samchain/econo-pairs-v1 huggingface dataset:
As arid as these concepts can sometimes sound, they are crucial for shaping how this crisis will affect incomes and living standards over the medium-term. Equally important are issues of well-being, not least given understandable concerns about how the virus and lockdown are affecting our mental health. The background report for this event is timely in providing some early answers to these questions.1 Taken at face value, its conclusions are encouraging. Workplace happiness is, in general, higher and many are feeling a greater sense of workplace empowerment. At the same time, it is too early to be reaching definitive conclusions on what the long-term effects of these seismic shifts in how we work will be. It is also crucial to recognise that these changes have affected individuals in very different ways. For many frontline workers - from health and social care, to public transport and police – home-working has simply not been an option. Those jobs, and many others like them, have become both harder and more hazardous as a result of the Covid crisis. The report captures some of those important distributional differences, with happiness lowest among young people, black people, females and those in the worst-affected sectors whose jobs and incomes are most at risk. Even for those who are currently content home-working, there is a question about whether the benefits will persist.

12 Milasi S, I González-Vázquez and E Fernandez-Macias (2020) ‘Telework in the EU before and after the COVID-19: where we were, where we head to’. JRC Science for Policy Brief. Mongey, S, L Pilossoph and A Weinberg (2020), “Which Workers Bear the Burden of Social Distancing Policies?”, Covid Economics, Issue 12. CEPR Press Morikawa, M (2020). ‘Productivity of working from home’ Covid Economics, Issue 49, CEPR Press Newport, C. (2014) ‘Deep Work: Rules for Focused Success in a Distracted World’ Piatkus 11  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  11  ONS (2020a) ‘Coronavirus and homeworking in the UK labour market: 2019’. Available at https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/c oronavirusandhomeworkingintheuklabourmarket/2019#overview-of-homeworking ONS (2020b) ‘Coronavirus and the economic impacts on the UK: 8 October 2020’. Available at https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/coronavirusandtheeco nomicimpactsontheuk/8october2020 Opezzo, M and Schwartz, D (2014) ‘Give Your Ideas Some Legs: The Positive Effect of Walking on Creative Thinking’ Journal of Experimental Psychology: Learning Memory and Cognition, vol. 40, no.4 RSA (2020) ‘Can Good Work Solve the Productivity Puzzle? Collected Essays’. Available at https://www.thersa.org/globalassets/reports/2020/can-good-work-solve-the-productivity-puzzle.pdf TUC (2019) ‘Annual commuting time is up 21 hours compared to a decade ago, finds TUC’ available at https://www.tuc.org.uk/news/annual-commuting-time-21-hours-compared-decade-ago-finds-tuc  12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12
Overall, ladies and gentlemen, since I last appeared before you, the growth prospects for the Spanish economy that I then described largely remain in place, although the financial turmoil has, as everywhere, heightened the uncertainty surrounding those prospects. The outlook offered by a scenario of continued buoyancy – albeit at a slightly more moderate rate but with a more balanced composition – and the solidity of our financial institutions are evidence of a strength that affords every assurance of being able to withstand the impact of the turbulence. However, depending on the ultimate duration and intensity of this episode of turbulence, it cannot be ruled out that some difficulties may arise to prevent external demand from acting, as it has to date, as a factor sufficient to offset the foreseeable gradual moderation of domestic demand. This will be even more the case if the impact of the financial instability on the growth of Spain’s main export markets becomes substantial. In circumstances such as those prevailing at present, economic policy has a very important role to play in offering a framework in which confidence stems from the existence of leeway for taking action to deal with possible future contingencies. To this end, policy should maintain its firm stance on medium-term stability targets and consequently avoid the adoption of measures excessively focused on the short term.

In a groundbreaking study Rose (2000) estimated that joining a currency union may boost cross-country trade by over 200%. Most economists have agreed with the direction and mechanism behind this – the single currency eliminates the uncertainty related to exchange rate movements and thus diminishes the risk related to foreign trade. However, the estimated scale seems to be much exaggerated. One problematic issue is related to the fact that before the eurozone, we did not have examples of currency unions between developed countries. So the Rose study was based on data on currency unions involving poor and/ or small countries. As noted by Micco, Stein and Ordonez (2003), “one does not need to be a eurosceptic to wonder whether such findings are directly applicable to Europe’s single currency”. Follow-up studies (e.g. Rose and Wincoop (2001), Kenen (2002), Persson (2001)) attempted to correct the Rose’s estimates but arrived, rather inconclusively, at anything between a 50% and 150% growth of bilateral trade. Recently, the first studies based on euro area data have emerged. These show that the trade creation effect of the euro has been substantial, although (until now) by an order of magnitude smaller that the original Rose’s estimate (e.g. Micco, Stein and Ordonez (2003)). Our knowledge about trade creation effects of the euro is still far from complete and we will probably have to wait another 10+ years to have enough data to draw firm conclusions about its magnitude in the eurozone. Now let me move to the cost side.
However, the reverse can also apply: stock market developments also have some significance for the shaping of monetary policy. The price of  2/7  various assets, such as shares, is important in itself for the dynamics of a country’s growth and inflation trends. If, for instance, share prices rise, this stimulates household consumption and corporate investment, and vice versa. This in turn affects price trends. Thus, the stock market, like the housing market, can affect the Riksbank’s monetary policy decisions. Since the 1960s and 1970s, Swedes have been saving more and more in shares, both directly and via mutual funds and insurance, and the market has developed considerably during this period. The return on shares has been very good, seen over the past 30 years, but it has also been something of a roller coaster ride. Here I am thinking of periods of overvaluation, which have been followed by sharp price falls, for instance in connection with the financial crisis and the later IT bubble. Despite these periods of falling share prices, the percentage of shares in household wealth has increased, and stock market developments have thus become increasingly important for households’ consumption decisions and for inflation. Another reason to be interested in the stock market is its significance for efficiency and thereby for growth. An efficient securities market fulfils many important functions, for instance, as information bearer, channel for risk management and as mediator of capital.

When the fixed exchange rate target was abandoned in November 1992, after an unsuccessful attempt to defend the krona – you probably all remember the increase in the marginal rate to 500 per cent – it followed on from yet another cost crisis. At the beginning of 1993, the outlook for the Swedish economy was bleak - we were in the midst of an international economic slowdown, the banking crisis was a fact, interest rates were high and unemployment was soaring. During the period with a fixed exchange rate fiscal policy had borne the entire responsibility for stabilisation policy, while monetary policy had been tied to defending the krona rate. It was evident that fiscal policy had not been sufficiently tightened in connection with the overheating to which credit deregulation contributed. It was high time to break with history – but how should this be done? A new stabilisation policy regime A comprehensive change in regime was implemented in order to take Sweden out of the crisis and to create the conditions for a more stable and more favourable economic development. Central government finances were consolidated and fiscal policy was subjected to regulations regarding an expenditure ceiling and surplus target to attain a long-term balance in public finances. Monetary policy was aimed at safeguarding price stability. The interest rate, which had been a tool for balancing currency flows during the period with an exchange rate target, would now be used to affect demand in the economy with the aim of stabilising price trends.
Conclusion Let me say in conclusion that the assessment of monetary policy is an important part of an independent central bank’s endeavour to be open and clear and of the endeavour to attain and maintain confidence in the inflation target. In Sweden, we publish a substantial amount of information that enables the general public to examine our analyses and to understand how monetary policy decisions are made. The developments in the economy in recent years have given rise to many important issues, not only for us decision-makers, but also for those who assess us. We are several central banks who have faced structural, unforeseen factors contributing to keeping down inflation, while monetary policy is expansionary, the economy is showing robust growth, and household borrowing and asset prices are rising rapidly. An inflation rate lower than the target level need not be interpreted in this situation as due to excessively tight monetary policy and as a failure for monetary policy. It is interesting to note that this has not been the conclusion in the most recent assessment of Norges Bank. Developments in recent years have raised issues which are extremely important in the discussion and which require improved analysis. If we were to aim at keeping inflation on target at any cost, without taking into account developments in the real economy, what would the consequences be of trying to stimulate demand further so that inflation comes closer to the target?

There are still a sizable number of properties that are either in foreclosure or up for foreclosure sale, which has weighed down the local housing market. Yet, Fairfield County has not been the only place in the metro region to see a sluggish recovery – notably, both northern New Jersey and the Mid-Hudson Valley have yet to see employment return to their pre-recession peaks. This picture is in contrast with New York City’s economic performance, which has been exceptionally strong throughout this expansion, and has been a driver of growth for the whole tri-state region. Why is New York City seeing so much stronger job growth than Fairfield County? After all, it wasn’t so long ago that Stamford was attracting finance-sector jobs away from Manhattan. The answer lies in a mix of cyclical and secular trends. On the cyclical side, while finance employment has been sluggish in both New York City and Fairfield County, New York City is benefiting from strong employment gains in technology, construction, retailing and advertising – sectors that are not contributing to the same degree in Fairfield County. In addition, Stamford has had to deal with the relocations of UBS and RBS, while Fairfield faces the prospective relocation of GE. One potential long-term trend that is likely affecting the region is a renewed urbanization: that is, a gradual but broad-based shift of preferences to urban living, especially for younger generations. Throughout the second half of the 20th century, we saw a steady and widespread migration from cities to suburbs.
In what ways have banks been regarded as special? Let me begin then by discussing why, and in what senses, banks have been regarded as special. The term bank, historically and more than ever today, covers a multitude of sins. In practice it refers to a range of very different institutions which may, and do, within legal restraints, engage in a variety of different financial - and even some non-financial - activities whether on their own account or in an agency or advisory capacity. But banks have some key distinguishing characteristics in common. In particular they take unsecured deposits from the public at large. The particular characteristics of bank deposits are that they are capital certain and (more or less) immediately accessible to the depositor, so that they came to be used as the principal means of making payments. In short, because of their convenience, bank deposits became the predominant repository for the immediately liquid asset holdings of the rest of the economy, and the predominant form of money. The attraction of these deposit and payments services depends upon depositors generally having a high degree of confidence that their funds will in fact be available on demand and it depends upon the cost of the services. In providing the services, therefore, the banks need to strike a balance between deploying their deposits in low-yielding, high quality, liquid assets to meet cash withdrawals, and riskier investments to generate a higher return.

Moreover, given the prevailing uncertainty as regards both the global economy – which could suffer a greater-than-expected slowdown – and the fallout from the international financial  BIS Review 80/2008  3  turmoil – which has hit Switzerland fairly hard compared to other industrial countries – we consider that a prudent attitude remains appropriate and that a change of monetary policy is not called for in the current circumstances. Nevertheless, we must remain very vigilant. A renewed rise in energy prices, a stronger economy than expected, a weakening of the Swiss franc or an increase in inflation expectations would pose a threat to medium-term price stability. We will therefore continue to keep a close watch on these factors, so as to be able to react quickly in order to maintain price stability in the medium term. Inflation forecast chart How has our inflation forecast been revised? The dashed red curve on the chart represents the new forecast. It covers the period from the second quarter of 2008 to the first quarter of 2011, and maps the future development of inflation on the assumption that the three-month Libor remains unchanged at 2.75% over the forecasting period. For purposes of comparison, the dash-dotted green curve shows the inflation forecast of the March monetary assessment, based on a three-month Libor of 2.75%. The new forecast shows inflation rising in the short term, and exceeding 2% by the first quarter of next year.
Taken together with the supply chain disruptions that accord firms pricing power in supply chains, this tightness creates conditions conducive to the emergence of the second-round effects we fear. Behind the labour market tightness lies a decline in participation rates among the working age population, particularly those in the 50-65 age group. The reasons behind this decline remain the subject of controversy, but the impact of the pandemic on early retirement and long-term health, as well as underlying demographic developments, all seem to have played a role.10 Crucially – and just like the rise in gas prices – rising inactivity among the working age population represents an adverse supply shock, which adds to the difficult shorter-term trade-offs facing monetary policy.11 Looking back to a year ago, the MPC debated whether the prospective end of the furlough scheme introduced during the pandemic would release furloughed workers into the labour market and ease the tightness emerging in the labour market. This was a difficult judgment to make, given that the furlough scheme was without precedent. As it turned out, that easing did not materialise: through the middle of this year, the labour market has continued to tighten and has proved tighter than we had expected, largely owing to the adverse developments in participation that we did not fully foresee. Now that the economy has slowed (and probably entered recession), we are starting to see labour market indicators turn. Vacancies have stabilised and there are tentative signs they will fall from their historically high levels.

“UK Monetary Policy – ‘Crossing the river by feeling the stones,” speech given at the Confederation of British Industry, Newcastle upon Tyne. Bank of England  Page 14  Pill, H. (2019), “Whatever it takes within our (new?) mandate” in R. Barwell and J. Chadha (eds.) Renewing our monetary vows: Open letters to the Governor of the Bank of England, pp. 37–54 (London: National Institute of Economic and Social Research). Pill, H. (2010). “Monetary policy in a low interest rate environment: A checklist,” NBER International Seminar on Macroeconomics 6(1), pp. 335-345. Tenreyro, S. (2022). “The economy and policy trade-offs,” Dow Lecture, National Institute of Economic and Social Research. Bank of England  Page 15  Endnotes 1  2  3 4  5 6 7 8  9  10 11  12  13  14  15 16 17 18 19  20  See: Vickers (2022). “The regulation of inflation: Reflections on 25 years of the MPC,” Beesley Lecture, 9 November 2022. The MPC’s communication following its 3 November 2022 meeting set out why both the market-implied path of future Bank Rate and the path where Bank Rate was maintained at a constant 3% level were seen as inappropriate given the prevailing economic circumstances. This is a form of guidance. But the preferred outlook for Bank Rate was left to be determined by the evolution of the data. See: Evans et al. (2015) for an articulation of this approach.
True sovereignty is reflected not in the power of making laws – as a legal definition would have it – but in the ability to control outcomes and respond to the fundamental needs of the people: what John Locke defines as their “peace, safety, and public good”. [3] The ability to make independent decisions does not guarantee countries such control. In other words, independence does not guarantee sovereignty. Countries that are completely shut off from the global economy, to take an extreme but instructive example, are independent but not sovereign in any meaningful sense – often relying on external food aid to feed their people. Yet being connected through globalisation also 1 / 10  BIS central bankers' speeches  increases the vulnerability of individual countries in many ways. They are more exposed to financial spillovers and to the aggressive trade policies of foreign states, while increased competition makes it harder for states to coordinate with one another to enforce regulations and set standards so as to achieve their social goals. This restricts their control over domestic economic conditions. In this environment, countries need to work together to exercise sovereignty. And this applies even more within the EU. Cooperation within Europe helps protect states from external pressures, and it helps enable their policy choices. Working together to protect Globalisation has profoundly changed the nature of global production and deepened the ties that exist between countries. Cross-border holdings of financial assets are now around 200% of global GDP, compared with about 70% in 1995.

Multinational firms can influence national regulations through the threat of relocation, as well as arbitrage tax systems by shifting income flows and intangible assets across jurisdictions. There can also be incentives for countries to use labour standards as a tool of international competition – the so-called “race to the bottom”. This makes it more difficult for countries to enforce their core values and protect their people. It also leads to corporate tax bases being eroded, which makes it harder to finance welfare [16] 3 / 10  BIS central bankers' speeches  states. [16] OECD analysis, for example, estimates global revenue losses from tax avoidance to be in the range of 4% to 10% of corporate income tax revenues. [17] These effects occur when countries are not large enough to exercise regulatory power against mobile capital or cross-border firms. But it is harder for this to happen at the level of the EU, since it represents a market that companies can ill afford to leave. Having regulatory power at the EU level enables EU countries to exercise sovereignty in the areas of taxation, consumer protection and labour standards. First, the EU gives its members the capacity to prevent multinationals from avoiding corporation tax by exploiting loopholes or extracting subsidies. This is a complex area, but some recent progress has been made on this front. New European rules have entered into force this year to eliminate the most common corporate tax avoidance practices.
Compensation structures must motivate not only high performance but also high ethical standards. •  Some jurisdictions have placed restrictions on bonus payments – how much can be paid or over how long a period. MAS has put in place rules and guidelines that are consistent with the Financial Stability Board’s principles for sound compensation practices. They require the compensation of a bank executive to be aligned with not only the risks that the bank undertakes, but the time horizon of those risks. But we have chosen not to cap bonus payments or be overly prescriptive in our rules. Such measures may have unintended consequences or could be easily circumvented. Instead, MAS has stepped up its supervisory intensity of financial institutions’ overall compensation policies and practices. •  We assess the effectiveness of the firm’s compensation system, its relationship with the firm’s governance framework, and its impact on risk-taking behaviour. •  We intend to conduct deeper-dive reviews, to examine how a firm makes compensation decisions in practice, as well as the extent to which the firm’s board and management deal with issues relating to compensation and risk culture. A second area of focus is fair dealing: are firms dealing fairly with customers? MAS has issued guidance on fair dealing principles and outcomes that financial firms should achieve. •  We assess whether the board and management have put in place initiatives to foster a corporate culture of fair dealing.

Prices for credit insurance and funding costs have risen, although to a smaller extent than for many US and European institutions. As a result, Norwegian banks now have to put more effort into procuring deposits and a little less into selling loans. Such a change in banks' behaviour may help to curb growth in demand and output in the period ahead. In addition, there may be further repercussions for the Norwegian economy if weaker developments in the US lead to a broad-based pause in global growth. First, a downturn in the world economy may have a negative impact on activity and profitability in export industries and perhaps even the oil sector. It may be more difficult to sell goods in a falling market, and prices for domestically produced goods may fall. Second, turbulence and the prospect of weaker growth may increase uncertainty among Norwegian households and businesses. As a result, new projects and investments may be postponed, or enterprises may be reluctant to recruit new employees. Third, the financial market turbulence has a more direct impact on the business sector. Banks and investors now apply a higher premium and higher prices for providing capital for acquisitions, restructuring and investment, and highly leveraged companies have to pay high loan risk premiums. We still do not know what the full impact of the turbulence will be. The US authorities have taken measures, both fiscal and monetary, to address weaker growth prospects. Interest rates are shifting down in the US and many other countries.