samchain/econo-pairs-v1 huggingface dataset:
On the supply side, the weakness in activity passed through to all productive branches, but with particular force to construction and industry. Employment was rapidly eroded following fourteen years of uninterrupted job creation. In late 2008 and early 2009, job destruction was most intense and, since the labour supply remained notably strong, the unemployment rate surged to 17.4% in the first quarter of the year, bearing down most on the young and the lesser skilled. 4  BIS Review 79/2009  Regrettably, this high unemployment figure shows that one of the risks I referred to when presenting the Annual Report for 2007 has materialised. I insisted then on the need to prevent the adjustment of the Spanish economy from falling predominantly on employment, as in previous recessions, since that would have significant adverse multiplier effects on demand and activity, via disposable income and future income expectations. And as stated, this is proving precisely to be one of the most powerful channels for the propagation of contractionary trends. One of the traditional behavioural patterns of the Spanish economy is thus recurring, revealing the persistent weaknesses in its institutional framework and arrangements that must be corrected. The high increases in labour costs witnessed last year, reflecting the rise in inflation in the first half of the year, were not favourable to employment. Wage cost pressures have only begun to abate in 2009, in line with improved inflation expectations, following the declines in the rate of change of the CPI in recent months.

Hence my interest in the collaborative efforts of the business, academic and health sectors to further economic growth. These efforts capitalize on the strengths of the region and may well be a good way to further economic development not only in Syracuse but in Buffalo and Rochester as well. Each metro area has a strong university, a strong health sector and a business community all eager to find ways to leverage local assets and boost economic development. Looking forward, I believe that the colleges and universities in Syracuse will help drive the region’s economy in the years to come. Syracuse can build on these assets by continuing to make partnerships between industry and higher education a high priority. When companies and universities work together, they can become a powerful engine for innovation and economic growth. These collaborations are a key ingredient to helping improve the competitiveness of local businesses, the universities themselves, and their regions, and we should take every opportunity to exploit these partnerships as much as possible to unleash their full potential. College graduates finding jobs Let me finish off by saying a few words about the value of education. There is no doubt that the Great Recession and sluggish recovery that followed has made it difficult for many people to find jobs. I’m sure many of you here today are worried about finding a good job after you graduate, and you may be wondering whether going to college will turn out to have been a good investment.
That revolution has come in the area of external communications, openness and accountability. It came neither quickly nor easily. It was only a generation ago that, when asked by Mervyn King for a one-word piece of advice, Paul Volcker replied “mystique”. To that point, opacity rather than transparency coursed through central bankers’ veins. That bloodline ran from Montagu Norman a century ago (“never explain, never apologise”) through to Alan Greenspan a generation ago (“I’ve learned to mumble with great incoherence”). Historically, the case for central bank secrecy was deeply rooted. It rested in part on custom and practice, in part on theology. Central banks historically were rarely subject to external scrutiny, at least by the general public. And central bankers were generally perceived as the high priests of finance. It was said that central bankers, like faith, were better understood by their deeds than by their words. 2  That was just as well because central bankers rarely uttered any words at all. A century ago, public utterances by the Governor of the Bank of England amounted to one after-dinner speech each year to a well-watered set of City of London bankers. Heroically, attempts were made by some academics to rationalise this monetary mystique as a necessary means of central banks exerting influence over the economy. 3  Times have changed. The central bank secrecy doctrine has been over-turned, in part for conceptual reasons, in part for practical ones.

For reasons set out earlier, it has probably also increased the chances of self-reinforcing and self-referential waves of collective irrationality taking hold. 35  If  so, these waves of collective irrationality could be becoming larger than ever. While a vestige of our hunter-gatherer past, the madness of crowds can these days spread to a global village. That leaves us with a conundrum. If decision-makers in complex environments were to draw on a wider set of non-expert opinion, what are they likely to encounter? Is it a case of harnessing the wisdom of crowds or avoiding their madness? Will greater public engagement help inform and improve expert decision-making by widening the pool of lived experience? Or will it hinder that decision-making by polluting the information pool with irrational or irrelevant opinions? Perhaps the most comprehensive study of the value of expert and non-expert opinion, as it applies to complex decision-making in the social sciences, has been provided by political scientist Philip Tetlock. Over a more than 20-year period, he has researched forecast accuracy and, most recently, run The Good Judgement Project. This explored the performance of a set of experts and non-experts in forecasting the outcome of a particularly complex set of decision problems. So what does Tetlock’s evidence suggest? That the usefulness of non-expert opinion in complex decision settings depends on how exactly this information is drawn in and drawn on. From Tetlock’s book with Dan Gardner in 2015, Super-forecasting, I would highlight two key findings.
They are reinforced by economies of scale that benefit large financial companies gathered together in a few locations. One such example of a financial centre is London. Mortgage institutions with standardised products independent of distance to customers and borrowing in an international capital market ought to be activities that can profit from these cluster benefits. The concentration trend that we have been able to perceive over the past 15 years among Swedish mortgage institutions demonstrates that these are also following this structural trend. 4  BIS Review 15/2003  Challenge 2 - International regulations One of the intentions behind the EU's internal market and the introduction of the euro is to create a more efficient market for products and services in which competition increases and customers obtain better products at lower prices. One aspect of this is the EU's Financial Services Action Plan that is to be realised by 2005. The Plan contains 42 measures that aim to remove remaining obstacles to cross-border trade in financial services and to promote financial integration in the EU. At the same time, measures are been taken to support the supply of risk capital in the EU. These action plans will help realise the vision of making the EU the most competitive, knowledge-based economic area in the world by 2010. Three-quarters of the measures in the Financial Services Action Plan have already been decided. This will also affect mortgage institutions, as they are major participants in the markets for both lending and borrowing.

As well as potentially helping to broaden the range of investors, the STC criteria should make risk transfer more robust. And third, to help regulators. Setting risk sensitive capital requirements for securitisation tranches is challenging. One solution is to use credit ratings but the shortcomings of that approach were exposed during the crisis. Another is to use a regulatory formula capturing dimensions of risk such as the credit quality of the underlying pool, tranche seniority and maturity. In our view, including a differentiation based on STC in that capital calculation helps to capture other important dimensions of risk related to structure, transparency and governance. Because one of our objectives is to broaden the investor base, it is important that the STC designation makes things simpler for investors, particularly non-banks. For example, they should be able to place greater reliance on it when conducting their own due diligence on matters covered by the STC criteria, such as risk retention. Investors would thus be in a position to concentrate with more confidence on other, existing due diligence requirements, such as in relation to the creditworthiness of the underlying assets and cash flows characteristics. The implementation process for the STC designation is therefore important. In our view, the primary obligation should be on the originator to attest compliance with the criteria. But this needs to be in the context of a regulatory regime with effective supervisory oversight and sanctions. We must also be careful not to label all non-STC transactions as “bad”.
Today, I’ll start by talking about the broad range of innovative responses people within the Fed and other public sector institutions devised to restore confidence in part by providing liquidity, capital, and information during the chaos of 2008. Next, I will focus on some of the fundamental changes that have been implemented in the wake of the crisis. In my opinion, those changes go a long way toward making financial institutions and the financial system overall more stable and resilient. We should also recognize that, notwithstanding their increased resiliency, one or more firms will fail at some point in the future. It is imperative for US law to have an avenue to handle such a failure, and without systemic consequences. Finally, I will address some more recent legislative proposals to amend post-crisis reforms, emphasizing proposals relating to the orderly 1/6  BIS central bankers' speeches  failure of major financial institutions. Disorder and the unprecedented steps to right It I will start with the obvious. The crisis caught the world off guard. Many have argued that the crisis should have, would have, and could have been predicted and averted. Others have claimed that bubbles are inevitable and that regulators should principally focus their time and attention on cleanup and mitigation rather than avoidance. I will not engage here in that debate. From my perspective, prevention and cleanup are not mutually exclusive. Indeed, in exploring how to survive a crisis, you inevitably think about how to avoid it.

In fact this is not so different from what we have done before. Although we have always decided on asset purchases for a 3 or 4 month period at a time, we have often rolled into further purchases. The total amount is only decided – and then only temporarily – at the point we stop! So we could contemplate a rather longer horizon for asset purchases, even if we continue to cautiously decide on a few months at a time. BIS central bankers’ speeches  7  The majority of the MPC took a view in February not to make any more purchases. I accept that there was a good case to be made for that position, even if on balance I took a different view. But I think we need to keep under review whether there is merit in undertaking more asset purchases under a slightly different dynamic approach. Indeed the February meeting Minutes made it clear that the Committee will keep all its options open. Funding for lending Finally, I want to turn to our most recent approach to credit easing. The Funding for Lending Scheme (the FLS) was launched in 2012 jointly with HM Treasury after we saw that interest rates being charged to borrowers had been rising at a time when our asset purchase programme should have been bearing down on market rates. The principal reason for rising lending rates was that bank funding costs were being kept high by the continuing crisis in the euro area.
Calculated in the same way, halving registered unemployment from 8 to 4 per cent, for example, would confer an estimated long-term gain in production of 4 per cent of GDP and strengthen government finance by as much as over SKr 50 billion a year. Simple calculations of this type are obviously uncertain but they do serve to illustrate the sort of economic benefits that may be reaped from an appreciable fall in unemployment. What can the Riksbank and monetary policy do? There was a time when many people believed that the problem of very high unemployment could be tackled with a generally expansionary economic policy. Lower interest rates, devaluations or fiscal stimuli were seen as instruments for boosting demand, raising production, improving employment and thereby lowering unemployment. Even today, advocates of similar views are not uncommon. As the consolidation of the budget places constraints on fiscal policy, attention concentrates on monetary policy. Representatives of this line argue that the problem of unemployment could be solved if only the Riksbank had a wider objective than combating inflation. Some say that the Riksbank ought therefore also to have explicit goals for growth, employment and unemployment, goals that should be as important as keeping inflation under control. You will hardly be surprised to hear that I do not share such opinions. The current situation in the labour market is more complicated than that.

One of the few countries here that has managed to turn the employment curve upwards from the mid-1980s is the Netherlands, as shown in Diagram 3b. In the course of a decade unemployment has been virtually halved, from 12 to just over 6 per cent. One factor behind this is a very moderate real wage rise, so that employment has risen on this account. The labour market has probably become more adaptable. Another phenomenon in the Netherlands is an increase in part-time employment; this probably reflects a change in labour demand but also a shift in supply. The case of the Netherlands shows that the employment trend can be turned. This indicates, in my opinion, that in the current discussion in Sweden about a new model for wage formation, the prototype ought not to be Europe as a whole. If the average real wage rise in Sweden were to match the rate observed in Europe in the past quarter-century, it might make a reduction of unemployment more difficult. The model should rather be the Netherlands. The pattern in Sweden resembles that for the EU area. In the period as a whole employment has hardly changed. As in Europe in general, real wages have risen relatively strongly, though the trend has been held back by a series of devaluations that pushed inflation up, presumably with a negative effect on production.
As to other economic policies, these were subject to even laxer oversight procedures, and proved worthless in redressing other imbalances. The list of structural weaknesses in the area’s governance framework would not be complete without mentioning the failure to design any crisis-management mechanism capable of making a rapid and forceful response in the initial stages of tensions, preventing the problems from becoming protracted and untreatable. These shortcomings in the original design of Monetary Union have played an increasingly greater role as the crisis has advanced. Currently, investors have become fully aware of the particular fragility of the euro area countries’ sovereign debt markets, which differentiates them substantially from the debt markets of other developed countries with their own currency and central bank. I refer, naturally, to the fact that the euro area combines a single central bank and single currency with 17 independent States and, therefore, 17 different sovereign risks. Under these conditions, the well-known mechanisms that countries with monetary sovereignty have to counter potential liquidity problems on their national sovereign debt markets are blocked by the fact that the action needed would entail some transfer of income between States, action that the institutional arrangements of the euro area not only do not envisage, but which, it is assumed, must be avoided.

Elsewhere, the new framework for the prevention and correction of domestic and external macroeconomic imbalances has also been designed. This so-called Excessive Imbalance Procedure uses an early-warning mechanism based on a broad set of indicators which, together with timely economic analysis, should help detect sufficiently in advance those situations of vulnerability that may endanger financial stability in the euro area and give form to the measures needed to correct them. Progress in designing a permanent crisis-management mechanism has been considerable but clearly insufficient. First, temporarily, the European Financial Stability Facility was introduced, and later, now on a permanent basis, the European Stability Mechanism was set up, which it is assumed should start operating next July. The complexities involved in the design of these devices are evident, since they must combine strength and flexibility to provide financial assistance to ailing countries, while ensuring that incentives are maintained to pursue the ambitious fiscal consolidation and structural reform programmes needed for laying the foundations for sustained growth in the medium term. 4  BIS central bankers’ speeches  But exiting the crisis will not be possible unless a stronger European governance framework is accompanied by a far-reaching revision of national economic policies, enabling them to be fully adapted to the conditions under which a monetary union can operate. It is imperative that the authorities and economic agents should fully assume the consequences derived from sharing a single monetary policy. The soundness of public finances and the flexibility of economic structures are vital requirements in this framework.
The most important lesson from past experience is that, whatever the number turns out to be, it is foolish to put much weight on any one month’s figure, especially at Christmas. There are two reasons for being particularly careful about the interpretation of data for retail sales in December. First, the figure that will be published by the ONS tomorrow will be dwarfed by the seasonal adjustment that is applied to the recorded data. That adjustment changes from year to year, often leading to revisions of the figures for earlier years. Typically retail sales in December are around 20% higher than in November. So even small errors in the estimate of the seasonal pattern of sales imply large errors in the estimate of the seasonally adjusted figure. As a result the monthly data can be volatile and little economic significance should be attached to the number for any one month. Second, retail sales are only part of household spending, around 40% or so. It is quite possible, indeed likely, that spending on services, such as leisure and holidays, behaves rather differently from sales of goods on the high street. So retail sales are not always a good guide to movements of consumer spending as a whole. For those reasons we should recognise that the true meaning of the Christmas story will not be revealed until Easter - or possibly much later. The Monetary Policy Committee is more concerned to discern the meaning of the path of consumer spending over a longer time horizon.

As early as November 1973, at the Conference on Managers in a Changing Hong Kong Environment, Sir Philip spoke on, amongst other things, the role of public policy. He said that, “the Government must accept such responsibilities as are necessary to ensure that management decisions are not frustrated by imperfections in the operation of the market mechanism, leading to economic inefficiency or social distress which only the Government can remove.” In September 1979, he talked about interventionism and the adjustment mechanism, amongst other things, in a speech on the Hong Kong Economy in Transition. He said that: “A pragmatic view dictates an admission that interventionism can be relevant to the maintenance of economic stability in Hong Kong even in the general context of a philosophy of positive non-interventionism”. In the same speech he cautioned against taking for granted the “efficiency with which [the] essentially automatic adjustment mechanism operates in restoring equilibrium”. He then went on in the same speech to identify areas that could be collectively referred to as market imperfections which justifies market intervention. BIS Review 67/1998  -2But it was the speech he made to the Federation of Hong Kong Industries in December 1980 (and as Principal Assistant Secretary for Economic Services then it was my honour to have a hand in drafting part of the speech) in which he made abundantly clear his stance on the policy of positive non-interventionism. Here I quote two paragraphs of his speech in full.
Considering the effects of Omicron on the economy in the first part of the year, I expect real GDP to increase around 3-½ percent this year. While this is not quite the blockbuster growth we saw in 2021, it is still well above its long-run trend and supportive of continued improvement in the labor market. Of course, experience has taught us not to be overly confident in predictions about COVID and its effects on the economy, and uncertainty around the economic outlook remains high. The Labor Market Now I’ll turn to the employment side of our mandate, where the picture improved dramatically over the past year. About 6-1/2 million jobs were added last year, and the unemployment rate plummeted by 2.8 percentage points. In fact, with the unemployment rate now at 3.9 percent, we have retraced 96 percent of the COVID recession rise in less than two years. This is lightyears faster than the more than seven years it took for unemployment to retrace to the same degree after the global financial crisis. With the economy registering solid growth, I expect the unemployment rate will continue to come down further to 3-½ percent this year. The strength in the labor market is seen in a wide variety of indicators, including job openings, quits, and wage growth. The labor market has been especially robust in recent months for workers at the bottom of the wage distribution. And female labor force participation and employment have improved, especially for women with young children.

Given these goals, my focus is to study and understand the wide range of developments that affect employment, unemployment, and inflation as they play out in real time. As we start a new year, it’s worth highlighting the key economic developments of last year, which were defined by a very strong recovery, both here and abroad. Although we don’t have all the data yet, I expect that U.S. inflation-adjusted, or real, gross domestic product (GDP) increased by 1/3  BIS central bankers' speeches  about 5-1/2 percent last year, which would be the strongest growth rate between fourth quarters in over 35 years. The economic snap-back here and abroad has led to global supply-chain bottlenecks and imbalances between supply and demand that have contributed to a sharp rise in inflation. Inflation in the United States, based on the personal consumption expenditures price index, will likely exceed 5 percent in 2021, and inflation rates are elevated in many other countries, too. Looking ahead, I expect the current Omicron wave to slow growth in the next few months as people once again pull back from contact-intensive activities. I also expect that the Omicron wave will temporarily prolong and intensify labor supply challenges and supply-chain bottlenecks that we have been experiencing. Current staffing challenges for essential service workers in the healthcare, transportation, and education sectors will likely have a ripple effect too. But, once the Omicron wave subsides, the economy should return to a solid growth trajectory and these supply constraints on the economy should ebb over time.