samchain/econo-pairs-v1 huggingface dataset:
Despite being a year and a half into the official recovery, the recovery period has been so tepid that there has been very little improvement in the percentage of the population employed (see Figure 1). The percent of the population employed in December was 58.3, close to the low of this cycle and below the 59.3 percent employed in July of 2009, when the recovery officially started. For context, the number was around 63 percent when the recession began. The recent stability of the employment-to-population ratio reflects the poor labor market performance of the current recovery. We are simply not generating enough jobs to reduce the number of unemployed persons. Nor are we, by the way, providing job opportunities for the so-called “discouraged workers” who have given up looking for work. What we call final sales – growth in GDP excluding inventory replenishment – has grown quite slowly over the past year and a half. Figure 2 shows that the growth to date has been substantially slower than during the 1982 recovery, and is tracking quite closely to the weak recovery experienced in the early 2000s. As many economists anticipated, the recovery has been tepid given the fact that it comes in the wake of a collapse in a housing bubble with resulting financial market turmoil and disruption. The largest GDP component is consumption, and consumption has not grown very quickly.

The second key question is, how concerned should we all be about a flare-up in inflation – and aren’t the measures the Fed has taken inflationary? Many have expressed concern that Federal Reserve policy actions that expanded our balance sheet dramatically will cause inflation. I firmly believe that in the short run inflation is likely to remain quite low – and that in the longer term we have the tools, and the steadfast commitment, to address inflationary pressures. Indeed, while monetary policy works with lags, I would note that it has been more than two years since the Fed’s balance sheet expanded dramatically. Since that time, core inflation  1  Of course, the views I express today are my own, not necessarily those of my colleagues on the Board of Governors or the Federal Open Market Committee (the FOMC). BIS central bankers’ speeches  1  has fallen and core inflation measures using the CPI or PCE indexes are at something like 50 year lows. Today I will briefly address the role of the low inflation rate for the economy and policymaking. In doing so, I will discuss why inflation concerns have not materialized to date, and why I expect core inflation to remain below 2 percent over the next several years. Question 1: Housing and the economic recovery The economic recovery officially began in the third quarter of 2009, according to the organization responsible for dating our recessions – the National Bureau of Economic Research (NBER).
Meanwhile, although a weaker domestic economy could amplify capacity gaps and ease inflationary pressures, we cannot rule out that its effects on the exchange rate may offset the price effects, at least temporarily, thus delaying the convergence of inflation. Let me now share with you some concluding thoughts. Final thoughts Domestic output and demand have been weaker, and more persistently so, than we expected a few months back. The sharper fall in investment coupled with a more marked deceleration of private consumption, so we lowered our growth forecast for this year below the range we projected in June. Annual inflation, on the contrary, has been in line with expectations and we continue to see its present high level as temporary. As from June, the Bank has cut the monetary policy rate by 50 basis points, taking it to 3.5 percent, and has reiterated that it will consider the possibility of making further reductions to the MPR in line with the evolution of domestic and external macroeconomic conditions and its implications on the inflationary outlook. No doubt the results and projections presented today show a weak performance of the Chilean economy. We have made significant corrections to our output forecast that respond to the combination of external and internal factors, some of them foreseen, some unexpected. Within the latter, it is obvious that the widespread deterioration of private sector expectations has played a major role. The true magnitude of such role is difficult to determine, but it is certainly big, particularly when it comes to projections.

The change in the macroeconomic scenario has also reflected in exchange rate movements, in both nominal and real terms. The CLP posted a 5.8 percent depreciation between the close of this Report and last, mostly during the past few weeks. Although part of this depreciation responded to the global strengthening of the dollar, the rise in the CLP/USD parity exceeded that of other emerging market currencies. This obeyed to less favorable cyclical conditions and a more expansionary monetary policy in the country. It must be noted that Chile’s macroeconomic policy framework includes, among other features, a monetary policy based on inflation targeting and exchange rate flexibility. Thus, during slowdown periods, when the pressure on prices diminishes, policy becomes more expansionary in order to achieve the inflation target, that is, for the inflation rate not to fall below the target range. This boost to monetary policy results in a higher exchange rate, which permits the economy to have a faster, optimal adjustment via the expansion of tradable sectors. In other words, the exchange rate increases are a natural, desired response to the business cycle, lending a helping hand in the economic adjustment. We have been faithful to this predicament, as reflected in the significant depreciation of our currency in recent times. We do not view this as a problem, because despite some unwanted effects in the short term – including higher inflation – it is part of the solution to have the economy reactivate more rapidly and efficiently.
It follows, therefore, that in an environment of rising interest rates abroad, domestic rates must also rise in order to maintain a premium over euro rates, and thus protect the Maltese lira by making domestic financial assets more attractive, thus discouraging capital outflows. That is why under fixed exchange rate regimes, the state of the economy cannot be a primary consideration. Having said that, it must be pointed out that the two objectives are not mutually exclusive. Indeed, since a prudent monetary policy stance contributes to macroeconomic stability, it indirectly creates favourable conditions for sustainable economic growth. It should also be noted that the recent increases in domestic interest rates – after a long period at historically low levels, it must be said – are unlikely to have slowed down the economy unduly. The sensitivity of the economy to interest rates is, in fact, thought to be relatively small. Higher rates will have some impact on growth and employment only if they are sustained over a long period of time. Our estimates show that a half-percentage point rise in interest rates, for example, will reduce the GDP by only 0.06% in the first year, reaching 0.1% by the third year. At the micro level, of course, higher interest rates raise borrowing costs for businesses and households. On the other hand, depositors benefit from higher interest income. Once again, however, monetary policy decisions cannot be based exclusively on such considerations. Exchange rate stability must take precedence over the cost of money in a small, open economy.

The South East Asian countries saw an increase in savings and a fall in investment in the wake of the Asian financial crisis. 2 Since then, these countries have generally continued to pursue a macroeconomic policy mix in support of an export-led growth strategy which sustains these savings-investment patterns. Meanwhile, in the oil exporting countries, export revenues have been boosted by the increase in the price of oil since 2000. You can see this in slide 4. Since domestic investments in these countries have not increased at the same pace, the result has been a rise in net savings in the oil exporting countries. The two surplus regions have one thing in common. In both cases, foreign assets are accumulated almost entirely by the official sector. In the oil exporting countries, oil revenues primarily accrue to governments. Higher oil revenues therefore translate into higher government budget surpluses. In South East Asia, where the currencies shadow the dollar, foreign assets are accumulated primarily by the central banks in the form of official foreign exchange reserve accumulation. Slide 5 shows that the global macroeconomic imbalances have led to a rapid accumulation of global official foreign exchange reserves. 3 Let me now leave you with five stylized facts about SWFs. First, as I already pointed out, SWFs are not a new phenomenon. With its Caisse des Dépots et Consignations, France set up a SWF in 1816. 4 Slide 6 shows the year of establishment of each of the 14 largest SWFs currently in operation.
The banking system’s aggregate exposure to the O&G sector is around 10%. For local banks, this figure is lower at 6-7%. Banks in Singapore have also made adequate provisions for their overall NPLs. The overall provisioning cover for the banking system, as a percentage of total unsecured NPLs, is above 100%. The local banks’ provisioning cover is even higher, at above 200%. The good news for Asian banks is that these cyclical headwinds should pass in time. Growth is recovering, monetary policy is normalising, and commodity prices are stabilising. Asian banks are positioning for Asian growth and a digital future And that takes us to the medium to long term. The prospects for Asian banks are good – chiefly because the prospects for Asian economies are good. The region is expected to continue registering relatively high growth rates in the medium term – about 6% on average over the next 5 years, compared to the global average of 3.7%. Higher Asian incomes will drive demand for financial services, leading to more opportunities in banking. At the same time, financial inclusion remains low in many parts of Asia. A 2015 World Bank study found that of the 2 billion adults on the planet with no bank accounts, more than half were in East and South Asia 3. A more recent study by the ADB covering Cambodia, Indonesia, Myanmar and the Philippines found significant gaps between demand and supply in several financial services, including payments, savings, and credit4 .

The Government is committed to this course as a matter of national economic self interest. But these same policies are calculated, too, to make us a more prosperous and active trading partner for Europe as a whole, and to ensure that we do not have any avoidable disruptive effect on the policies or on the economy of the euro participants. More than this they are calculated to foster sustainable economic convergence as the necessary precursor to our eventual adherence to the euro club. But thirdly - and of particular relevance to this conference - we can contribute, directly and positively, to the strength of the euro through the City of London’s financial markets. The potential benefits to Europe of the euro derive importantly, as I have said, from the exchange rate certainty which it will provide across the euro area; they derive importantly, too, from the greater transparency and liquidity and competition of unified financial markets in the euro-denominated instruments rather than the fragmented markets denominated in the various national currencies that we have now. Providing transparent and liquid, competitive, innovative and well-regulated financial markets is one of the things which the City of London does particularly well.
Moreover, by virtue of the stock effect, the yield compression was expected to be long-lasting and to halve only after five years. Owing to changes in macroeconomic conditions and the need to adapt the monetary policy response, several recalibrations were made to the APP. [28] Accordingly, as is shown in Chart 9, the contemporaneous term premium impact changed over time, reaching its maximum of more than 100 basis points in mid-2016, when markets were expecting a significant expansion of the APP in light of increased uncertainty induced by the Brexit referendum outcome. When the end of net purchases was announced in June 2018, the impact on ten-year sovereign bond yields was estimated to be around 90 basis points. The additional duration extraction associated with the renewed net purchases that started this month has contributed to a further compression of the term premium. Currently, staff estimate the euro area sovereign ten-year rate to be more than 100 basis points lower than in a counterfactual where the APP never happened, and the curve to be distinctly flatter (see again Chart 8). Finally, there are also complementarities between the APP and other instruments, which I will briefly summarise. [29] First, the APP helps maintain the excess liquidity conditions that keep the euro short-term rate € the interbank overnight rate in the euro area, near the ECB’s deposit facility rate, which in turn contributes to avoiding undesirable bouts of interest rate volatility.

Niklaus Blattner: Financial market infrastructures facing technological, economic and regulatory challenges Summary of a speech by Mr Niklaus Blattner, Deputy Chairman of the Governing Board of the Swiss National Bank, at the XI AWK Group Financial Services Lunch, Zurich, 20 September 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Smoothly and efficiently functioning financial market infrastructures form the backbone of the International Financial Centre of Switzerland. The future of these infrastructures will largely hinge on trends in Europe, which point to stronger consolidation. However, healthy competition is the prerequisite for investment and innovation incentives in a consolidated stock market and settlement environment. This would also contribute to reducing the existing inefficiencies, in particular with regard to the processing of cross-border transactions. Yet a competitive environment will develop only if market participants can choose freely among the different providers and if the infrastructures are interoperable, i.e. if the providers grant each other and their participants mutual non-discriminatory access. At present, competitive obstacles exist at the technological, economic and regulatory levels. For instance, costs for changing providers are high. Moreover, financial market infrastructures are often operated in “silo” mode – either explicitly or implicitly – with clearing and settlement being handled by only one provider. But silos impede competition. A suitable regulatory framework must therefore be created to strengthen competition.
For the household sector, spreads on securitised portfolios of both secured and unsecured credit fell between 2003 and 2005 (Chart 6). That will have contributed to the fall in effective rates on the underlying mortgages and personal loans (Chart 7). The same broad picture holds for the corporate sector (Chart 8). An illustrative decomposition suggests that, especially for sub-investment grade borrowers, the compression of spreads could not be explained solely by reduced compensation for default risk, with the excess possibly reflecting lower liquidity premia (Chart 9). 4 These falls in spreads were material relative to the changes in the MPC’s Bank Rate and to the risk-free yield curve. For example, in the latest “policy cycle”, we increased Bank Rate by 125bp over 11 months from August 2006. During that period, effective rates on new mortgages rose by closer to 50bp. In other words, from around 2003, monetary policy needed to take account of a progressive loosening of credit conditions. The tables have now turned. Spreads have risen; the issuance of securitised portfolios of household loans has collapsed; corporate bond issuance has fallen (Charts 10-11). It is pretty clear that, for the time being, there has been an adverse shift in the supply of credit from the non-banking sector. In part, that seems to be due to investors becoming less confident that they can base decisions about exposures to complex credit portfolios on rating agency ratings; this is akin to lenders deciding that their monitoring of risk was less good than they thought.

Chart 11 provides an assessment, drawing on IMF analysis, of the evolution of structural deficits and surpluses for two alternative scenarios, with the red dashed line corresponding to an assumption that supply impairment in the advanced economies as a result of the crisis is minimal (and therefore output gaps are correspondingly large), whereas the blue dashed line – which corresponds to the IMF’s central case – assumes a relatively high degree of supply impairment (and therefore substantially smaller output gaps). In the former case, the bulk of the post-crisis narrowing in imbalances is attributed to cyclical factors, whereas in the latter they are attributed to structural factors. Clearly, depending how one reads the data, one can arrive at a different conclusion. An alternative way into this is to look at what has happened to relative prices, rather than quantities. A natural counterpart of a rotation in demand from the advanced to the emerging world should be a fall in the real exchange rates of the former and a rise in those of the latter. By increasing the profitability in deficit countries of producing internationally tradable goods and services relative to that of non-tradables, that should facilitate the necessary shift of resources between sectors. The opposite is true for the emerging economies. Chart 12 shows such a shift has taken place since before the crisis, with both sterling and the dollar depreciating in real terms, and the renminbi appreciating.
I have spent just over four and a half years as a member of the MPC and it has been a most eventful period to be involved with economic policy-making. My period on the Committee has been dominated by the global financial crisis and the major global recession it triggered in late 2008 and early 2009. However, the global recession is now behind us, even if we are still feeling some if its after-effects. Since the second half of 2009, the world economy has been in a recovery phase and the UK and most other European economies have shared in this return to growth. Indeed, the growth of the UK economy has tracked very closely the average performance of the European Union through the recession and into the early phases of the recovery, as Chart 1 shows. And current forecasts point to a continuation of this pattern this year and next. Chart 1 – UK and EU output growth, 1997–2012 Percentage change in real GDP 5 4 3 2 1 0 -1 -2 UK (exc. oil and gas) *  -3  EU-27 *  -4 -5 -6  1997  1999  2001  2003  2005  2007  2009  2011  *:2011 and 2012 are IMF forecasts. Forecasts for the UK do not exclude oil and gas.

Though I am leaving the MPC at the end of this month, I do not think the issues I have raised today in this speech will go away with my departure. Global economic issues will continue to have a major economic impact on growth and inflation performance in the UK and here in Jersey – as many of you will know from your own business experience. I hope I have shed some light today on some of the important changes in the global economy and how they affect the conduct of UK monetary policy. Despite the turbulence we are likely to continue to experience in the global economy, I trust you will be able to steer your businesses successfully through it. And as I come to the end of my shift at the helm of the UK economy, I hope that my colleagues on the MPC will not allow the UK economy to be blown too far off course by global inflationary winds before taking the necessary corrective monetary policy action, which is long overdue. References Asian Development Bank (2001). Asia 2050: Realising the Asian Century, May 2011 Hume, M. and Sentance, A. (2009). “The Global Credit Boom: Challenges for macroeconomics and policy”, Journal for International Money and Finance, Volume 28, Issue 8, Pages 1426–1461 International Monetary Fund (2011). “Oil scarcity, Growth, and Global Imbalances”, World Economic Outlook April 2011, Chapter 3  12  BIS central bankers’ speeches  Kemp, J. (2011). “Globalisation, commodities and inflation”, http://www.commoditiesnow.com/reports/general/4653-globalisation-commodities-and-inflation.html Llewellyn, J., and Santovetti, L. (2010).
This should lead to a more modern and flexible system to align wages to productivity in particular sectors or firms. This will improve prospects for domestic firms to hire staff. A long way to go… But we must remain honest with ourselves: even though considerable progress has been made, we still have a long way to go before the situation normalises. House prices have continued to fall. The domestic economy remains fragile. And there is still considerable work to do on fiscal and structural reform. This is of course very demanding for Irish households who have already seen their disposable income and wealth decline a lot over recent years. It is thus important that also the relatively rich and wealthy carry a fair share of the adjustment burden. Worst of all, perhaps, is the fact that a large portion of the population is currently out of work. This makes job creating structural reforms so important. The deep recession, high levels of public spending, a narrow tax base and the burden of supporting the financial sector have all have put stress on the fiscal position of the State. As a result, the fiscal deficit has surged. The government has therefore rightly embarked on a path of progressively cutting expenditures while taxes have had to be increased. But here there are no easy solutions either. Whether inside or outside a monetary union, fiscal consolidation would be required, in the best interests of the country.

Zeti Akhtar Aziz: Benchmark market indices - milestones in financial market progress Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of Citigroup Malaysian Government Bond Index & Dow Jones-RHB Islamic Malaysia Index, “Benchmark Market Indices - Milestones in Financial Market Progress”, Kuala Lumpur, 23 June 2005. *  *  *  Yang Berbahagia Dato' Sri Sulaiman Abdul Rahman Taib, Executive Chairman, RHB Capital, Dr. Zaha Rina Zahari, Chief Executive Officer, RHB Securities, Mr. Piyush Gupta, Country Officer and Chief Executive of Citibank Berhad, Distinguished Guests, Members of the media and Ladies and Gentlemen, "The use of benchmark market indices emerged on the financial scene as early as in the 1880's. In 1884, Charles Dow, journalist and founder of Dow Jones & Company produced the first Dow Jones Index, published in the company's 'Customer Afternoon Letter' which was later to become the Wall Street Journal. Of what we know, Charles Dow had always been a keen market observer. The haphazard idiosyncratic price movements of shares of individual or group of companies indeed did not lend itself to a coherent assessment of the performance of the market nor enable any meaningful analysis of market direction and investors' inclinations. This gave rise to the need for an index that reflects the broad market performance and investors' interest. This first market index was simple. Prices of 11 stocks, the most actively traded on the New York Stock Exchange, were averaged.