samchain/econo-pairs-v1 huggingface dataset:
The purpose of the measures has been to prevent their own currencies from appreciating in order to prevent inflation from falling and keep it closer to the inflation target than would otherwise have been the case. Foreign exchange market measures can be effective if there is a risk that confidence in the nominal anchor is being undermined by prospects for low inflation and it is not appropriate to lower the policy rate further. However, this type of measure also exposes the central bank’s equity to greater risk. In Norway, foreign exchange market intervention is not applicable in a normal situation. Division of responsibilities and level of ambition for economic policy Let me draw together the strands of my discussion so far. The introduction of the inflation target in 2001 laid the premises for today’s division of responsibilities in the conduct of Norway’s economic policy. Monetary policy pursues the objective of low and stable inflation and is the first line of defence in stabilising the economy. Fiscal policy contributes to stability within the framework of the fiscal rule. This framework has served us well for almost 20 years. The Norwegian economy is currently performing well, while there are some dark clouds on the international horizon. Hopefully, we are only seeing a period of slower growth, but a severe downturn cannot be ruled out. If such a downturn were to occur with policy rates as low as they are now, monetary policy space for major economies would be very limited.

Although evidence on the extent to which jobs have been lost due to global trade is inconclusive, job losses that are attributed to trade tend to be viewed differently. That is, they are seen as having been “lost to foreigners” and are often viewed as a consequence of the policy decision to liberalize trade in the first place. Having said that, the challenge of adjusting to open trade is a serious issue that has not received the degree of attention it fully deserves. This may partly reflect the fact that the burden has been borne unequally and spread out over a long time period. It also may reflect the fact that the winners from trade have often tended to have a stronger voice than those who have been the losers. 3/6  BIS central bankers' speeches  Research has documented that the effects on individuals of job dislocation—including those resulting from trade—can be significant and long lasting. Older workers tend to suffer larger earnings losses, and may face larger transition costs. Displaced workers may not have the appropriate skills to find good jobs in other areas of the economy, including in growing export sectors. When the affected industry represents a large share of the local economy, the damage is often magnified. In this case, the burden is more widespread because wages across the community are likely to be hit as well.
Mr Erçel reports on developments in the Turkish economy in the light of the recent disinflation efforts  Speech by Mr Gazi Erçel, Governor of the Central Bank of the Republic of Turkey, at the American-Turkish Council, held in Washington on 28 September 1999. *  *  *  Two years ago, in the summer of 1997, the crisis in Asia began to accelerate. One year ago, on 17 August 1998 a crisis erupted in Russia that threatened serious consequences not only for the Russian economy but also for the entire international financial system. By comparison, this year’s summer has been uneventful, except my country, which was struck by an earthquake on 17 August 1999. The earthquake has been devastating both in terms of human life and physical infrastructure. The death toll has risen to over 15,000 with over 25,000 injured. More than 200,000 houses were damaged or destroyed and over half a million people were left homeless. The spontaneous and prompt support from the international community together with domestic resources will cover reconstruction costs and we will recover. I have to emphasize that this tragic event will not derail our macroeconomic strategy, nor shall we allow it to jeopardize the hand-won disinflation achievements realized so far. Since Turkey has a long history of inflation, which is the main cause of macroeconomic imbalances, we have directed our efforts to reducing the inflation for quite some time. A disinflation program was launched at the beginning of 1998.

For example: •  their financial markets are typically more volatile than those in advanced economies, and so is their GDP growth, which at the same time is higher on average than in advanced economies;  •  these countries are also typically experiencing stronger credit growth, as their financial sectors are in the process of catch-up;  •  they usually have lower credit ratings and shallower government bond markets, which in some cases implies a lack of high quality liquid assets, a lack of adequate collateral etc. Saying that, I must stress that this difference does not apply to some; my country is a testimony to this;  •  the countries face a whole range of home-host issues, as many globally significant financial institutions operate branches or subsidiaries in those countries. These are just examples of features which could possibly interact with the Basel III framework in emerging economies in a way that was not originally intended. As I see from the topics covered by your workstream, you touch on all these aspects, so there is a chance  2  BIS central bankers’ speeches  that the paper that will emerge out of your contributions and out of the discussions you will have today will be useful for regulators in EMSEs and for the Basel Committee on Banking Supervision as well. Hopefully, today’s workshop will help you with this.
300  10000  Free floating  5000  200  0 90  92  94  96  98  00  02  04  06  08  10  12  14  16  18  82  85  88  91  94  97  00  03  06  09  12  15  18  (*) Foreign exchange rate defined as CLP per USD. Sources: Central Bank of Chile and De Gregorio, J., S. Edwards, and R. Valdés (2001), “Controls on Capital Inflows: Do they Work?” NBER WP 7645. All these elements allow monetary policy to operate as a first defense mechanism against external shocks in normal times. Besides monetary policy, the CBC has a financial stability mandate. Such mandate should be pursued by a combination of regulation, information, and macroprudential management. In particular, monetary policy tools should be used primarily to achieve the price stability mandate, and only as a last resort to deal with financial instability. The free-floating FX regime is perfectly consistent with achieving both mandates (price and financial stability), as (i) the inflation targeting regime is highly credible, and (ii) the corporate sector is well hedged against exchange rate volatility. High-level Policy Seminar on Integration or Fragmentation?

So, establishing and maintaining financial stability should be high up everyone’s agenda, and we should embed financial stability as the objective of public policy towards regulating the financial system. You can reasonably ask, why is this difficult to achieve? Financial stability is difficult to define quantitatively and precisely. Some people say that you know it when you have it, but it might be better to say that you know when you don’t have it. What is being done to tackle the issue? A month ago, the Government issued a consultation paper which seeks to define the financial stability objective that will be given to the new Financial Policy Committee of the Bank of England under its plans. The objective is defined at the high level as protecting and enhancing the stability of the financial system of the UK. More precisely, the Bank’s objective “relates primary to the identification of, monitoring of, and taking of action to remove or reduce” risk to the stability of the UK financial system as a whole or to a significant part of the system, “with a view to protecting and enhancing the resilience of the UK financial system”. But the paper goes on to include in the objective the statement that: this does not require or authorise the Bank “to exercise its function in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”.
But a sustained increase in pay over the forecast period without a commensurate pick up in productivity would mean that the supply side of the economy could not keep pace with growing demand. That would mean upward pressure on prices. And it would mean greater pressure on the MPC than in our forecast to act to bring supply and demand into balance so as to meet the inflation target. The outlook for pay and productivity So the gradual pick up first in pay and then in productivity is central to the MPC’s forecast for both growth and inflation particularly in the later years. Given the serial disappointments on both pay and productivity in recent years, why do we now think that will happen? On pay there do seem to be signs now of stronger, more sustained growth. In the latest data, whole economy regular pay is growing at 2.7%. This is the highest annual growth rate since early 2009 and over a percentage point higher than six months ago. The latest reading on private sector pay growth was 3.2% – the highest rate since December 2008. So the period of very cheap labour seems to be ending as expected. What about productivity growth? It was effectively zero in 2014. And we forecast it to remain pretty weak in 2015.

Regardless of whether we conclude that the repo rate must be increased soon or that it can be left unchanged for somewhat longer, the Riksbank’s commitment to price stability is intended to make a contribution to a path for output and employment in Sweden that remains stable. 5  BIS Review 84/2000
This is, of course, particularly true for those euro area countries that are currently under an EU/IMF programme or are experiencing disruptions in their sovereign debt markets. Much remains to be done, but we should not forget the steps that have already been taken – although there is no room for complacency. Based on a direct estimation of revenue and spending (rather than on the cyclically adjusted primary balance), the cumulative fiscal consolidation achieved thus far is in excess of 10% of GDP in each of the three countries under EU/IMF programmes. While some countries have, most regrettably, fallen behind the targets in their programme, the consolidation efforts are significant in absolute terms. One of the reasons why countries did not reach their headline deficit targets is to be found in the economic headwinds they are experiencing. Negative economic growth, higher interest  4  BIS central bankers’ speeches  payments and higher social security spending have led to quasi-automatic increases in expenditure and obscure the fiscal consolidation efforts. This stresses the importance of the implementation of well-designed and ambitious fiscal adjustment programmes being accompanied by growth-enhancing structural reforms. There is no doubt that the long-term effects of fiscal consolidation on growth and employment are positive and significant. Whereas fiscal consolidation may have a dampening effect on economic activity in the short run, the extent to which it does so depends on several factors, such as the composition of the fiscal adjustment. National authorities need to set ambitious and credible targets, and to stick to them.

For this reason, the ECB has been very clear that the measures it has taken are designed to be temporary in nature. Let me also emphasise that our non-standard measures do not in any way impinge upon our capacity to tighten our monetary policy stance in response to inflationary pressures. In all our actions, we have been careful to keep inflation expectations well-anchored and have remained faithful to our mandate to preserve price stability in the euro area over the medium term. Our mandate is what has guided, and will continue to guide, all our monetary policy decisions. But the success of the ECB’s crisis measures in maintaining monetary stability in the euro area should not let anyone believe that monetary policy is the medicine that can solve the underlying, more structural problems in the euro area. The lasting resolution of the crisis is the responsibility of the euro area governments. The euro area governments’ responses to the crisis Euro area governments face three main challenges. First, they need to address the internal and external macroeconomic imbalances. Second, they have to restore confidence in, and stability to, the European financial system. Third, they must deal with the remaining shortcomings in the institutional design of EMU. Let me elaborate on these factors in turn. First, the rebalancing of the euro area economies requires, first and foremost, that public sector expenditure is brought back to a sustainable path and that the debt overhang is reduced.
Pricing in different forward markets currently gives a slightly divided picture of what direction prices will take. The oil price has risen more than expected and forward rates imply that it may remain at a higher level. At the same time, the world market price for certain foods and metals has fallen in recent weeks, for instance, the price of wheat, meat and aluminium. However, the price of some other foods, such as rice, has risen recently. …but we must nevertheless take a stance But regardless of whether the international price impulses are temporary or more lasting, they must not be allowed to push up inflation permanently! In my opinion, the risk of this has increased in that inflation expectations have risen during the autumn. According to Prospera’s survey in April, however, expectations have fallen slightly. The National Institute of Economic Research’s Consumer Tendency Survey also indicates that households’ inflation expectations have been adjusted downwards since the February report. But expectations are still a little too high, particularly in the longer term. And this was one reason why I voted to hold the repo rate unchanged at 4.25 per cent at our most recent meeting. Other important factors behind my stance were that, according to our forecast, inflation will overshoot the target for a good while to come, at the same time as growth remains fairly robust. Weighing together these factors also indicated that the interest rate may need to remain at its current level for some time to come.

Second, an increase in the pace of productivity improvement may have made it possible for output to grow more rapidly without adding to inflationary pressure. On the face of it, however, there is little evidence for this hypothesis. Productivity in the private sector - measured as output per hour worked has grown at an annual rate of around 2 ½ % since 1995, around the average rate in the period 1980-1995. In the United States, private sector productivity growth increased from 1 ½ % in the earlier period to almost 3% after 1995. It is striking that productivity growth in the private sector was higher in  BIS Review 61/2004  1  Britain than in the United States for most of the past quarter of a century, although our level of productivity remains inferior. Only in the past few years has American productivity accelerated. No such change is yet visible in the official data for the United Kingdom. It is possible that the effect of productivity improvements, especially the temporary boost to profits, was obscured by the impact of the rise in sterling since 1996 and by global competition which have lowered prices and compressed margins. So it is too soon to dismiss the possibility of an acceleration in productivity similar to that experienced in the United States. Indeed, productivity growth has increased to more than 4% over the past year.
The chart shows that Norges Bank’s changes in the key rate have less impact on money market rates now than earlier. In recent years, there has been an international trend towards increased focus on the need for monetary policy transparency. Under the auspices of the IMF and others the "Code of Good Practices on Transparency in Monetary and Financial Policies" was drawn up, which emphasises the importance of clarity, transparency and evaluation in monetary policy. This view of transparency and predictability contrasts sharply with the earlier practice of playing on the element of surprise. In monetary policy, this was associated especially with control of the exchange rate. In many countries, this approach was met with deteriorating credibility and high premiums for uncertainty. The effects of changes in monetary policy instruments became increasingly uncertain. Nevertheless, the consideration of predictability must not overshadow Norges Bank's obligation to set the interest rate at the level deemed appropriate by the Bank. The expectations of other economic agents must not control the setting of interest rates. There are a number of examples from countries with "transparent" monetary policies where interest rate changes have come as a surprise. This may  10  BIS Review 74/2001  be partly due to the fact that the central bank had a different view of the outlook for economic developments. Norges Bank has sought to promote transparency, for example by publishing our interpretation of the mandate for monetary policy and our assessment of the implementation of monetary policy.

According to Dr S Arsaratnam 4 , both the Sinhala kings and the Dutch used Arabic traders to export elephants, gems, areca nuts and spices, and import rice, textiles and other requirements in the 16th to early 18th centuries. The British period that followed the Dutch rule is marked by a continuation of the open-economy policy pursued by ancient Sinhala kings. During this period, the country continued to rely on foreign trade for wealth creation and maintaining high standards of living. Hence, the reliance on services, especially commercial services, for wealth creation was not a new policy paradigm for Sri Lanka. Around the time Sri Lanka gained independence from the British rule, the country’s GDP was distributed in the proportion of 46 percent for agriculture, 20 percent for industry and the balance 34 percent for services. The high share of both agriculture and industry amounting to about a two-third of GDP indicated the prevalence of a limit for their continued growth devoid of a vibrant and efficient services sector. This anomaly was to be gradually, and in a slow pace, corrected in the subsequent five decades. In 1960, a slight improvement in the respective shares was observed with agriculture falling to 38 percent and services rising to 45 percent. The period since then recorded a virtual stagnation of services till early 1980s when the country moved to an open economy regime.
For example, legislation currently before Parliament will explicitly make price stability the primary objective of monetary policy, strengthen the legal and operational independence of the Central Bank of Malta and formally prohibit central bank financing of public sector deficits. In practice, the Central Bank has been formulating monetary policy independently since 1994, using market-based instruments, including open market operations and reserve requirements, which are similar to the ones currently used by the Eurosystem. The adoption of the euro would be the final step in a process linking the Maltese economy and the euro area. Compared to the current regime it offers a number of additional advantages, which are highlighted in the literature on optimum currency areas. Specifically, it should reduce transaction costs; result in lower interest rates in Malta; ease access to the growing European financial market; and lead to more transparent pricing of goods and services. It should also act as a spur to the integration process with the EU since countries with the same currency tend to trade more with each other. From an institutional point of view, it should allow Malta to be represented in the decision-making processes of the European System of Central Banks (ESCB) that affect it even today. Here I would like to support the view put forward recently, among others by Governor Wellink of De Nederlandsche  BIS Review 46/2002  1  1  Bank , about the need for adequate representation of national central bank governors in the decisionmaking bodies of the ESCB.

Unlike most accession countries, Malta has always had a functioning market economy, driven by private ownership of productive assets and with much of it exposed to international competition. In general, therefore, the private sector has already proved that it can cope with adverse shocks. In this regard, the flexibility of the labour market has been especially important. This flexibility must, however, be enhanced in order to safeguard competitiveness. The EU accession process itself has stimulated important structural reforms in product and factor markets, ranging from the removal of barriers to trade to the liberalisation of the telecommunications industry. The privatisation of state-owned firms has also triggered important inflows of foreign direct investment, while the restructuring of the shipyards – a key employer - has begun to yield positive results. The pace of reform must, however, be sustained if we are to secure the productivity gains that would increase competitiveness in the tradable sector, buttress the exchange rate peg and bring about real convergence. Another crucial precondition for maintaining the exchange rate peg and ensuring a smooth transition to the single currency is financial sector stability. In this respect, a regulatory and supervisory framework based on high international standards is already in place. Maltese legislation in this area in fact incorporates almost all the features of the corresponding EU directives, and legislative amendments currently before Parliament will bring about almost total harmonisation.