samchain/econo-pairs-v1 huggingface dataset:
The number of employees has grown steadily since the beginning of 2012, with the growth being especially pronounced during 2013 (over 4%) on an annual basis, as a combination of the labor demand by new companies (the number of companies with a large number of employees began to grow faster exactly in 2013), the active measures on the labor market, and the gradual intensification of the activity of the rest of the economy. The unemployment rate, though still high, is constantly declining and according to the latest data it is 27.9%. What is important is that its reduction is a combination of the decline in the number of unemployed persons, and the larger number of active population. The participation rate reached 57.3%, which is an upward adjustment of about 1 percentage point compared to 2008 and is a sign of the positive perceptions of the conditions on the labor market. As expected, the indicators of productivity and unit labor costs also register positive movements starting from this year (increase in productivity and decline in costs by about 2% on average in 2014). Although these indicators are still less favorable compared with the pre-crisis performances, given the growth of the economy, this gap is gradually decreasing. In the medium term we expect further narrowing of the gap. The banking system provides additional credit flows in the economy, whereby it actively supports the economic growth.

So we can be thankful that, when the crisis erupted, you were once more in a position of influence. You reminded us that the euro has always been more than just a currency, and your unyielding defence of Europe was a bulwark in those febrile times. This is best captured in your belief that “if a solution is good for Europe, it is good for Germany; and if something is bad for Europe, it cannot be good for Germany.”1 Of course, there have been different views about what constitutes a “good solution” for Europe, such as the appropriate balance between sharing risks and reducing risks. 1/3  BIS central bankers' speeches  But I was always struck by the fact that, once you had agreed a way ahead with your European partners, you defended it with conviction. I know that this was not easy: you had to tread a careful path between maintaining confidence in the euro at home and making the necessary reforms to safeguard the single currency. The fact that 81% of Germans back the euro today, and the euro is more popular than ever among the wider European public, is testament to your skill in navigating that course.2 What allowed you to achieve this was your second quality: your intellectual rigour. I have had many occasions to observe your forensic mind at work. You combine the subtlety and foresight of a statesman with the scrutiny and attention to detail of a tax lawyer.
Moreover, households’ interest rates may rise without the Riksbank raising the repo rate – if problems arise in the banking sector that mean the banks’ financing costs rise. If the global tendencies that have pushed down the real interest rate are reversed, this would most probably push up interest rates in Sweden too. And one should remember that it is easy to increase the debt when the interest rate is low, but more difficult to reduce it when the interest rate is high. Figure 4: Indebtedness as a percentage of GDP  Note. Per cent of GDP. Source: Statistics Sweden  Almost all major financial crises have been preceded by a large increase in credit volumes. 7 There is no consensus on why this is the case, but I believe that increased leverage means increased risks. Moreover, if short market financing becomes more common when credit grows rapidly, the risks linked to banks’ short-term liquidity management increase. The global financial crisis concludes the Great Moderation The dream of a world where fine-tuning monetary policy eliminates cyclical fluctuations and leads to an entirely stable economic development was definitely  7 See, for instance, Jorda et al. (2013). 7 [25]  burst by the financial crisis 2008-2009. In the United States, the foundation for the crisis was created when borrowers with weak debt-servicing ability were given the opportunity to take large loans with their homes as collateral.

After a few years of getting used to this new way of conducting monetary policy, there was a long period of relative calm in large parts of the world. Many countries introduced a similar policy that had the more or less explicit target of holding inflation close to 2 per cent. From the middle of the 1990s until 2008, inflation was on average fairly close to the target and developments in the real economy were more stable than before. Blanchard and Simon (2001) were among the first to document this phenomenon, which came to be called the ‘Great Moderation’. But even then, there were discussions of whether the phenomenon was due to structural changes, skilful macroeconomic policy, including monetary policy, or quite simply luck. At the beginning of the 1990s, the Riksbank's balance sheet grew in connection with the foreign currency reserves being reinforced through loans (see Figures 1 and 2). When the fixed exchange rate was abolished, it was decided that there was less need to hold foreign currency reserves for monetary policy purposes and the size of the balance sheet declined fairly rapidly. Between 1994 and 1998, domestic bond positions were sold off and foreign currency loans were repaid. 4 Instead, the Riksbank conducted monetary policy with a minimal toolbox in this new environment. The repo rate, which is the base for the lending and deposit rates the Riksbank applies with regard to the commercial banks, was adjusted to ensure monetary policy was well balanced.
There have been few structural reforms in the last few years that would justify higher expenditure by firms and households as they revise up their future income. And this is especially true for reforms to product markets and the business environment, which typically have the strongest impact on current spending. So based on simple growth accounting, there are only two “exogenous” factors left that can realistically explain the resilience of the recovery: the collapse in oil prices in 2014–15 and our monetary policy. And this is also what we find in our internal model-based estimates, which show that growth has been highly reliant on these two forces. All told, we estimate that half of the extra GDP growth achieved during the current recovery has been attributable to our policy, with a material contribution from oil prices as well. This central role played by monetary policy can be further demonstrated by looking at the channels through which our policy has been working. One channel has been the divergence of monetary policy cycles across advanced economies since mid-2014, and its consequences for exchange rates, which have helped insulate euro area exporters from weakening global demand. They have in fact been able to maintain or even regain market shares as world trade has slowed. But still more important has been the effect of our policy package on the domestic economy. As I have outlined in detail elsewhere2, since we adopted our credit easing package, we have seen a substantial easing in financing conditions for the euro area economy.

Second, in countries where formal wage indexation has declined sharply during the crisis, the pass-through of headline inflation to wages may have weakened. Third, that pass-through also depends in part on labour market slack, since in an environment of high unemployment trade unions may be prepared to prioritise job security over some loss in real wages. In short, for the time being there are grounds for being cautious when assessing the durability of the inflation outlook. For us to be confident that inflation will indeed stabilise around our aim, we would need to see clear evidence that underutilised resources are declining and feeding through more convincingly into domestic price formation. For that, it is clear that continued support for demand remains key. And this provides the answer to the third criterion: we are not yet at a stage when inflation dynamics can be self-sustaining without monetary policy support. The recovery of inflation still depends on the very favourable financing conditions that firms and households enjoy, which in turn depends on the substantial degree of monetary policy accommodation we have in place today. Accordingly, our inflation projections still include a material contribution from monetary policy over the next two years. For this reason the Governing Council at its last meeting confirmed the appropriateness of the current very accommodative monetary policy stance. The monetary policy stance is still appropriate Yet it is important to understand that our stance is no longer determined by just one tool, policy interest rates.
Ravi Menon: What does it take to get to net zero Keynote speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Economic Society of Singapore Annual Dinner 2022, Singapore, 17 August 2022. * * * ESM Goh, Dr Euston Quah, distinguished guests, ladies and gentlemen. It is both an honour and pleasure to speak to you. There are many pressing issues I could talk about today. The world is just emerging from the most devastating pandemic in over a century, with far-reaching changes whose effects will be felt for years to come. A major war has broken out between the two largest countries in Europe, heightening geopolitical risks and setting off a food and energy crisis across the world. The global economy is facing the sharpest surge in inflation and fastest pace of monetary policy tightening in 40 years, with highly uncertain consequences. Instead, I want to talk about what I think is the mother of all challenges facing the world today, and for the next few decades – climate change. Long after our conjunctural challenges of war, disease, and inflation are behind us, the climate crisis will still be with us, only more intense, more urgent, more disruptive. CLIMATE CHANGE Climate change is already happening. Over the last three decades, the number of registered severe weather events has tripled. Over the last two decades, the rate of increase in sea levels has doubled.

Providing these poor people a dignified standard of living would require doubling their rate of energy consumption. According to the International Energy Agency (IEA), the energy transition to achieve netzero is doable but difficult. First, even when the world achieves net-zero emissions, fossil fuels will be with u s . Energy demand in Asia is expected to double by 2030 on the back of strong economic growth, rising affluence, and urbanisation. Even if overall global energy use falls in the net zero scenario, it will increase in many of the poorest countries. Fossil fuels will continue to play an important role in meeting the energy demands of Asia and Africa. Coal is unlikely to have a role in a net zero world but oil and gas will. The IEA has projected that if the world reached net zero by 4/9  BIS central bankers' speeches  2050, it would still be using nearly half as much natural gas as today and about one-quarter as much oil. Second, solar and wind power will need to be the largest energy source. The cost of solar and wind energy has fallen dramatically over the past decade and the amount of power generated through these renewables is rapidly catching up to that generated by coal. The IEA has projected photovoltaic capacity jumping twenty-fold between now and mid-century. This is no mean task – it implies by 2030 installing every day the generation capacity of what is currently the world’s biggest solar farm.
As I hope I have demonstrated, the Bank is making strides to close this gap in a fair and sustainable manner that empowers all colleagues at the Bank. Nonetheless, the disclosure helps everyone to track progress and hold the Bank to account. To that end, HR publishes diversity metrics by division every quarter. The internal committee of Governors as well as the Court of Directors (the equivalent of our Board) regularly review and discuss the Bank-wide and divisional figures to identify areas for improvement. In 2018 we were also one of the first organisations to conduct and publish a special Cognitive Diversity Survey to gain a better understanding of how our colleagues feel about working at the Bank. The survey measured seven inclusivity metrics including interpersonal interactions, flexible working, communication with leaders as well as recruitment and promotion, and results are cut across twelve different aspects of diversity. Our results indicate colleagues are generally positive about inclusiveness at the Bank on every metric measured by the survey. 80% of colleagues in our annual employee survey reported that the Bank takes diversity seriously, seven percentage points higher than the UK average. And 87% of Bank colleagues say they are treated with respect as an individual, six percentage points higher than the UK average. These survey results and the progress against our targets are encouraging, but there is always more to do. And diversity is, of course, about more than gender, including ethnicity, age, disability, sexual orientation and socio-economic background.

Second, participation rates within the labour force have increased significantly, both prior to the crisis and over the past couple of years, especially among women and older age cohorts. This reflects a range of factors including the abolition of the default retirement age, concerns about the adequacy of pension and saving income and changes to the benefits regime. Third, levels of immigration have increased significantly over the past 20 years, boosting labour supply. There is an active debate on its effects on the wage distribution. For example, Dustmann et al (2013) find that each 1% increase in the share of migrants in the working age population leads to a 0.6% decline in the wages of the 5% lowest-paid workers. Several studies report similar results (Migration Advisory Committee (2012)). At a headline level, these polarising patterns are also clear in aggregate wage data. According to contacts of the Bank’s Agents, staff shortages are rising in highly-skilled professions such as IT, engineering and construction. Furthermore, the Recruitment & Employment Confederation (REC) survey suggests that the annual rate of wage inflation for new hires is now above 4% (Chart 19). But measures of economy-wide average weekly earnings (AWE) paint an altogether different picture. Annual rates of wage inflation are currently around 0.7%, below the rate of inflation. Put differently, the jaws between the wage growth of the highly-skilled and the rest of the economy are wide and have widened.
The task of the central bank is to provide the financial system with liquidity when needed. As we know, this has also taken place to a large extent. However, there are limitations to what the central banks can do. Other measures must be taken for banks with inadequate solvency. For these purposes a functioning order to handle banks in insolvency is needed. Where taxpayer money is involved, the process must be carried out on  BIS Review 125/2008  5  condition that the socioeconomic costs are minimised and that the owners of the financial institutions that are taken under public administration must carry their own losses. The coordinated crisis package that the Euro countries launched earlier this week contains the essentials and largely offers the desirable components for such a package. After the Lehman Brothers bankruptcy it became clear to financial market participants that even the largest financial enterprises could fall. This insight caused the freezing of the markets that has now lasted for almost a month. Promises by leading nations that this will not be allowed to happen again will hopefully help to thaw the financial markets. It is both welcome and desirable that the government support measures are accompanied by tough counterdemands on the banks. The Swedish government has announced that it intends to carry out a nationally adapted version of this crisis package in Sweden.

And just for the sake of clarity, let me add that this view is in no way related to any such situation being present in Sweden. This is something that the Riksbank has advocated for a long time. In light of what happened in the United States we should also consider regulation of institutions that do not take deposits from the public. Such institutions are often the subject to weaker supervision and regulation, which has been justified because they are not as important for financial stability. But as the developments in the US investment banks clearly illustrate, even such institutions can substantially shake up the financial system. Given the global scope of the crisis it is important to coordinate both short-term and longterm measures among countries. If nations try to find separate solutions in this type of situation, the costs for handling the turmoil could become even greater than what they otherwise would have been, even for individual countries. Therefore, in all of the issues mentioned here, much can be won through international coordination and harmonisation. Yet another example of an issue that requires international coordination is how to organise supervision and crisis management within the EU. Today several banks engage in significant operations in several EU countries, while the responsibility for supervision and crisis management is still national. Under such circumstances there is a risk that coordination problems and conflicts of interest could arise between countries, which obviously does not benefit financial stability.
However, later research has shown that in the longer term there is no connection between inflation and unemployment. At the same time, I believe that the problems in the 1970s and 1980s could partly be explained by the Swedish economy being unable to manage the low unemployment we had then without excessive price and wage increases ensuing. For me, one of the most important tasks of economic policy over the coming years is to bring down unemployment. However, the Riksbank is unable to do very much about this. The Riksbank’s contribution is to safeguard the inflation target and in this way create favourable conditions for growth and employment. All in all, my picture is still that the Swedish economy has functioned much better over the past ten years than in the 1970s and 1980s. Things are better now. Current monetary policy The other part of my presentation is concerned with economic developments and current monetary policy and the reasons why the Executive Board of the Riksbank decided at its most recent monetary policy meeting on 22 February 2006 to raise the repo rate by 0.25 percentage points to 2 per cent. The Riksbank’s view of economic developments over the coming years is presented in the Inflation Report, which was published at the same time as the interest rate decision. This part of my presentation does not contain any new information or new assessments in relation to the February Inflation Report and the separate minutes of the Executive Board meeting.

I have also had reason to go over how fiscal policy has been managed, since leaving the Ministry of Finance in 1997 to become head of the National Institute of Economic Research and later General Director of Statistics Sweden in 1999. In June 1999, Finance Minister Bo Ringholm appointed me to assess the reformed budget process. The budget process had been reformed in stages since the end of the 1980s. Following the assessment and with broad political agreement, a Budget Act came into force on 1 January 1997. It contained regulations on, for instance, an expenditure ceiling and guidelines for public expenditure. The main conclusion of the assessment was that the new budget process had functioned well. It had contributed to public expenditure as a percentage of GDP being reduced significantly and to public sector financial saving being turned around from a large deficit to a surplus. Of course, there had been some creative accounting to bring public expenditure under the ceiling, but this was on a relatively small scale. The changeover in exchange rate and monetary policy In 1992, when the fixed exchange rate for the krona could no longer be defended, and we changed over to a floating exchange rate, Sweden found itself in a situation where it had not been since the 1930s. The krona was floating and the fixed exchange rate could no longer function as a nominal anchor for monetary policy.
Last but not least, if Switzerland were to give up its monetary independence by pegging the franc to the euro or by joining the euro area, it would lose its privileged status and, consequently, Swiss interest rates would increase to European levels. Since higher interest rates mean lower asset prices and lower levels of investment, and also higher mortgage rates, the Swiss are understandably not keen on giving up their national currency. Since any major decision in Switzerland has to be approved in a public referendum, the prospect of EU and euro membership in the near future is thus highly unlikely. Given our exposure to global economic and financial shocks, and their arguably smaller importance for the euro area, pegging the Swiss franc to the euro is not a realistic option. Flexible exchange rates give us the room for manoeuvre we need. •  What has our experience been of coexistence with the euro so far? Very positive. Rather than crowding out independent currencies, the euro has stabilised the monetary scene in Europe. In fact, the franc is less volatile today than it was before European monetary integration. The price of the euro in Swiss francs these days is about 3% lower than it was in 1999, in other words, almost unchanged. We did have periods, however, when the franc was under pressure, especially after September 11 and before the outbreak of the war in Iraq. The safe-haven function of the franc then triggered a 10% appreciation in our currency against the euro.

Since the introduction of the euro in 1999, the average interest rate on three-month euro deposits has been 3%, while the three-month Swiss franc rate has been 1.4%. If we assume a difference of about 1% in the expected level of inflation between the euro area and Switzerland, the Swiss real interest rate advantage accounts for 60 basis points. •  Switzerland is also a firm believer in flexible exchange rates. Our monetary regime has been unchanged since 1973, when the peg to the US dollar was removed. Today, the Swiss franc is freely determined by market forces. Our last foreign exchange intervention dates back to 1995 – and that was a coordinated action in favour of the US dollar! •  And what about the European issue? As you know, we are not a member of the European Union; nor do I foresee Switzerland joining the EU in the near future. The Swiss people remain sceptical about the efficiency of the Union and are very aware of what they stand to lose in terms of political rights and economic freedom in the event of integration. But our relationship with the EU is of key importance, since Europe accounts for two-thirds of our foreign trade. In order to secure our access to the European market and to avoid discrimination, we concluded two packages of bilateral agreements with the Union – in 2002 and 2004.