held in funds that promise daily liquidity to investors despite investing in potentially illiquid underlying assets.32 In other words, they are built on the lie that markets always clear. To assess the risks of fire sales and contagion across emerging and credit markets, authorities need to gather and share data on asset management. In this context, the FSB expects that consistent and decisionuseful measures of leverage will be developed to support an effective global risk assessment. I would encourage industry to engage with the upcoming IOSCO consultation on this issue. The FSB is also refining its Systemic Stress Initiative to explore how funds and other non-bank financial institutions might collectively act in ways that amplify shocks.33  30  IMF Article IV Consultation for the People’s Republic of China (2018). See Boston Consulting Group estimate of global AUM in Global Asset Management 2018. 32 See FSB Global Shadow Banking Monitoring Report (2017). 33 The Bank of England is working to better understand such dynamics as well. See Baranova, Y., Coen, J., Lowe, P., Noss, J., and Silvestri, L. “Simulating stress across the financial system: the resilience of corporate bond markets and the role of investment funds”, Bank of England Financial Stability Paper, (2017).

Yet efficient market forces ‘should’ eliminate these disequilibria by having wages adjust to ensure full employment always and forever. Monetary Policy is not only a response to these rigidities; it is made effective by them. 9 But economists of a more nuanced persuasion pointed out as far back as the 1950s that this logic is flawed. See Lipsey, R and Lancaster, K (1956), “The general theory of the second best”, Review of Economic Studies, 24(1). 10 Their world imagines self-interested, atomistic agents, coolly calculating odds over all future possible states of the world, writing and trading contracts with each other, all frictionlessly enforced, all achieving mutually beneficial – indeed socially optimal – outcomes. Arrow, K and Debreu, (1954), “Existence of an equilibrium for a competitive economy”, Econometrica, 22 (3). 11 The bankers who played a leading role in developing the credit derivatives market declared “Credit derivatives are a mechanism for transferring risk efficiently around the system” and that defaulted loans that would have knocked a hole in a bank’s balance sheet ten years ago were “now hits that we have spread around the system, and represent tiny blips on the balance sheet of hundreds of financial institutions”, see p99, Tett, G., “Fool’s Gold”, (2009). 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  The impossibility of completing markets was not the only practical problem with the pre-crisis approach.
Since the June forecast the spectrum of risks has changed somewhat; the chances of inflation being higher than in the main scenario are now judged to be greater than the probability of a lower rate. The increased upside risk has to do with fears that inflation will react more quickly to the rising economic activity and that labour market shortages may be more serious and lead to a stronger development of wages. The assessment of an increase in upside risks is accompanied by less likelihood of a slowdown in the global economy. But there is still the risk of international activity being dampened appreciably in connection with a major correction of the high stock market prices and the financial imbalances that have been a feature of the American economy in recent years. Such a scenario would affect price tendencies in Sweden. The risk of financial bubbles, with serious real economic effects if they burst, is something that the Riksbank, along with other central banks, has to heed. Monetary policy In the late summer, at the monetary policy meeting on 12 August, the Executive Board had already noted that stronger economic growth in Sweden and rising resource utilisation pointed to growing upward pressure on prices. That in turn indicated that monetary policy might have to be given a less expansionary direction in the future. Two members of the Board even advocated a small repo rate increase in August.

The main scenario in the Inflation Report that is published today does not represent a future development of inflation that threatens price stability. But every inflation forecast contains an element of uncertainty and the risk spectrum also has to be considered when formulating monetary policy. The present Report concludes that higher inflation compared with the main scenario is more probable than lower inflation. Remember, moreover, that to be most effective, monetary policy has to focus on the situation one to two years ahead. This suggests that the Riksbank is moving towards a situation in which the repo rate will be raised. Yesterday, however, the Executive Board decided in favour of an unchanged repo rate. But sooner or later, if developments continue along the lines in the present assessment, a repo rate increase will be called for. If some kind of international shock with a probable downward effect were to occur, or if indications of more subdued economic activity or prices were to be observed, that would naturally be taken into account in our future assessments. Why a higher repo rate? A repo rate of 2.90% is probably too low over a complete business cycle, even in an economy where inflation expectations have settled down around the targeted rate of 2%. Under such circumstances, the direction of monetary policy can be described as expansionary. This is not countered by a restrictive fiscal policy.
The key challenge for monetary policy authorities - in Switzerland and elsewhere - will be to continue to firmly anchor these longer-term inflation expectations. As I mentioned earlier, notwithstanding high oil prices, circumstances are favorable. Price stability has been all but achieved in much of the developed world. Even developing countries are enjoying relatively low and stable inflation rates. Various forms of credible monetary policy frameworks are anchoring future inflation expectations. Higher oil prices appear to feed through to higher headline inflation more rapidly than in the past but the magnitude of the effect appears to have declined. Finally, the world economy is hardly overheating. Indeed, judging by the OECD’s global leading indicator, the recent growth momentum is abating. Moreover, to the extent that the recent oil price shock is to a significant extent demand driven, dampening global growth will at least to some extent be self-stabilizing with regard to underlying inflation pressure. Compared to the time of the last great oil shock in the late 1970s, monetary authorities operate under a different paradigm to the extent that they can afford to “look through” what are likely to be temporary spikes in headline inflation associated with what is likely to be a demand driven level shift in the equilibrium price range of oil. Indeed, in some cases, monetary policy may find itself in a position to be able to respond to the output loss associated with higher oil prices. “Looking through”, however, must not be confused with being complacent.

On the one hand, the central bank’s legitimacy among the general public could suffer if short-term interest rates have to move sharply, causing output to fluctuate widely while inflation is held stable and exactly on the target. Maximum stability in output could, on the other hand, result in sharp fluctuations in the rate of inflation and erode the credibility of the monetary regime. A point somewhere midway between the two extremes must therefore be found. Let me also stress the importance of central bank independence. In order to be successful with the implementation of an inflation target approach, the central bank must be able to act independently of day-to-day party politics and to set interest rates continuously according to the specified inflation target. Otherwise a credibility problem arises because it will be hard for policymakers to convince the general public of monetary policy’s long-term nature. Lack of credibility, in turn, means that the central bank has to set its interest rates higher than otherwise would have been the case. Looking ahead, I believe there are at least two major questions that central banks have to address more thoroughly. First, how should monetary policy react to asset prices, such as equity and/or real estate prices? We know from history that the development of asset prices can have a significant impact on both inflation and real economic activity.
More recently, the region has woken up to the reality of extremist groups linked to Al Qaeda, using terror to undermine countries and bring about an Islamic state in Southeast Asia. Meanwhile China surged ahead, largely unaffected by the crisis. South Korea launched vigorous reforms, cleaning up its banks and restructuring its chaebols. For a few years, the US economy, with its insatiable appetite for imports, was the world’s solo engine of growth. This helped the region to begin recovering from the blow it had suffered. But then the dot-com bubble burst, and far from the V-shaped recovery confidently predicted by many experts, the US economy has shown persistent weakness, weighed down by high levels of household and corporate debt. These upheavals have taken their toll on the global financial industry. After the dot-com bubble and the crash in global equity prices, finance is no longer a hot industry on the go. Profits have fallen, and bad assets have had to be written off. Deals have dried up, and investment banks are slashing payrolls. The excesses of the boom years are now manifesting as corporate scandals, putting the industry on the defensive, both with the public and with regulators. Singapore’s financial sector has been affected by all these developments. Despite all our efforts to liberalise and grow the financial sector, it only grew by an anaemic 1.1% per annum from 1998 to 2001. Many jobs have been lost. However, these disappointing numbers do not tell the whole story.

Much of the following also applies to Latvia and Lithuania as the other two Baltic countries. To start with, the share of energy and food in the consumer basket is still somewhat higher in our countries than the average in the euro area. This meant that rapid rises in the prices of energy and food in particular consequently had a bigger impact on our inflation readings. Compounding this, price setting has traditionally been more flexible in the Baltic region than in other euro area countries, meaning that both rises and falls in commodity prices are translated more swiftly to consumer prices. Administered prices are also flexible and governments have allowed higher global energy prices to pass through quickly to regulated prices, while governments in some other euro area countries have been more cautious. High energy prices have also passed through to consumer prices in Estonia particularly fast because Estonian households have generally preferred to have flexible prices in their utility contracts. This had been a smart choice in most previous years, but it cost us dearly in 2022. It meant that any price increases in the wholesale markets for electricity in particular were immediately reflected in the prices paid by households. The increases in the prices of electricity that Estonian households experienced in the first half of last year were indeed dramatic.
Copper export earnings, at US $ million, were 7.8% higher than US $ million recorded during the third quarter of the year, reflecting an increase in the average realised price by 6.8% to US $ per tonne from US $ per tonne recorded in the third quarter. In addition, copper export volumes increased by 0.9% to 224,128.6 tonnes from 222,034.6 tonnes. 39. However, cobalt export earnings declined by 1.4 % to US $ million in the fourth quarter of 2010 from US $ million in the previous quarter. This followed a slide in the average realised price by 3.9% to US $ per tonne from US $ 33,467.08 per tonne in the preceding quarter despite a rise in export volumes by 2.6% to 2,308.0 mt from 2,249.9 mt recorded in the third quarter. BIS central bankers’ speeches  5  40. Similarly, non-traditional exports (NTEs) f.o.b. fell by 5.1% to US $ million from the US $ million realised the previous quarter. This was largely due to declines in export earnings from copper wire, cotton lint, electrical cables, fresh fruits and vegetables, petroleum products and electricity. 41. In the period under review, merchandise imports, at US $ million were 15.4% higher than US $ million recorded the previous quarter. A surge in import bills associated with commodity groups, such as, food items, chemicals, iron and steel and item thereof and industrial boilers and equipment explained this outturn. 42.

Mr Roth remarks on the euro and Swiss franc: two sister currencies? Speech by Mr Jean-Pierre Roth, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Swiss Business Association Annual General Meeting, Singapore, 24 February 2000. *  *  *  For more than a year now, the euro has been a reality. It has crowned a decade long process of monetary integration in Europe. The introduction of a common currency in eleven closely related, but independent countries is an unique experiment. It is still too early to assess all the far-reaching implications of this monetary revolution. Therefore, the thoughts and remarks I am going to express today can only be intermediate and provisional. 1. Consequences of the euro for the Swiss economy  Switzerland is not part of the Monetary Union. It is nonetheless deeply integrated in its European environment through its geographic situation and its strong historical, cultural and economic links with Europe. Over 50% of our exports go to countries of the euro-zone, while 70% of our imports come from there. But, besides that, Switzerland has strong traditional links overseas, too. The US, Canada and Japan account for 10% of our imports and 15% of our exports while emerging markets represent 4% and 10% respectively. Although concentrated on Europe, our foreign trade is geographically more diversified worldwide than that of other small open European economies such as Austria, the Netherlands or Belgium.
The cost in terms of reduced government revenues of lowering the rate by one percentage point is NOK 10 billion, while the costs of increasing the basic allowance by NOK 1000 is NOK 0.6 billion. The tax rate for ordinary incomes can for example be reduced from 28 to 26 per cent, combined with an increase of NOK 25 000 in the basic allowance. Another option would be to use the revenues to remove wealth tax and the surtax on higher incomes. There would still be some room left for a reduction in the tax on ordinary income. Monetary policy It costs 34 øre to produce a 50 krone note. But we expect to exchange this piece of paper for larger real values, for example a litre of milk or a loaf of bread. Most of the money we spend is not paper money but online banking figures. We can exchange the electronic figures for baskets of goods from the shop. Norges Bank issues paper money, but is also behind – as the banks’ bank – deposits on accounts in commercial and savings banks. The value of money tends to be taken for granted when we pay our bills, receive wages and plan trips and large purchases, draw up budgets and keep accounts. But if prices rise, money loses value. If inflation varies, the purchasing power of money becomes arbitrary.

The rate of petroleum revenue spending – growth in public expenditure – is important for developments in competitiveness, which is also referred to as the real krone exchange rate, in the long term. But, in the short term the krone exchange rate can vary widely, and it depreciated in autumn 2008 because capital sought safe havens. This helped Norwegian manufacturing in the first phase of the downturn. Since then, the krone has appreciated considerably. In 2009 and 2010, government petroleum revenue spending shows a substantial increase and foreign investment via the wealth fund a decrease. This increases commercial demand for NOK, which directly contributes to an appreciation of the krone. More fundamentally, the krone is influenced by the difference in activity at home and abroad and how fast the interest rate has to be increased in Norway to keep inflation low and stable. The economic geography of Norway will change over the next 10–15 years. The domestic cost level and the real economy crisis abroad will bring pressure to bear on jobs and businesses in manufacturing communities. Job losses may have the most severe effects in areas where manufacturing has the highest concentration. In the ten most typical manufacturing municipalities Vestre Toten in Oppland, Lund in Rogaland, Fusa in Hordaland, Årdal in Sogn and Fjordane, Ulstein, Hareid, Sykkylven, Stordal and Haram in Møre and Romsdal and Verran in Nord-Trøndelag, local manufacturing accounts for more than a third of total employment.
Economic distress may give way to political and social turmoil in Greece, with an unpredictable interplay with the broader dynamic of geopolitical tensions. Any setback in confidence could hurt a still tentative economic recovery in Europe, which will have spill-over effects on the rest of the world economy. 6. We should therefore not be alarmed, notwithstanding the drama of recent days, but we should stay alert and vigilant. Although the risk of a sudden brake in global growth remains low, we are closely monitoring developments and their potential impact on Singapore. 50 Years of Singapore’s Financial Centre 7. This year’s ABS annual dinner also comes as we mark our 50th year of nationhood in Singapore. Our financial centre has been both beneficiary and driver of the nation’s progress over the five decades. 8. We can take quiet pride in how it has evolved, from its beginnings in the financing of merchant trade with our neighbours, into a well-diversified, vibrant and widely respected centre of Asian and global finance. 9. It was never a given that Singapore would be a major financial centre. We started at a time when Hong Kong had a major head start, as the Asian outpost of the City of London. There was no natural reason why a broad range of global financial institutions and services had to be located in Singapore, a small island state separated from its Malayan hinterland. 10.

The development of a strong core of Singaporean leaders in finance, working in diverse global teams, will define our continued success as a financial centre. MAS takes this very seriously. BIS central bankers’ speeches  5  44. We have in recent years introduced several initiatives to promote the development of Singaporean leaders in the financial industry. •  The Finance Associate Management Scheme (FAMS) offers promising young professionals exposure to different aspects of a financial institution’s global operations and mentorship by senior leaders. •  The International Posting Programme (iPOST) has supported more than 35 overseas postings of Singaporeans in finance since its launch in 2013. They have acquired valuable practical experience in diverse working cultures over their 6 to 24-month attachments to regional and global offices of financial institutions. Asian Financial Leaders Programme (AFLP) 45. To further strengthen these efforts, I am pleased to announce the launch of the Asian Financial Leaders Programme (AFLP). •  The AFLP will take advantage of Singapore’s strong and expanding linkages in the region, including ASEAN, China and India, and aim to strengthen those links through leadership development. •  It is aimed at equipping finance professionals aspiring to C-suite roles with the knowledge and capabilities to operate effectively across diverse business, regulatory, and legal environments. •  Participants will be given the opportunity to learn from and interact with top policymakers from the region and to also build networks with fellow financial sector leaders.