samchain/econo-pairs-v1 huggingface dataset:
As a Committee, we discussed at some length during the spring of this year why the changes in the quantity measures had not fed through to higher earnings growth. We discussed whether the natural rate of unemployment (and the NAIRU) might have declined due to an increase in trend productivity or improvement in the functioning of the labour market. We also considered whether there had been independent influences on the NAIRU stemming from falls in inflation expectations or the effects of sterling’s appreciation. It is against this background that the MPC’s decision to raise rates in June should be seen. The increase in headline earnings growth to 4.9% in February, from an upwardly revised 4.6% the previous month, appeared consistent with other labour market indicators. But we were fully aware of the evidence suggesting that the rise in earnings growth had been, and for a couple of months would continue to be, affected by unusually large bonus payments. If this was true, earnings growth might well have fallen back once the bonus effect had dropped out. Given the uncertainties in this area, the Committee concluded that it should not place too much weight on the latest numbers. Instead, it stepped back and examined the underlying trend in the labour market over the previous two years. We noted that private sector earnings growth had been rising throughout this period and that reported wage settlements displayed a similar profile.

Such long lags in the dynamics of the labour market mean that there is unlikely to be a simple relationship between deviations of unemployment from its natural rate and changes in the inflation rate. Chart 1 shows that it did indeed take almost 20 years to bring inflation and inflation expectations (implied by financial market returns on indexed and conventional gilts) down from double-digit levels to the current target of 22%, accompanied by a large rise and subsequent fall in unemployment. The idea of the NAIRU can be thought of as a conceptual response to inertia in the system which means that the response of the economy to shocks will be protracted. In 1975 Franco Modigliani and Lucas Papademos introduced the concept of the non-inflation rate of unemployment – the NIRU – defined as “a rate such that, as long as unemployment is above it, inflation can be expected to decline”. Note in passing that more appropriate terminology would be the nonincreasing inflation rate of unemployment (NIIRU). Modigliani and Papademos recognised that the NIRU would be affected by macroeconomic shocks. They argued that there was evidence to suggest that “over the last two decades the NIRU [in the US] was held down by a favourable trend in the terms of trade between the private nonfarm sectors on the one hand and imported goods and farm products on the other.
During the 1970s and 1980s, average inflation was almost in double figures and varied substantially from year to year (see Figure 1). Sweden was a country without a nominal anchor. There was no credible level for inflation that price setting and wage formation could use as benchmark and the economy was stuck in a devaluation cycle. This was a fundamental problem that the Swedish economy was suffering when it entered the 1990s crisis. We came out of the crisis with a whole new monetary policy regime – inflation targeting. This policy was relatively untested internationally and it was far from clear that it would work. Such doubts may seem surprising today, bearing in mind how natural an inflation target is now and how inflation expectations are stably anchored around the target. And this, in turn, reflects the most important contribution from inflation targeting – in my opinion its main merit – that it has functioned as a nominal anchor for the economy for two decades (see Figure 2). The reform of the monetary policy framework was not the only important change in the Swedish economy following the crisis at the beginning of the 1990s. However, the inflation target is definitely one of the most important explanations for inflation being on average around 7 percentage points lower during the two decades following the crisis, compared with the two decades prior to the crisis. In addition, inflation has been much more stable.

Per Jansson: Perspectives on the Riksbank’s monetary policy Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at the Centre for Business and Policy Studies, Stockholm, 7 June 2013. * * * Nowadays one can hardly open a newspaper without seeing headlines about the Riksbank. Many have opinions about the monetary policy we have conducted in recent years, and the one we are conducting now. The opinions differ in nature. The Riksbank has conducted the monetary policy we consider best balanced to attain the inflation target and create conditions for long-run sustainable growth. However, some analysts have not shared the Riksbank's view of economic prospects and have therefore reached slightly different conclusions as to how monetary policy should have been designed. Of course, this type of difference of opinion is not particularly remarkable in a field such as monetary policy, where decisions necessarily have to be based on assessments. But there are also other objections that are more a matter of principle and aimed at the very way the Riksbank conducts its policy. Although it is not always stated explicitly, the message is that the Riksbank is conducting a policy other than the one it is intended to conduct – that, to put it drastically, the Riksbank has misunderstood its task and is "playing by its own rules". It has been claimed, for instance, that the Riksbank has a tendency to be over-zealous in combating inflation and to care too little about unemployment.
One side effect of this is of course that outstanding government bonds can become very much sought after, and nowhere is this more true at the moment than in our own market. But I think a much more significant change will be to encourage corporate issuers to take up the slack, as it were, and fill the resulting hole. Europe does not yet have a corporate bond market to compare with the US market, but I think the current situation in the markets, with reduced government issuance, the opportunities afforded by Monetary Union and growth of the private pension industry in continental Europe, all combine to provide a very promising environment for the establishment of a genuine European corporate bond market. Secondly, the electronic revolution will continue to gather pace. There are those who wonder if all the hype about dot.com this and e-that is overdone, and certainly some of the current IT stock valuations seem to build in expectations not readily captured by traditional valuation methods. But in the financial markets, I think if anything the effect of the electronic revolution will exceed even the boldest predictions. I am told that there is at least one major securities house which is assessing the ongoing viability of each of their current functions in a future where both data storage and data transmission are characterised by infinite capacity and zero cost.

1 Forbes  (2017) www.forbes.com/sites/cbovaird/2017/08/27/cryptocurrencys-total-market-cap-has-risen-nearly800-this-year/#7e89e36b67c7. 2 www.juniperresearch.com/press/press-releases/cybercrime-cost-businesses-over-2trillion. 3 RM2.5 trillion (USD633billion). 4/4  BIS central bankers' speeches
Such information, and a minimum level of forecasting capabilities, are in fact necessary for the fulfilment of all the tasks of a central bank, particularly for the maintenance of financial stability and the formulation of monetary policy. Central banks of accession countries will therefore assume statistical reporting obligations towards the ECB as soon as they become members of the ESCB, that is upon EU accession, although these obligations are less onerous than those which apply to euro area members. This future obligation should not pose any difficulty for the Central Bank as the existing legislation already gives it the power to access information directly and to publish it. In addition to these enabling powers, however, the Bank must also be equipped with the necessary technological and operational infrastructure and communication facilities to enable it to receive  BIS Review 8/2003  3  information from reporting agents and to forward it to the ECB. It must also ensure that the relevant information follows the agreed methodology. Recognising this future obligation, the Central Bank almost three years ago established a broad-based representative committee to identify the changes required in the way monetary and financial statistics are classified and reported. This work has been completed and the reporting forms have been updated accordingly. To facilitate the collection of this information, moreover, a common database is being established between the Bank and the Malta Financial Services Authority.

4/5  BIS central bankers' speeches  Financial cycles have become increasingly important. I think that our framework has strengths that we should preserve. Central bank independence is increasingly coming under attack around the world – not just in the United States, but also in Italy, for example. How much does that worry you? The independence of central banks is of key importance and should not be called into question. Whatever the criticism may be, every other regime in which the central bank is closer to the finance ministry is much worse than the current system. But not everybody seems to agree. There may be populists who dream of something different. But most politicians are very conscious of the need to keep monetary and fiscal policy separate. Any other approach can quickly turn dangerous. 5/5  BIS central bankers' speeches
In the case of services, European Commission studies suggest that full implementation of the Services Directive would deliver significant productivity gains and growth potential. Efficiency gains may also be achieved through the creation of a single energy market. Regarding the free movement of persons, we should be aware of the risk of the spread of an uncoordinated response that may ultimately fragment the Schengen area. The introduction of reforms and deepening of the single market are clearly crucial to achieve the structural convergence needed to improve the functioning of the euro area and make further progress towards a more robust monetary union. Our aim is to achieve sustainable activity and a recovery in employment, while maintaining the essential bases of the welfare state which is naturally one of the pillars of the construction of Europe. Clearly the result of the referendum held on 23 June in the United Kingdom is a major setback along that road, with consequences for the medium and long term that are still difficult to gauge but which, in any event, obliges all of us, economic agents, citizens and governments to reflect on the future of the European Union and its governance. In light of the uncertainties unfolding in this new scenario, it is now more important than ever to achieve sufficient and sustainable economic growth that will boost income and employment. The message reiterated by the ECB over the last two years at least is that monetary policy cannot be the only economic policy instrument.

In this connection, it is advisable to specifically monitor the segments at risk and, if necessary, activate macro-prudential measures. The third and last comment relates to the effectiveness of the measures adopted by the ECB over the last few years. Our latest Annual Report specifically devoted a chapter to analysing this matter. The Banco de España’s analysis concludes that monetary policy has contributed decisively to easing the credit conditions of euro area households and firms, improving the conditions of access to and cost of bank credit and significantly reducing the degree of financial fragmentation reached during the sovereign debt crisis between 2011 and 2013. Bank lending rates have reached record lows. Surveys on access to financing by small and medium-sized enterprises, which are highly dependent on bank credit, reveal that these firms have benefited particularly from the improved credit conditions. Our estimates suggest that the package of monetary policy measures adopted by the ECB Governing Council since mid-2014 has had a cumulative effect in 2015–2016 for the whole of the euro area of 1.4 percentage points on GDP and of 1.2 percentage points on prices. These figures are similar in Spain. However, these positive results cannot give rise to complacency. The risks of de-anchoring of inflation expectations remain a cause for concern. It is true that the sharp fall in oil prices since mid-2014 has exerted downward pressure on inflation, but it is no less true that weak domestic demand has played a vital role, keeping core inflation below 1% over the last two years.
The MPC had decided to reduce the window over which it averaged UK asset prices in order to construct the conditioning assumptions for its forecast in order to exclude the peak of the market turmoil that had emerged at the end of September and early October. The MPC had delegated responsibility for judging whether markets had become dysfunctional and the operational decisions about pausing QT auctions to the Bank Executive. In particular, Sir Jon Cunliffe’s letters to the Treasury Select Committee (Cunliffe, 2022a,b) and a recent speech by Andrew Hauser, the Bank’s Executive Director for Markets (Hauser, 2022) offer a detailed account of the context and character of recent operational decisions. e.g. in Pill (2010) and Pill (2019). See: Busetto, et al. (2022). See: e.g. Hauser (2021). See Pill (2022). The Bank’s Financial Stability Reports have regularly discussed the risks faced and posed by the NBFI sector, in particular in the aftermath of the so-called ‘dash-for-cash’ episode in March 2020. As reflected in the subsequent discussion, in the Bank of England context, while the responsibility for setting Bank Rate lies wholly with the MPC, the responsibility for conducting asset purchases for purposes other than monetary policy lies elsewhere, likely with the Bank’s Executive.

This is the focus of the related field of “behavioural economics” and the work of the Nobel laureate Robert Schillervi. Page 7 of 14  To respect the mandate entrusted to us under the Treaties, one thing remains certain: in the face of the too-low level of inflation caused by the cooling of the economy since the end of 2018, it is our duty to maintain an accommodative monetary policy to support economic activity. In September last year, the ECB thus announced a package of measures, the most innovative of which is the reinforcement of its forward guidance which gives visibility as to the future path of short-term rates. However, at our December meeting we noted the first signs of an economic stabilisation, consisting in a relative reduction in trade-related uncertainties. If this stabilisation is confirmed, it would need to be followed by a stabilisation in monetary policy. Put another way, the low point observed in growth justifies rates that are “low for longer”, but not, at the present time, “lower for longer”. II. Low rates: what are the effects? 2.1  Effective policies to support inflation and the economy  While these accommodative monetary policies are justified by their causes, are they also effective in terms of their impact? Here too, we need to take stock, both on an overall level and for each category of economic agent. From a macroeconomic perspective, low rates and, more broadly, accommodative policies, have indeed lent support to the economy.
At the same time, I do not think that a relatively similar development in interest rates in Sweden and the euro area in recent years is sufficient argument against the need for a national stabilisation policy. While it is true that the instrumental rates have developed similarly to one another, which I believe will also be the case if we remain outside the Eurosystem, the point of a national stabilisation policy is not to fine-tune a relatively normal level of economic activity, as we have experienced in recent years, but to manage situations where Sweden for some reason deviates from the course pursued by the rest of Europe. Such a situation cannot be completely ruled out. The task we face if the result of the referendum is a “yes” vote is to make use both of other countries' experiences and our own from the past ten years and to translate these into an appropriate regulatory framework for fiscal policy. The changes in budget policy, with a long-term expenditure ceiling and a budget surplus target, form a natural starting point. It is quite simple. There should be sufficient reserves for the central government to be able to bear a deficit for a period if the economy were to deviate significantly. This requires first and foremost that the central government debt be further amortised, which is a desirable goal in any case. If these reserves are available, one can be fairly sure that they will be used in a crisis situation.

We are both children of the successful German central bank, the Bundesbank. We have sprung from the same intellectual model, where the target is price stability, the management are appointed by the political system and the actual work is done at an arm's length from party politics. ·  In my opinion, the value of conducting a national interest rate and exchange rate policy is exaggerated in the EMU debate. On the other hand, it is conceivable that situations might arise where strongly stabilising fiscal policy measures are necessary. It would then be necessary to find institutional solutions to help the government and parliament to make the necessary long-term decisions and to do so even in situations where they may be politically difficult and even risky. Here I think it is possible to draw on some experiences of the Riksbank's actions in recent years. Clear targets, transparent analyses and discussions, combined with regular assessments, can put pressure on the political system to take action in time. ·  4  As representative of the Riksbank, I have been able to experience at first hand the closed doors to the meeting rooms of Europe and the fact that we have lost influence. During the early years, when the ECB was being built up, we sat at the decision-making table.
Fiscal policy has no room left for expansion due to the size of their debt, and monetary policy is already in the lowest possible interest rates. The emerging world – Chile included – faces a different challenge: how to prevent our economies from expanding above trend. Luckily, as an outcome of our own actions, we have the policy tools to deal with this scenario. At the same time, in case of a further deterioration of the global economy, we have a sufficiently flexible monetary policy to mitigate its effects on our domestic economy and preserve the necessary equilibriums for sustainable improvement in the welfare of the population. Our task consists, then, in properly managing the policies and safeguard said equilibriums. Therefore, and taking into account the risk balance we face, the most advisable thing to do is to continue withdrawing the monetary impulse. The timing of these changes will be analyzed at each meeting, including pauses to assess the effects on the economy of adjustments already made. Accordingly, as it has done in the past, the Board will adopt every necessary measure to deal with events that reshape the macroeconomic scenario and inflation prospects. Inflation is an  6  BIS central bankers’ speeches  evil that hits hardest the people with less income. Despite reduced risks of a significant increase in inflation, we must remain on the watch for pressures incubating that might obstruct the convergence of inflation to the target and that, ultimately, impose higher costs to the society as a whole.

Conclusion There are clearly several good reasons why sound regulatory and oversight practices remain vital for the stability of our financial system and why, therefore, the Central Bank of Malta and the MFSA must work more effectively together. It is also evident, however, that on their own these two institutions cannot provide full protection against systemic disturbances, and that the modalities for co-operation which are in place locally need to be strengthened further and extended to other bodies with comparable responsibilities at the international, and particularly at the EU level. 3  ECB. 2002. Financial Sectors in EU Accession Countries. BIS Review 50/2004  5
For example, reduction in fossil fuel use may lead to significant trade-offs with growth and poverty reduction objectives, particularly in the short to medium-term. Targetting sustainable growth and development amidst capacity and funding constraints can thus present significant challenges for political leadership, economic priorities and social outcomes. In this context, given the higher cost of transition, the country may need a longer time to transition towards more sustainable growth policies. This may however result in delayed actions which would heighten physical risks. For the Bank, given the importance of financial inclusion, this could also involve placing different priorities on the impact of climate change in different community segments and to tailor interventions that are appropriate and relevant to provide effective financial protection, particularly to vulnerable segments. A corollary of our pursuit towards a more sustainable, greener economy, would also be that some segments of the economy may face declining demand, big shifts in asset values or higher costs of doing business. “Brown assets” or non-sustainable assets such as fossil fuel reserves for example would potentially become “stranded assets”, which has implications on the value of investments in energy companies, particularly those dealing with oil, gas and coal. Globally, it is 4/5  BIS central bankers' speeches  estimated that more than 80% of the known coal deposits, 50% of gas, and one third of the oil reserves cannot be used for energy production if global warming is to be kept below 2°C .

I owe a big debt of thanks to my predecessor Zdeněk Tůma, who steered the bank to a position where its reputation, which had been severely tarnished before his arrival, was growing steadily. He achieved this by, among other things, imposing his own highly developed sense of self-control and restraint on the bank. As the Czech National Bank started communicating less on general topics and more on its areas of expertise, it became recognized as an institution of true independence and authority – to such an extent that the Czech political system allocated all supervisory competences to it and continues to broaden its responsibilities. I believe that the crises from which a significant part of the developed world is still emerging have – at least for smaller economies – justified a scheme in which some or all supervisory roles are allocated to the central bank, which holds responsibility for stability issues anyway. But I also have to warn against the trend where the public sees central banks gaining more and more competences and mandates and starts to overestimate their ability to deal with crises. Central banks are far from omnipotent, and this trend may harm them. After all, their independence is only a product of the political system in which they operate. And such independence depends chiefly on their reputation. A central bank’s reputation is based on qualities such as accountability, transparency, and proper management of its own operations, as well as on its ability to make good choices and good decisions.