samchain/econo-pairs-v1 huggingface dataset:
The system of (interest-bearing) minimum reserves has contributed towards smoothing out daily liquidity fluctuations in the money market, whilst the “standing facilities” effectively limit fluctuations in the money market interest rate. The efficiency of this set of instruments can be demonstrated by the fact that the Eurosystem has been able to manage to date without having recourse to any fine-tuning operations in the money market. In fact, developments in short-term money market interest rates have thus far been exceptionally stable and money market rates have been relatively close to the interest rates at which the ECB has provided liquidity through its weekly main refinancing operations. This is a notable success, as is the extremely rapid integration of the money markets in the euro area, in which, since January, temporary interest rate differentials have been rapidly eliminated during the day through arbitrage by active market participants. Initial monetary policy decisions Conditions at the start of the introduction of the euro were favourable, given a rate of inflation of below 2% (measured by the Harmonised Index of Consumer Prices) and moderate monetary growth rates in the two years leading up to the beginning of Monetary Union. However, the outlook in the euro area became increasingly gloomy in the second half of 1998 as a result of the crises in Asia and in Russia, thereby causing inflationary pressure to weaken further. The central banks of the participating countries reacted by reducing short-term interest rates.

Henrique Meirelles: Brazil-Argentina Local Currency Payment System Speech by Mr Henrique Meirelles, Governor of the Central Bank of Brazil, at the Inauguration of the Brazil-Argentina Local Currency System, Buenos Aires, 2 October 2008. *  *  *  It is an honor to attend today the launching of the Brazil-Argentina Local Currency Payments System (SML). I am certain that this initiative will be a watershed in the bilateral relations between the two nations. Coincidentally, the new system kicks off in a period of financial turmoil and liquidity crunch in international trade, in which cooperation among central banks becomes fundamental to facilitate trade and to deepen economic ties. Central banks are responsible for ensuring adequate international payments systems. In processes of economic, financial and trade integration, the objective is to establish an efficient payments structure for intra-regional transactions. When flexible and unobstructed payments systems are available, trade transactions flow with greater ease and lower costs, and financial flows tend to intensify. This is what we expect from the new SML system. Initial obstacles have been overcome. The mechanism of the SML will trigger significant changes in the way in which companies export and import. In Brazil, exporters may now operate in real, while Argentine businesspeople may operate in pesos. Each one of our countries established a consistent framework for management of the system.
Or other macro-economic 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  factors may have more than offset their impact in order to keep inflation stable. How the evidence is reconciled could have important implications for inflation dynamics and the setting of monetary policy. 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  References  Abdih, Y and Danninger, S (2017), ‘What Explains the Decline of the U.S. Labor Share of Income? An Analysis of State and Industry Data’, IMF Working Paper, No. 17/167. Acemoglu, D and Restrepo, P (2018), ‘Artificial Intelligence, Automation and Work’, NBER Working Paper, No. 24196. Aghion, P, Bloom, N, Blundell, R, Griffith, R and Howitt, P (2005), ‘Competition and Innovation: an Inverted-U Relationship’, Quarterly Journal of Economics, Vol. 120, No. 2, pp. 701-728. Andrews, D, Criscuolo, C and Gal, P (2016), ‘The Global Productivity Slowdown, Technology Divergence and Public Policy: A Firm Level Perspective’, Hutchins Center Working Papers. Autor, D, Dorn, D, Katz, L, Patterson, C and Van Reenen, J (2017), ‘The Fall Of The Labor Share And The Rise Of Superstar Firms’, NBER Working Paper, No. 23396. Baldwin, R (2016), The Great Convergence: Information Technology and the New Globalization, Harvard University Press. Ball, L and Romer, D (1990), ‘Real Rigidities and the Non-Neutrality of Money’, Review of Economic Studies, Vol. 57, No. 2, pp. 183-203. Baquee, D and Farhi, E (2018), ‘Productivity and Misallocation in General Equilibrium’, NBER Working Paper, No. 24007. Barkai, S (2017), ‘Declining labor and capital shares’, London Business School.

36  All speeches are available online at www.bankofengland.co.uk/speeches  36  Chart 16: Mark-ups and the slope of the Phillips curve Slope of Phillips curve  0.3  0.2  0.1 Estimated increase in global mark-ups 0.0 1.0  1.2  1.4  1.6  1.8  2.0  Mark-up level Sources: De Loecker and Eeckhout (2018), Galí (2008) model and Bank calculations. Notes: Parametrisation such that 𝛽 = 0.99, 𝜃 = 2/3, 𝛼 = 1/3, 𝜑 = 𝜎 =1. Chart 17: Global mark-ups and real interest rates Mark up  Per cent 3.5  1  3 1.2  2.5 2  1.4 1.5 1  1.6  0.5 0  1.8 1980  1984  1988  1992  1996  2000  2004  2008  2012  2016  Laubach & Williams estimate of US natural rate of interest (LHS) Global mark-up (inverted, RHS) Sources: Updated estimates from Laubach and Williams (2003) (available online), De Loecker and Eeckhout (2018) and Bank calculations. Notes: Estimate of US natural rate of interest shown here uses annual averages of quarterly Laubach and Williams estimates. We would like to thank Jan De Loecker and Jan Eeckhout for kindly sharing their series of global mark-ups.
This is shown for the UK in Chart 14. The crisis has tended to reinforce these trends. Unemployment among the highly-skilled rose less during the crisis (Chart 15). With employment growth strong (Chart 14), unemployment within the highly-skilled sectors has returned to close to pre-crisis levels. By contrast, unemployment rates among the mid-skilled rose by more during the crisis (Chart 15). In keeping with pre-crisis trends, employment has contracted (Chart 14). Meanwhile, for the lowest skilled the picture is more nuanced. While suffering most during the crisis, they have also benefitted from rapid rises in employment during the recovery (Chart 14). In principle, these patterns of employment ought to have been reflected in real wages. We might expect wages to have risen at either end of the skill distribution, but potentially to have stalled for the mid-skilled. There would have been a “hollowing out” of wages, but the aggregate wage distribution ought to have been relatively static. In practice, the distribution of wages has not been static; it has widened over the past 20 years (Chart 16). In the late 1990s, wages for the top 10% of earners were around 6.5 times higher than the bottom 10%. Today, the figure is closer to eight. Or, put differently, in the decade prior to the recession, real wages for the top decile rose on average by 3% per year, while for the bottom decile they rose by around half that. Since the crisis, there has been an across-the-board squeeze on real wages (Gregg et al (2014)).

This is what I intend to talk about today. What should we consider when we evaluate monetary policy? What are the principles for a good  1  The evaluation of monetary policy in New Zealand and Norges Bank Watch 2002 are available on my website: www.larseosvensson.net. BIS Review 29/2009  1  evaluation of monetary policy and what is practically possible? How can principles and practice be developed compared with how evaluations are carried out today? Here I present a number of preliminary proposals for such development. Why not just examine whether inflation deviates from the target? An increasing number of central banks focus their monetary policy on achieving an inflation target. My discussion today will therefore be about evaluations of monetary policy with an inflation target. Given this, you may ask why an evaluation of monetary policy should be so complicated. When there is an inflation target, is it not simply enough to compare the actual outcome for inflation with the inflation target; that is to evaluate monetary policy after the fact? There are at least two circumstances that make such an evaluation inadequate. Unforeseen shocks affect outcomes First, monetary policy does not provide complete control over inflation. A central bank is therefore unable to ensure that inflation will be exactly on target at every point in time. In actual fact, monetary policy is conducted under conditions of great uncertainty.
They raise the risk that future shocks to domestic confidence or adverse changes in the external environment could lead to new pressures on exchange rates, on interest rates, and on the capacity of countries to fund themselves on sustainable terms. Apart from the risk of crisis, these debt levels are large enough to depress domestic investment and long-term growth prospects. In part because of these balance sheet and debt burdens, many emerging market economies face a protracted transition before they can expect to be comfortably considered stable investment grade credits, with sufficient levels of self-insurance against external and domestic challenges to financial stability. One of the most pressing challenges for the Fund is to help assist in this process of reducing vulnerability, by promoting an unwinding of these large balance sheet risks and, at the same time, providing a credible form of contingent insurance for those hopefully rare circumstances when its members face extraordinary financing needs. The Fund would be better able to contribute to this process if it were to strengthen its policies in a number of specific areas. My suggestions cover four types of reforms: changes to the substantive focus of Fund policy advice; to the relationship between the Fund and its members in the surveillance framework; to the Fund’s approach to countries undertaking a debt restructuring; and to how the Fund uses its financial resources.

Jointly with several countries in the region, we were positioned in the group of efficiency enhancers, meaning that reforms must be intensified to increase the growth efficiency and quality. Increasing the technological readiness was one of the identified priorities. Thus, in the last decade, the Macedonian productivity level has been staggering to around 40% of the level of advanced economies, such as German economy. This clearly points that if we want to grow at stronger pace and in a more sustainable, green and inclusive way, we need to continue intensively addressing the structural hurdles for the key long-term determinants of the growth: labour, capital and productivity. Let me focus on productivity. At this point, I think I can bring in the highlight of the latest Transition Report, i.e., innovation and digitalisation of the economies. The adoption of digital technologies can unleash productivity revival and possibly counteract some forces that act as drag on growth, such as adverse demographic and emigration trends that dampen the labour supply. What is the pace of digitalization of the Macedonian Economy? The new EBRD digitalization index points to a progress in both segments that are captured by the index – first, the preconditions for the use of digital technologies (digital infrastructure, skills, regulation, provision of government services), and second, the actual use of digital technologies by individuals and companies. The progress is particularly visible in the area of regulation and provision of government services, where score has more than doubled.
Mr. Erçel explains developments in the Turkish economy that help in understanding the country’s market opportunites Speech by the Governor of the Central Bank of the Republic of Turkey, Mr. Gazi Erçel, on the occasion of the Conference on “Private provision of infrastructure in Turkey” held at Çiragan Palace in Istanbul on 3/4/97. For a comprehensive understanding of the opportunities offered by Turkey’s market, I should stress the implications of our journey toward liberalisation. In 1980, with world conditions changing and the domestic economy in crisis, Turkey launched a structural adjustment program based on free market principles and an outward-looking economic policy. Since then, a series of liberalisation measures have been taken. The most significant accomplishment of the Turkish liberalisation process is that it has restructured economic relations. Both the financial system and the foreign exchange system have been liberalised. Before discussing Turkey’s economic performance, I would like to describe some features of our foreign exchange system and financial system. Let me begin with the foreign exchange system. Efforts to liberalise Turkey’s balance of payments go all the way back to the Great Depression, and ever since the 1930’s, the issue has been whether to liberalise the current account or the capital account. Now these questions have been settled. Let me summarise the state of the foreign exchange regime under five headings: 1. Residents are permitted to buy, sell, and use foreign exchange freely. 2.

In addition, the return of the Istanbul Stock Exchange, though volatile, increased substantially this year. Market volatility creates liquidity and great trading opportunities. When I talk about money markets I mean the Turkish lira money market and the foreign exchange cash and deposit market, open market operations, and government securities auction markets. These markets, which were introduced as a part of the financial sector reforms, have increased the effectiveness of the central bank’s control over the liquidity in the financial system, and increased the role of market mechanisms in money management. When market mechanisms began to play a larger part in the allocation of resources, the responsibilities and instruments of the central bank also changed, bringing the issue of central bank autonomy onto the agenda of the Turkish economy. Turkey now has a well established and efficient system of financial markets. The main obstacle at present to the functioning of the financial markets is our large public sector borrowing requirement, which crowds out other demands for financing. The inability of domestic resources to cover the financing needs of the public sector has kept real interest rates very high for over a decade. Bold privatization efforts, broadening the tax base, and reforming the social security system are the best ways to correct this situation, and I may say that they are all under way. Macroeconomic stability and political stability are the keys to achieving sustainable growth in a low inflation environment. BIS Review 42/1997
But countries are staring down the barrel of increasing expenditures and decreasing revenues… Countries will experience a deep recession that will have an impact on their public finances. This will entail greater funding needs, of between € trillion and € trillion, an amount the likes of which we’ve probably never seen before. They will also issue public debt to finance themselves, which is precisely why the ECB’s intervention in the bond markets aims to avoid fragmentation at an extremely difficult time. The ECB balance sheet is overflowing with debt from euro area countries. Where will this end? Is it possible that in the future this debt could be forgiven or written-off? Debt levels in the euro area are sustainable and when this crisis is over, economic conditions will get back to normal. We are not looking at any scenarios where this debt is a problem. It’s not a scenario I’m considering. Nevertheless, EU institutions are going through a severe crisis as they finance the cost of the pandemic. At the most recent EU summit and last Eurogroup meeting, we saw unprecedented clashes involving EU founding members, such as Italy. Europe currently has three main instruments at its disposal. First, the EIB guarantee fund that I mentioned previously, with € billion made available to provide support of up to € billion.

In periods of zero interest rates, such purchases help to counter the risk of deflation. The Swiss economy faces an exceptionally difficult year in 2009. Economic activity is set to pick up again gradually over the course of 2010, thanks to the extremely expansive monetary policy. This is, however, conditional upon an economic recovery by our main trading partners, as well as a return to stability on financial markets. The SNB measures are also aimed at reducing the risk of deflation in Switzerland. Despite the creation of massive amounts of liquidity, the SNB remains committed to ensuring price stability in the future. We will use all means at our disposal to reduce liquidity again in good time, so as to prevent any upsurge of inflation in Switzerland once the crisis has ended. BIS Review 33/2009  1
19  This is not to suggest that Gallatin was opposed to government-sponsored infrastructure projects. Indeed, in 1808, he presented the Gallatin Report on Roads and Canals. As he put it at the time, the vision of roads and canals to link up the young nation “could not be left to individual exertion.”  20  The federal debt stood at approximately USD 83 million when Gallatin took office in 1801. By 1808, Gallatin had succeeded in reducing it to USD 57 million, including the extra USD 15 million added by the Louisiana Purchase. United States nominal GDP has been estimated at approximately USD 520 million in 1800 (see Susan B. Carter, Scott S. Gartner, Michael R. Haines, Alan L. Olmstead, Richard Sutch, and Gavin Wright (eds. ), Historical Statistics of the United States, Volume Three: Economic Structure and Performance. Cambridge University Press, New York NY, 2006). Hence, almost doubling the size of the United States through the purchase of the Louisiana territory from Napoleon in 1803 cost approximately 3% of the GDP of the existing territory. 21  Balinky, op.cit., for example, comes out strongly against Gallatin’s debt reduction strategy, arguing that it was a narrow-minded and short-sighted fiscal policy for a country in need of economic development. 22  More precisely, the United States debt-to-GDP ratio was reduced by an estimated 56 percent between 1801 and 1808. This estimate is based on nominal GDP estimates for the US in the early 1800s provided in Carter et.

With the world economy now beginning to catch a cold from the slowdown in the US economy, the quality and competitiveness of our exports means that our companies are better equipped than others to hold their own in the global marketplace. Foreign trade not only represents Switzerland's growth driver, but it is also our friend when economic times are hard. BIS Review 45/2008  1
In the US, for example, public debt increased by $ trillion from the end of 2008, with the ratio of public debt to GDP rising from about 74% to the current 100%. Another striking example was Japan where the public-debt-toGDP ratio surged from an already precarious level of around 190% in 2008 to almost 240% in 2012, and is expected to rise even further to over 250% by 2020 along with still more fiscal stimulus under “Abenomics”. In terms of private-sector debt, while the US and the UK underwent more significant private-sector deleveraging, most European countries showed little progress on the reduction in private-sector indebtedness. The weak peripheral countries aside, even in core countries like France, the private non-financial sector debt ratio increased sharply from about 200% of GDP at the end of 2008 to 230% of late. 7. There are many narratives on why this trend of rising indebtedness has occurred. Perhaps the financial “deepening” had made credit much easier and cheaper for many households and corporates to obtain. Or, financial innovation in the form of securitisation and financial derivatives, such as CDS and CDOs, enabled leverage to be amplified and distributed throughout the financial system and beyond. But, the cause of this alarming trend is not the issue. The point I wish to make is that most people had become insensitive to the excessive levels of indebtedness and leveraging, and the resulting imbalances and vulnerabilities that had built up prior to the Global Financial Crisis and the European Sovereign Debt Crisis.

Those discussions have included both the development of a global liquidity contingency plan and a plan to reduce the risk profile of or “derisk” the financial firm by winding down or selling business operations or financial assets. The intention is to have recovery plans, as well as resolution plans, in place by the end of 2011. Recovery planning has several important benefits. The first is to bring about a discussion of the firm’s response to very severe stress scenarios. In addition, the principal supervisors of the firm are present together with the firm to discuss the plan as it evolves, contributing to a common base of understanding of the firm among the supervisors. The second benefit is the identification of impediments to the firm’s recovery. In our discussions with U.S. institutions, four important impediments have surfaced and the same themes, all familiar concerns for supervisors and resolution authorities, have surfaced in other discussions led by members of the Cross Border Crisis Management Group. The difference this time is that the issues are being raised by the firms themselves. The first is the availability of sufficient financial information by legal entity. It begins with simple housekeeping – records that accurately record the legal entities of both the firm and the customer involved in a financial transaction, an asset holding or a liability.