samchain/econo-pairs-v1 huggingface dataset:
Just focusing on one or a few forecast figures would make it difficult for policy-makers to transmit the complexity of monetary policy deliberations to the public in a precise and transparent manner. Over a medium to long-term horizon, inflation forecasts based on statistical analysis become very inaccurate. Yet, medium to long-run inflation expectations are crucial in guiding the consumption and investment decisions of private agents. In order not to lose sight of the low frequency developments that may influence inflation over longer horizons than are used in the forecasts, the ECB has reinforced its analytical framework with a monetary perspective. This ‘pillar’ looks at price formation from a medium to long-term standpoint and is intended to purge monetary policy from the risk of becoming unduly short-sighted and overreacting to the latest economic news. By constantly reminding the central bank that in the long run prices and money stock increases are correlated, the monetary pillar is a standing support to the ECB’s commitment to price stability at all horizons that are relevant for economic decisions. Taking decisions and evaluating their consequences on the basis not only of the shorter-term indications from the analysis of economic and financial conditions, but also of money and liquidity considerations, allows a central bank to see beyond the transient impact of the various shocks and to maintain a more steady policy course. Looking back over our first six years of operations, monetary analysis has helped to underpin the medium-term orientation of our monetary policy conduct.

At the global level, the fall of the Soviet empire, the conversion of emerging Asia to market economics, accelerating advances in science and innovation in information technology and a deepening and widening of globalised financial markets have all been, or are, part of the powerful phenomenon of globalisation. At the European level, the adoption of the euro by 12 countries, structural reforms in goods and labour markets and the enlargement of the Union are some of the key developments in this respect. Therefore, disentangling the shocks that continually hit the euro area economy and assessing their impact on the risks to price stability in real time remains a very demanding task, in spite of the progress made in statistical data compilation, economic theory and econometrics over the past decades. In such a complex environment, a single model or a limited set of key indicators is not a sufficient guide for monetary policy. Instead, an encompassing and integrated set of data is required. The development of statistics for the euro area and the future priorities for further enhancements reflect this requirement. A rich set of timely statistical data is a necessary but insufficient precondition for sound monetary policy-making. Only if the information is structured and analysed in a consistent way will monetary policy makers be in a position to take the most appropriate decisions to obtain their policy goals.
This spread is influenced by a number of elements, such as the valuation attached to the right to service the mortgages underlying the security, and the annual guarantee fee that is paid to cover the credit guarantee provided by the government-sponsored enterprises (GSEs). The observed widening of the primary-secondary spread likely reflects many factors. Part of this widening is due to higher annual agency guarantee fees which are a necessary and overdue re-pricing of the credit guarantee provided to investors. While these guarantee fees differ by mortgage and by seller, the average effective guarantee fee has increased from 20 to 25 basis points to around 50 basis points today. But this still leaves a significant part of the spread left to be explained by other factors such as changes in originators’ costs and profits. As you all know, the primary-secondary spread is a technically imperfect measure of the pass-through from primary rates to secondary rates. A new study1, by authors including New York Fed staff, adjusts for these factors to come up with a measure of originator2 profits and unmeasured costs, or OPUCs. The basic picture remains the same, with OPUCs at historically elevated levels. The paper evaluates a number of potential factors that could help explain this increase. These include the decline in the value of mortgage servicing rights, credit losses and other costs associated with put-back risk, possible changes in pipeline hedging costs and other loan production expenses.

This combination of slow output growth and continued job gains has meant that productivity growth has been unusually weak, with non-farm business productivity declining significantly during the past two quarters and rising by only 0.3 percent over the past year. It also implies that the future path of productivity growth will be important in determining the outlook for employment growth and the prospects for further progress in U.S. labor market conditions. Because it is unclear exactly why productivity growth has slowed recently, it is difficult to be confident about what it will do in the future. One reading of the data is that some of the slowing seems likely to be persistent. For instance, the weakness in capital spending evident during much of this economic expansion means that the contribution to productivity from capital deepening has dropped sharply in recent years. 2 Also, the U.S. labor market appears to have become less dynamic – perhaps due, in part, to an older workforce. Less movement of workers across jobs could lead to a less efficient allocation of workers’ skills, which would hurt productivity growth. That said, it seems unlikely that productivity growth will remain as weak as it has been over the past year. There is considerable evidence that technological progress continues at a healthy pace. Just look at the advances that have occurred in health care, oil and gas extraction and the development of smartphones.
Monetary policy is a matter of trade-offs Last year, we cut the repo rate to zero in Sweden, and we have continued to lower it below zero at the same time as we have purchased government bonds (see Figure 4). We did this  BIS central bankers’ speeches  3  to safeguard confidence in the inflation target. If we can get inflation to rise, this will reduce the risk of the inflation target’s role as nominal anchor being undermined. Figure 4 The Riksbank’s purchases of government bonds and the repo rate SEK billion and per cent  Source: The Riksbank. According to our analysis, the purchases of government bonds have contributed to interest rates in Sweden being lower and the krona being weaker than would otherwise have been the case without the purchases. 4 We are now also seeing that inflation is moving in the right direction (see Figure 5). Figure 5 Inflation in Sweden Annual percentage change  Note. The CPIF is the CPI with a fixed mortgage rate. Source: Statistics Sweden. 4  4  See De Rezende, R.B., Kjellberg, D and Tysklind, O., ”Effects of the Riksbank’s purchases of government bonds on financial prices”, Economic Commentary no. 13, 2015, Sveriges Riksbank. BIS central bankers’ speeches  However, we are very much aware that the low interest rate level is also increasing the risks linked to households’ already-high indebtedness.

Changes in the regulation of the rental market or increased subsidies for rented housing would increase the share of accommodation to rent, thereby dampening demand for cooperative housing and thus housing prices. However, increasing the number of cooperative houses and changing the structure of the Swedish housing market can take a long time to implement. Over that time we will be obliged to look at different measures which could dampen demand for housing and mortgages. Measures which can dampen household demand for mortgages Raising capital requirements important to reinforce the resilience of banks, although the effects on household indebtedness are limited One option is to focus on the banks and raise capital requirements, which I think we should do. If the banks were forced to change the funding mix on their balance sheets towards a higher share of equity, lending rates could then increase which would mean lending volumes would decrease. However, our own analysis suggests that the effects on banks’ lending rates and lending to households would be limited. 14 The main effect is in fact that the resilience of  14  See the article “Stricter capital requirements for banks – effects on the macro economy”, Monetary Policy Report, July 2014. BIS central bankers’ speeches  11  banks is strengthened. But this is a central point seen against the background of financial stability risks I described earlier.
Fiscal policy and the Government Petroleum Fund have proved to be effective in terms of sheltering the mainland economy from more normal variations in oil revenues. A permanent change in the krone exchange rate will occur only if there is an increase in the use of oil revenues through a shift in expenditure growth. In this context, instruments other than those available to Norges Bank must be used to return the krone to its initial range. BIS Review 14/2000  8  Interest rates influence the exchange rate through two channels. The interest rate differential against other currencies has some effect on the exchange rate. The exchange rate is further influenced via the impact of interest rates on domestic price and cost trends. The isolated effect of the interest rate differential on the exchange rate may be of little consequence compared with other factors. According to Norges Bank’s calculations, the current interest rate differential against the euro area impacts the krone exhange rate in the order of 20 øre against the euro in the short term. On the other hand, the effect of the interest rate on the exchange rate through the channel of domestic demand and price and wage inflation may in many situations be considerable. The Norwegian economy may be exposed to shocks or disturbances that both reduce domestic activity and weaken the Norwegian krone. In response, interest rates should not be increased. An increase in interest rates will result in higher unemployment and mounting instability in the domestic economy and the exchange rate.

The chart shows Norges Bank’s estimate for public purchase of health and care services. The estimate is based on the assumption that the public sector will finance the same share of public services as today. The source for the estimate for public consumption is the Government’s Long-Term Programme, and the estimate is, among other things, based on unchanged tax rates. The fundamental problem is that demand for health and care services is growing faster than tax revenues. There will be a limit on the extent to which the state can reduce appropriations for other important social objectives such as education, research and the judicial system. Something has to give. 17  BIS Review 14/2000  Chart 20  Even after all the structural changes of recent years, there is probably still room for efficiency gains in the health and care sector. However, this is hardly sufficient to fully address the challenges. Users may therefore have to finance a substantially greater share of these services, whether the services are provided by public or private operators. There are limits to the extent to which the public sector should and can impose user fees without creating unacceptable distributional effects. A private insurance system is not a fail-proof solution. It seems obvious that there is a need for a clearer definition of the public sector’s core activities in the health and care sector, and in other areas. There is a need for delimiting what the public sector should finance based on tax revenues.
Monthly figures 130  130  120  120  110  New Zealand  Sweden Norway  100  110 100  90  90  80  80 Australia  70 60  70 60  90 91 92 93 94 95 96 97 98 99 00 01 02 Source: EcoWin SG 16. januar 2003  Inflation  Long-term Phillips curve  Equilibrium unemployment  Unemployment  SG 16. januar 2003  6  BIS Review 2/2003  The short-term trade-off in monetary policy  Output variability  Strict inflation targeting  Flexible inflation targeting Strict "output targeting"  Inflation variability  SG 16. januar 2003  Effect of a credible monetary policy  Output variability  More credible monetary policy  Inflation variability SG 16. januar 2003  The krone exchange rate measured by the TWI Monthly figures 90  90  95  95  100  100  105  105  110  110  115  115 90  91  92  93  94  95  96  97  98  99  00  01  02  03  The figure for January 2003 is the average up to and including 13 January.

Assuming that the three-month Libor rate will remain stable at 1.25%, average annual inflation is expected to hover between 0.9% and 1.6% in the next three years. For 2002, the National Bank still anticipates a growth rate of around 1%. The difficult situation of the world economy has had a marked influence on the development of business activity in Switzerland in the past few months. Following a decline in the third quarter 2001, the economy stabilised in the fourth quarter, and in the first quarter 2002 gross domestic product again rose somewhat. Notably exports and capital spending were on the decline during this period, while private and government consumption as well as the construction industry exerted a stabilising influence. On the whole, the development in the past six months fulfilled our expectations. We assume that the Swiss economy will grow extremely moderately and below its potential until mid-2002. Growth is likely to pick up perceptibly again only during the second half of 2002. Consumption will remain robust and strengthen economic activity. The actual upswing, however, should be triggered by higher exports and these, in turn, will depend on improved economic conditions worldwide. With a slight time lag, capital spending is also expected to grow markedly again. As already stated, we still believe that real economic activity should increase by around 1% in 2002. In 2003, growth should continue to approach its potential, thereby clearly exceeding this year's level.
The new regulations have increased the solidity of the financial sector, without weighing to any notable extent on economic growth The exorbitant costs of the 2007–2009 crisis highlighted the urgent need to reinforce financial stability, and the response was unequivocal. In 2009, at their meetings in London and then Pittsburgh, the G20 leaders rose to the challenge of their historical mission, setting an ambitious agenda for global cooperation. The opening words of the communiqué from the London summit still merit repeating today: “A global crisis requires a global solution […]. We believe that the only sure foundation for sustainable globalisation and rising prosperity for all is an open world 2/7  BIS central bankers' speeches  economy based on market principles, effective regulation and strong global institutions. We have today therefore pledged to do whatever is necessary to: restore confidence, growth and jobs; repair the financial system to restore lending; strengthen financial regulation to rebuild trust." This unprecedented regulatory effort concerned all financial system participants. Four main objectives were set: (i) to make financial institutions more “resilient", that is increase their soundness and their ability to withstand crises; (ii) to put an end to the problem of “too-big-to-fail” institutions – which benefited from an implicit guarantee that they would be bailed out by the government; (iii) to make over-the-counter derivatives markets more secure, notably through central clearing; and (iv) to transform unregulated market activities – shadow banking – into a sound form of market financing.

The armistice ending World War I took effect on 11 November 1918. This undeniably joyous event was followed by a deep economic recession. In autumn 1919 came the Great Crash, when the price of Iceland’s most important export product – salted herring – collapsed. As the winter advanced, Iceland became virtually unable to sell its fish. Foreign exchange revenues stopped flowing into the country. It was in late summer 1920, when the Prime Minister of Iceland was in Copenhagen intending to pay some outstanding debts, that Danish banks refused to accept the proffered mail order cheque issued by Íslandsbanki, which functioned at the time as Iceland’s central bank. Iceland had no foreign currency and had to ration goods the following winter. The economy took a nosedive – one that turned out blessedly short-lived. The years to follow brought major improvements, until the Great Depression in the 1930s. But that is yet another story. Honoured guests: American author and satirist Mark Twain is quoted as saying “History doesn’t repeat itself, but it often rhymes” – just like a good Icelandic quatrain. Now, a century after achieving sovereignty, we Icelanders are facing many of the same challenges as in autumn 1918. But with one major difference: in 1918 the country was destitute and unprepared – with the authority of a sovereign but without social infrastructure such as a healthcare system. Today we are in a vastly different position.
And, finally, in developing early warning indicators for different types of inflationary pressures, and assessing the efficacy of various macroprudential instruments. Partnerships with academia can also play a key role in public insights and understanding of structural issues, challenges and the policy trade-offs. In this regard, I encourage SKBI to be at the forefront of applied financial and economic research that can help shape policy thinking. An American opera soprano and actress turned self-help guru, Dorothy Sarnoff, once said: “Make sure you finished speaking before your audience finished listening”. This morning, I am sure many of you are looking forward to the keynote address by Sir James Mirrlees as much as I am. So allow me now to end my opening address here. Thank you for your kind attention. 4  BIS central bankers’ speeches

Central banks were born with the inception of fiat money – banknotes – and they have been pivotal for the take-up of non-cash payment instruments. Among the latter, a growing trend in the last few years has been the preponderance of electronic payments versus traditional paperbased ones – such as cheques – even if this trend varies across regions. This physical dematerialisation is actually ongoing, with the slow move away from dedicated form factors – such as plastic cards – towards entirely digitalised ones, for example solutions embedded in smartphones or other consumer devices. So, regarding money issuance, we have to monitor closely the latest technological innovations. Several central banks, including the oldest one – the Riksbank in Sweden –, have started to study the possibility of a digitallyissued central bank currency which could allow not only commercial banks but also the general public to access central bank money. Second, financial stability: payments are a key vector for trust and confidence in the adequate functioning of the financial system. This requires both secure and efficient payments and financial infrastructures. Therefore regulators attach importance to supporting technological innovations, including via the potential development of more efficient regulation or “Regtechs”, as long as they go hand in hand with low operational risks and high transaction safety. Third, economic services: payments are the nexus where a new ecosystem based on technological innovation and entrepreneurship is blooming.
To aid in the year-end transition period, the Federal Reserve System and the Federal Reserve Bank of New York have announced a variety of steps to assure adequate liquidity in wholesale markets and promote financial market stability. We approved last month an expanded range of acceptable collateral for discount window and payments system risk purposes. In addition, there are in place a number of measures to ensure that an ample supply of cash will be available to meet possible increases in the demand for cash over the transition period. Further, the Federal Reserve created a century date change Special Liquidity Facility for lending to depository institutions from 1 October 1999 through 7 April 2000. Among other things, this facility should help institutions to commit more confidently to supplying loans to other financial institutions and businesses through the rollover period. Finally, the Federal Reserve Bank of New York announced a number of measures in early September intended by the Federal Open Market Committee to promote the smooth functioning of money and financing markets and to gain greater assurance that we will be able to manage banking system reserves during the century date change. The measures include the expansion of collateral accepted in repurchase transactions, the extension of the maximum term of the Bank’s repurchase transactions to 90 days, and the introduction of a Standby Financing Facility. The next several weeks will be a challenging period, for private and public sector participants alike.

4  4 CPI CPIX  3  3  2  2  1  1  0  0  -1  -1 00  01  02  03  04  05  06  07  08  09  10  11  Sources: Statistics Sweden and the  Unit labour costs for the economy as a whole Annual percentage change, seasonally adjusted data 8  8 Unit labour cost Hourly labour cost Productivity  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1 94  96  98  00  02  04  06  Sources: Statistics Sweden and the Rik b k  6  BIS Review 22/2008  Weak GDP growth in the USA in 2008 Consensus and the Riksbank’s forecasts for GDP growth in the United States in 2008 at different points in time 4.0  4.0 The Riksbank  3.5  3.5  Consensus  3.0  3.0  2.5  2.5  2.0  2.0  1.5  1.5  1.0  1.0  0.5  0.5  0.0  0.0 Jan Feb M ar Apr M ay Jun 2007  Jul  Aug Sep Oct Nov Dec Jan 2008  Feb  Sources: Consensus Economics Inc. and the Riksbank  Monetary policy considerations  Financial turmoil High cost pressures – Inflation above the target Subdued growth in the United States  BIS Review 22/2008  7  The interest rate path is a forecast not a promise Per cent, quarterly average 7  7  90% 75% 50% Repo rate  6  6  5  5  4  4  3  3  2  2  1  1  0  0  Mar-03  M ar-04  Mar-05  Mar-06  Mar-07  M ar-08  Mar-09  Mar-10  Mar-11  Source: The Riksbank  What can monetary policy accomplish?