samchain/econo-pairs-v1 huggingface dataset:
BIS Review 71/2002  7  Nevertheless, there is also general agreement on the fact that the gap, in terms of average GDP per capita, between the accession countries and the euro area, although diminishing, remains still quite significant. The size of the gap, combined recently with a rather limited growth differential between the two groups of countries, suggests that the process of real convergence will be very gradual and will have to continue much beyond the tentative dates for EU accession. Although differences in income levels are not incompatible with EU and even EMU membership, it is extremely important for accession countries to increase real convergence. Indeed, real convergence is essential to create economic cohesion within EMU and promote integration between Members States, thereby helping to minimize the risk and the effects of asymmetric shocks, in the best interest of accession countries themselves. Let me stress seven points of particular relevance for the Eurosystem, and for accession countries themselves on the road towards achieving catching-up and convergence with the EU. •  Firstly, we should never forget that nominal convergence must be sustainable and therefore not only constitutes an objective that must be met at a given point of time but rather a goal that must be achieved continuously. Strict compliance with the Maastricht criteria will be key for joining the euro area.

Chart 10 – Monetary policy, the global economy and inflation Impact of monetary policy Cost of imports Exchange rate  Global economy  Demand  Domestic demand  UK inflation  Expectations and credibility Pricing climate  In the future, we may not be able to achieve the high degree of stability for growth and inflation that we saw in the MPC’s first decade. But our experience also suggests that we are not powerless to act in the face of significant global economic changes either. Chart 10 illustrates the main channels through which monetary policy can stabilise an open economy like the UK in the face of fluctuations in global demand or prices. The stabilising role of  10  BIS central bankers’ speeches  monetary policy operates through three main channels – the exchange rate, demand conditions and by influencing inflation expectations and enhancing the credibility of the monetary framework. And even though monetary policy will affect the growth of the economy in the short-term, the overall objective for UK monetary policy is and should remain price stability. That is because stable prices provide the best climate for growth, investment and business success in the longer term. The price stability objective provides the ultimate benchmark to guide how policy should respond to changes in the economic climate.
It means that all EU countries — and thus non-euro countries such as Sweden — are bound by the rules for fiscal policy and its surveillance after the move to Stage Three. Each country is to strive for budgetary positions close to balance or in surplus in the medium term. This is intended to allow the automatic stabilisers free play while keeping the government deficit inside the 3 per cent limit. In this way the Pact provides for some flexibility in fiscal policy, which may be particularly important when there is no recourse to exchange rate adjustments. If the budget deficit exceeds the 3 per cent limit, sanctions can ultimately be imposed on the country in question if the problems are not tackled. It is only in exceptional circumstances that this may not apply. A surveillance procedure has been established for monitoring developments; national stability programmes are to be presented at regular intervals, showing how the goals are to be fulfilled. This process is perhaps as important in practice as the threat of sanctions. The establishment of clear rules and sanctions is intended to support the forces in each country that favour a disciplined fiscal policy. The sanctions do not apply to non-euro countries and they submit convergence programmes instead of stability programmes. So what has happened so far? The assessment of convergence or stability programmes from all the EU countries this spring shows a mixed picture.

It was at that time – as early as in August 2006 – that Poland's first fully electronic public service was launched in Poznan. This service helps make transactions via the Internet. This means that it is possible to download and fill in an electronic form, authorize it (for instance with electronic signature), make a payment (including stamp duty) and receive confirmation that a given service has been provided by the e-authority – and all this takes place via the Internet. If a physical document is necessary (extremely rarely though it happens in 2026), the relevant document is delivered to the indicated address by courier within 24 hours. When Global was moving to Poznan, he was hoping that e-government would grow fast here, and that it will be possible to set up a company via the Internet within several minutes or to file a passport application from any photographer’s shop immediately after the photo has been taken, etc. He knew that things already looked like this in many places around the globe, but not yet in Poland. He analyzed strategic documents of local authorities in Poznan, took a closer look at their aims and methods to measure the results, and decided that Poznan was very likely to meet his expectations. He knew that government bodies were frequently inefficient only because they did not know or employ modern yet already proven methods of administration. Poznan, however, was different.
A relatively weak stock-market trend in the 1960s and ’70s no doubt fed expectations of a favourable return in the future. Another factor was certainly that the real return on bank deposits had been negative at times in the 1970s. Moreover, the introduction of mutual funds with tax incentives in the late 1970s and their subsequent replacement by a national savings system presumably drew many people’s attention to the stock market. It is also conceivable that the rise of economic journalism in the 1970s and ’80s contributed to a greater interest in the stock market. Neither should the formation of the Shareholders Association and the Share Promotion Association in the 1960s and 1970s, respectively, be overlooked. More knowledge and information certainly contributed. However, the increased saving in shares is one item in a larger context, in Sweden as well as other western industrialised countries. I mentioned earlier that Swedish households have transferred much of their traditional saving from banks to other instruments. Thirty years ago, bank deposits and other very liquid assets with little risk made up almost 60 per cent of households’ financial wealth, as against less than 20 per cent today. The major part of this adjustment in financial portfolios has gone to shares but a good deal now takes the form of insurance saving. The trend towards forms of saving with a higher risk has been accentuated by new rules for insurance companies, permitting a high proportion of shares, although this is arranged more indirectly.

But it will also be seen that in certain periods the return has deviated rather markedly from the trend. That raises the question of how long the horizon needs to be for a diversified 13 portfolio to actually yield a good return. The third diagram plots the highest and lowest real returns for rolling investment horizons of different duration between 1918 and 1996 (Diagram 3). It will be seen that with a five-year horizon in this period, the best average annual return has been 26 per cent; with an unfavourable initial year, however, the average annual return could be as poor as –9 per cent; moreover, even such a long horizon as twenty or thirty years did not guarantee a return on a par with the trend. The return is admittedly positive for all the rolling periods but even for such a long horizon as twenty years the return on equity was worse than for bonds and bank deposits in 5 per cent of the cases. This raises the issue of timing, that is, when to start saving in shares. Doing so at a time when stock market prices are high may entail a long – in some cases very long – wait for a return that is even in the vicinity of the trend. One way, used by many people, of coping with the problem of timing is to spread the investments over time.
A further jump in wages in 2002 amplified the imbalances in the economy and fuelled the rise in prices for goods and services produced in Norway. This is why monetary policy has been tight. Chart 10. The real interest rate Per cent 10  10  8  8  6  6  4  4  2  Average  2  0  0  -2  -2 -4  -4 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002  Sources: Statistics Norway and Norges Bank  The real interest rate, i.e. the interest rate adjusted for inflation, rose in 2000 and was thereafter somewhat higher than the average for the past 30 years. With the reduction in the key rate this winter, the real interest rate is no longer particularly high. The tight monetary stance is reflected in the strong krone. Is there a risk of prolonged stagnation? The US has been the driving force in the world economy. The US economy has historically been very resilient. Growth tends to pick up rapidly after short periods of contraction. Most likely this will prove to be the case this time as well. A positive aspect is that confidence in the financial system has not been impaired. There is some evidence of a recovery in investment. However, we cannot exclude the possibility of a fairly long period of stagnation in the global economy. Low interest rates in the US and Europe are a reflection of this risk.

We must invest abroad in order to safeguard our petroleum wealth and maintain a broad-based business sector. This will also be the case if we should decide to reform our pension system in the future, with a larger component of public or private fund-based schemes. Risk diversification also favours the investment of capital abroad. The state is already a dominant owner in many of Norway's largest companies. Future government tax revenues will also largely depend on the growth potential of the Norwegian economy. The safest investment an individual or a small firm can make is to deposit their money in a bank. The return on bank deposits may be low, but for small amounts it is safe. The central government cannot, however, safeguard its capital by depositing tens of billions of kroner in banks. Investments can be made in two main types of instruments: bonds and equities. The international bond market is about the same size as the equity market. Government bonds are a relatively safe investment, but the return is low. Long-term interest rates in the US and Europe are currently around 4 per cent. New investments will thus achieve an annual real rate of return of 1½-2 per cent. By way of comparison, the authorities have based their use of  petroleum revenues over the central government budget on the assumption that the Petroleum Fund can achieve a long-term real return of 4 per cent. It is unlikely that this rate of return will be achieved if we only invest in bonds.
In normal times my preference would naturally have been to look through such a development provided that it did not feed into medium-term expectations. Indeed, we had seen inflation fall into negative territory driven by oil prices in 2009, and we had not reacted because we were confident that it would be transitory. The conditions we faced in January this year, however, gave us no such comfort. Our analysis showed that the persistence of low inflation across a range of statistical metrics was higher than in 2009. Measures of core inflation were also less sticky. But for me what was decisive was the loosening in the anchoring of inflation expectations we were witnessing, even at maturities and at horizons that we would normally expect to be more resilient to short-term inflation dynamics. This was in stark contrast to 2009 where inflation expectations hardly moved, even at the short end. The public sector purchase programme It was in this context that we launched the third part of our response, the ultima ratio decision to purchase assets, including public ones, as a tool of monetary policy. It was absolutely crucial that we lifted and re-anchored inflation expectations and warded off these potential second round effects. This is not only because stable inflation expectations are vital for medium-term price stability. It is also because, with interest rates at the effective lower bound, any fall in inflation expectations implies a rise in real interest rates, counteracting the credit easing we were trying to engineer.

There has already been progress with privatisation, especially in the hydrocarbon industry. There are plans to restructure and privatise over 500 state enterprises during the next five years, and to commercialise - or “autonomise” - Iran’s state-owned banking system. Trade and foreign investment are being encouraged by the extension of Iran’s free-trade zones. And new legislation is expected soon to simplify and clarify the Law for the Encouragement and Protection of Foreign Investment. These are all clearly positive steps. Iran is, of course, OPEC’s second largest producer and has the second largest reserves of gas in the world. It has benefited from the recent rise in oil prices and is playing a positive role in promoting the stability of the oil market. President Khatami recently noted that OPEC may need to raise output in proportion to the increase in global oil demand to stabilise prices. The government has taken positive steps to encourage foreign investment in the petroleum sector. For example, they have facilitated foreign participation in contracts to redevelop oil fields, and they have also signed an agreement with a consortium of nine leading international oil and gas companies to study Iran’s potential as an exporter of gas. The government is, moreover, actively seeking to cushion the economy from future fluctuations in the oil price.
Within domestic demand, consumption slowed slightly in 2006 and construction began to show signs of decelerating in Q4, a trend that ran into early 2007. However, investment in capital goods underwent a significant increase which is holding in the year to date. 2  BIS Review 67/2007  Behind these developments in the Spanish economy, along with the improved external environment, is the continuing influence of the favourable factors that have underpinned its dynamism throughout this cyclical upturn. First, there is the impulse stemming from the Spanish economy’s integration into the euro area. That has been acting as a powerful spur to demand, as a result of the effects on confidence and expectations and, naturally, of the expansionary financial conditions that have continued to prevail in 2006, despite the change in the stance of the single monetary policy dating back to the closing months of the previous year. Further, there are the factors that have provided for growth on the supply side, including most particularly the growing demographic boost to the Spanish economy over the past decade, which is contributing, among many other aspects, to generating a substantial expansion in the Spanish economy’s growth capacity. Finally, the importance of reform initiatives in recent decades cannot be ignored, as these have promoted market flexibility and dynamism among agents and institutions. And pivotal too have been the recent macroeconomic and financial policies, which have been a guarantee for stability.

Although the cost of bank credit for households and firms and of fixed-income securities issues rose as the single monetary policy adopted a more neutral stance, these costs reached levels which, from a historical perspective, should be classified as moderate. In any event, somewhat less generous financing conditions than those prevailing during the recent period of exceptionally low interest rates are better suited to the circumstances of the Spanish economy. Consequently, they provide some relief following a lengthy phase of high demand pressure, while helping to make our growth pattern healthier. The strength of demand has been met by very favourable elements in the supply-side response. All the productive branches contributed positively to the expansion of output, though mention should be made of the continuing momentum of construction and the notable dynamism of the manufacturing branches, closely linked to the recovery in the European economies. It is worth noting once again the Spanish economy’s continuing high employment-generating capacity, both in 2006 and in early 2007, since this feature is playing a key role in the continuity of this long expansionary cycle. The strong growth of employment in 2006, at a rate of more than 3% for the year on average, contributed decisively to sustaining domestic spending.
Along with the above-mentioned measures, we have also extended the maturity of the FX deposit borrowed by the banks from one week to one month, and reduce the lending rate from 10 percent to 7 percent for USD and 9 percent for Euro in the FX market. Needless to say, as the high level of volatility in global financial markets prevails, the Central Bank of Turkey will sustain its vigilance and will stand ready to take additional measures prudently within its means in order to ensure the smooth functioning of the financial system. Dear Colleagues, In the last part of my speech, let me say a couple of words about the current financial turmoil. This recent episode provides a good example of how, in a financially integrated environment, a country specific shock can spill over rapidly to seemingly distant markets and countries. The problems, which started in sub-prime mortgage markets in the United States, have spread to the whole financial system all around the world and reached a point that threatens the global economic stability. This shows that countries share not only benefits of financial integration but also the risks associated with it. In my opinion the most important lesson that we should derive from the current turmoil is the need for a global lender of last resort mechanism.

Increased risk aversion has led to sizeable capital outflows from emerging markets in the last two months, resulting in an overall depreciation of domestic currencies. As you may already know, following the 2001 financial crisis, Turkey adopted an ambitious reform agenda to strengthen the financial sector and banking system. Thanks to these measures, resilience of the Turkish economy to external shocks has been improved significantly and the banking system in Turkey has been relatively prepared for the current crisis, as witnessed during current financial turmoil. Since securitized products are rarely used in the Turkish banking sector, the ongoing financial turmoil has not put a marked pressure on local banks through that channel. In addition, there are no liquidity problems in the system. Deposits have been stable and banks have adequate level of collateral in the form of government securities that can be used in the open market operations. However, considering the severity of the current crisis and Turkey’s integration into the global economy, it won’t be surprising that the crisis has some effects on Turkish banking sector. The general framework of the Central Bank’s liquidity management is fairly flexible and wellstructured to fulfill its lender-of-last resort role and meet both New Turkish Lira and foreign exchange liquidity requirement of the banking system effectively. We have acted promptly to contain the adverse effects of the global financial turmoil on the domestic economy.
Cavallo, Alberto (2018) ‘More Amazon effects: online competition and pricing behaviors’, Harvard Business School & NBER, 7 September. 5 Swiss Federal Statistical Office data, for example, show that the share of goods and services subject to price adjustments rose from some 20% per month in 2011 to just over 25% in 2017. Page 3/9  As its responses both during and after the crisis have shown, the SNB has a monetary policy strategy that has proved its worth in highly volatile circumstances. Robust and appropriate, this framework offers the required room for manoeuvre, allowing the SNB to tolerate inflation temporarily moving outside the range it equates with price stability, provided inflation expectations remain well anchored. Innovations on the foreign exchange market As I have explained, the SNB must adapt its analysis continuously in order to understand and anticipate changes in the goods and services market. However, the latter is not the only market to have undergone profound changes. The foreign exchange market, too – a key market for the SNB – has also evolved considerably since the crisis. It is here that we conduct interventions, as required, and it is here that we actively manage our foreign exchange reserves. The SNB has had to adapt to ongoing changes taking place on this market as well to ensure that it is able to implement its monetary policy effectively at all times.

In particular, foreign demand for euro area exports has declined, and euro area domestic activity has contracted in the face of weaker demand prospects and tighter financing conditions. The survey data and monthly indicators for November and December that have become available since our last meeting clearly point to a further weakening of economic activity around the turn of the year, indicating the materialisation of previously identified downside risks to activity. Looking further ahead, on the basis of our current analysis and assessment, we continue to see global economic weakness and very sluggish domestic demand persisting in the coming quarters as the impact of the financial tensions on activity continues. At the same time, we expect the fall in commodity prices to support real disposable income in the period ahead. Furthermore, the euro area should over time reap the full benefit from the effects of policy measures announced over recent weeks. BIS Review 5/2009  1  In the view of the Governing Council, this outlook for the economy remains surrounded by an exceptionally high degree of uncertainty. Overall, risks to economic growth remain clearly on the downside. They relate mainly to the potential for a stronger impact on the real economy of the turmoil in financial markets, as well as to concerns about the emergence and intensification of protectionist pressures and to possible adverse developments in the world economy stemming from a disorderly correction of global imbalances. It is crucial that all parties concerned make their contribution to lay sound foundations for a sustainable recovery.