samchain/econo-pairs-v1 huggingface dataset:
From this it follows that corporate earnings and consequently share prices should also be more stable. Another factor that may point to less marked cyclical fluctuations in the future is the transition from manufacturing to the production of services, together with the era of information technology. Thus, if the yield from share investment is more stable in the future than it has been in the past, this might warrant some downward adjustment of the expected return and thereby lead to a higher valuation. Another argument is that with more and more people saving in shares for retirement, the investment horizon has been lengthened. This category of share investor is less concerned about short-run fluctuations in share prices and that might justify a somewhat lower expected return. A third argument is that financial market developments have resulted in decreased transaction costs and less liquidity risk. There may be some truth in arguments of this type but it is still difficult to believe that the expected return has fallen as much as would be needed to justify today’s stock market valuations. Or is higher earnings growth foreseen? Let us now look at the importance of earnings growth for share valuations. We noted earlier that to justify a P/E ratio between 30 and 35, given an unchanged expected return, real earnings growth must move up from 2.5% to 4.5%. Is it reasonable to suppose that the future earnings trend will be as high as that?

The return to  BIS Review 137/1999  4  that the trend rate of GDP growth has to move up from around 2% to an annual rate of 5% over a considerable period. Thus, we are talking of a marked upward shift in the growth trend that has not yet occurred in Sweden. Neither has such high growth been mentioned in the United States, except perhaps for a single year. The discussion there does, however, concern the possibility that the trend or potential rate of growth has risen. That would then point to some increase in the growth of corporate earnings in the United States. Why are asset prices relevant for central banks? If asset prices and the growth of credit in an economy are based on unrealistic expectations of future prospects, the result is liable to be a financial bubble. Under normal circumstances, rising asset prices add to the value of collateral and thereby strengthen the borrowing propensity of investors and the lending propensity of banks. An upward trend in asset prices is therefore often accompanied by an expansion of credit. In Sweden, for example, in the five-year period up to the early 1990s, real asset prices had risen more than 70% and private sector debt relative to GDP had grown from 100% to 150% (Fig. 5). Bubbles burst sooner or later, with consequences for the financial system and the economy in general that may be grave. That is one reason for central banks to take an interest in stock market trends.
On the contrary, the different sources of comparative advantage and therefore factor prices across ASEAN, offers a powerful incentive to develop an efficient pan-ASEAN production network. Indeed, this has already happened in manufacturing, especially electronics. It needs to happen across a broader set of economic activities. The economic case for ASEAN integration is strong. It is a matter of political will to make it happen. 23. Progress in integration has been strongest in merchandise trade. The ASEAN-6 countries have eliminated tariffs on 99.7 percent of goods. Cambodia, Laos, Myanmar and Vietnam have committed to reduce tariffs on 98.6 percent of goods to zero to five percent. 24. But as all cross-border businesses know very well, enhancing trade links is not just about reducing tariffs. It is equally, if not more, about reducing non-tariff barriers and streamlining regulations. In May last year, the ASEAN Trade in Goods Agreement (“ATIGA”) came in to effect. The ATIGA not only entrenches tariff reductions, it also lowers the cost of doing business and simplifies trade-related transactions through enhanced trade facilitation measures and customs procedures. 25. Liberalisation of cross-border services in ASEAN has also intensified, albeit slower compared to goods. ASEAN has committed to remove substantially most restrictions on trade in services through eleven packages of commitments under the ASEAN Framework Agreement on Services (“AFAS”). In financial services, members are working to progressively liberalise the insurance, banking and capital markets sectors.

Against this background, the Riksbank has contacted the CPI Enquiry, set up by the Government, to obtain assistance in specifying an indicator of underlying inflation that is likely to be widely accepted and can be published regularly by Statistics Sweden. In the future, such an indicator might be able to have a more direct function in monetary policy, either by replacing the CPI as the target variable or by serving as an operational target or aid in the continuous work of constructing policy. The Riksbank has also asked Statistics Sweden to publish, for the time being, one or more indicators of underlying inflation together with the CPI. Perhaps I should emphasise that in no way do these initiatives alter monetary policy’s fundamental commitment to price stability. The current situation for monetary policy The question of transitory effects leads me on to current monetary policy. Transitory effects are playing a major part in the CPI’s present development. As a result of tax changes, lower interest rates and a lower oil price, since December the Riksbank has had to revise the 1998 CPI prediction downwards by about 1.2 percentage points. In 1999, too, transitory effects mean that CPI inflation will be lower than we envisaged earlier. Thus far, however, the altered picture of inflation need not have any sizeable consequences for monetary policy. It is now too late to influence this year’s path for inflation more than marginally.
4. Conclusion  Above the central arch of this Court Room is a weather vane. Originally installed in 1805, it played a central role in the Bank’s management of a different type of uncertainty – meteorological. When the wind blew from the east, ships would be able to travel up the Thames, meaning London’s merchants would need credit to purchase the cargo. When it blew from the west, credit would need to be withdrawn. This Regency forecasting model helped the Bank of England to provide an anchor of stability. Today, while the economy is more complex and our models less reliable, the Bank has identified the clouds on the horizon and can see that the wind has now changed direction. 12  BIS central bankers’ speeches  Over the past few months, working closely with the Chancellor and with HM Treasury, we put in place contingency plans for the initial market shocks. They are working well. Over the coming weeks, the Bank will consider a host of other measures and policies to promote monetary and financial stability. In short, the Bank of England has a plan to achieve our objectives, and by doing so support growth, jobs and wages during a time of considerable uncertainty. Part of that plan is ruthless truth telling. And one uncomfortable truth is that there are limits to what the Bank of England can do. In particular, monetary policy cannot immediately or fully offset the economic implications of a large, negative shock.

Chart 10  Chart 11  Whole economy real investment substantially weaker than pre-crisis forecasts  Advanced economy investment has fallen relative to GDP, remains lower than past episodes  Residual Non-residential Total  Equipment Residential  Per cent 10  1980  1989  0  2001  2007  pp fall in investment share of GDP 1.0  -10  0.5  -20  0.0 -0.5  -30  -1.0  -40  -1.5  -50  -2.0 -2.5 -3.0  Sweden  Switzerland  Germany  UK  Canada  US  France  Denmark  Italy  Spain  -60  -3.5 -4.0 -4.5 T  T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8  Years  Source: IMF World Economic Outlook and Bank calculations. 8  Source: IMF World Economic Outlook and Bank calculations. BIS central bankers’ speeches  Chart 12  Chart 13  UK business investment still short of pre-crisis share of GDP…  … and tracking below past cycle average Business investment, peak GDP = 100  12  Average of past cycles  11  2008  Nominal 10.5 10 9.5  Per cent of GDP  Real  130  11.5  90 80 70  8.5 2016Q1  2014Q4  2013Q3  2012Q2  2011Q1  2009Q4  2008Q3  2007Q2  2006Q1  2004Q4  2003Q3  2002Q2  2001Q1  Source: ONS and Bank calculations.
The third discussion forum I would like to mention is the reference group for the payment system called together by the Riksbank and consisting of representatives from VPC AB, Bankgirocentralen, Stockholm Stock Exchange, the major banks and the Swedish Bankers’ Association. Part of the work in these working groups has entailed charting the flows and the infrastructure of the payment system. The charting process began as an internal project at the Riksbank, with a general review of the payment system’s basic conditions, agents and services. This has since functioned as a basis for discussion and as reference material for other working groups to make a more in-depth survey of some representative payment services. One example is the flow chart of the Swedish Social Insurance Administration's pension payments that I have spoken of today. Other payments that have been charted are credit transfers and payments for securities. The general conclusion reached by most participants in these discussions is that each organisation has a responsibility for supplying its services in accordance with the agreements it has with its customers. This responsibility includes solving crises internally and cooperating with those the organisation is dependent on to be able to supply their services. The discussions have also increased awareness that everyone in the chain must have a reasonable level of business continuity and crisis recovery planning and that cooperation may be necessary to safeguard common interests. It has not yet been decided how these discussions will continue.

Therefore, there is cause for some optimism concerning the possibility of shielding the mainland economy from the effects of swings in oil prices. In the long run, however, petroleum revenues and their use will affect the level of costs in Norway. An increase in oil prices may generate expectations of higher use of petroleum revenues in the future, particularly if high oil prices are expected to persist. Such expectations may exert appreciation pressures on the krone. It may also generate expectations of higher returns in the Norwegian stock market than in foreign markets, which also can and has contributed to an appreciation of the krone. Our assessment is that developments in oil prices and an increased cash flow have been responsible for the appreciation of the krone since the spring of 2004. We are approaching a peak in petroleum production in Norway and must expect a substantial reduction in the next decades. In addition, there is considerable uncertainty associated with future petroleum production. In recent years, there has been a tendency to overestimate projections for production a couple of years ahead. It is especially demanding to estimate production for the many large fields that have reached maximum capacity. The fiscal rule provides a long-term anchor for fiscal policy. It provides a stable framework that contributes to curbing some of the fluctuations in the Norwegian economy. Nonetheless, the use of petroleum revenues in the Norwegian economy has been increasing over the past few years. Petroleum investment has increased significantly.
Whether for time-sensitive transactions as part of the often intricate choreography of global financial stability operations or for more routine official payments, the insights developed and experiences with the policies, environments, and constraints of other central banks provide the Federal Reserve with enhanced capabilities to formulate and execute policies. The dedication, skill, and expertise of this staff transform on a daily basis the abstract principle of safe, confidential, and reliable service provision into an operational reality. So, to the current and former staff here today, I pay tribute to your service to the global official community, to the Federal Reserve, and to the U.S. You are worthy heirs to the legacy of Benjamin Strong, Montagu Norman, and other early giants of central bank cooperation. The evolving risk environment in cross-border payment operations Even as we hold this commemoration and celebrate the legacy of central bank cooperation in this most tangible of forms, the evolving risk environment in cross-border payment operations requires us as central bankers to continually rededicate ourselves, in word and deed, to the mission of providing safe, confidential, and reliable services to each other. As we are all no doubt aware, risks in cross-border payment operations have undergone major shifts in recent years, with cyber threats in particular emerging as one of the most critical security issues facing our community.

Let me conclude with some imagery from rural America. In the traditionalist Amish communities of Ohio, Pennsylvania, and Indiana known for simple living and for shunning modern technology, whenever there is a need for a new barn to be built, the Amish organize what are called barn raisings. In a barn raising, the community comes together to assist in building their neighbors’ barns, with the understanding that the favor is eventually returned to other members of the community. The barn raising is a showcase of Amish planning, organization, and manual labor and serves as a practical linchpin of the agriculturally-rooted Amish society. However, while the barn raising fulfills a practical need, it also serves to tie the Amish community together by reinforcing Amish society through a very visible expression of the principle of mutual aid.17 In this 100th anniversary year of the first dollar account openings for foreign central banks by the Federal Reserve System of the United States, I can think of no more moving metaphor than this for the benefits that flow from central bank cooperation through the reciprocal provision of account services. Let us work together to preserve it. Thank you for listening. 1 I would like to thank Mark Choi for his assistance in the preparation of these remarks and colleagues in the  Federal Reserve System for their insightful comments and suggestions. 2 A cash account that a bank holds with another bank in a foreign currency. 3 The first Federal Reserve Board was sworn in on August 10, 1914.
o  But monetary stimulus and steady pipeline of infrastructure projects will support growth in H2. o  Latest indicators, including services and manufacturing PMIs, suggest economy is stabilising  In ASEAN, o o  pick-up in infrastructure spending should support domestic demand strengthening US economy should provide gradual uplift to exports  4. Second, domestic non-tradable sectors should remain resilient. •  Construction industry will be supported by further capacity expansion in transport infrastructure. BIS central bankers’ speeches  1  •  Demand for services such as education and healthcare expected to stay firm. 5. Third, financial services should continue to pull up overall growth. •  Underpinned by bank intermediation, fund management and risk management activities, reflecting demand from both domestic and regional markets. So, growth was weak in H1 but is not expected to weaken further. 6. On YoY basis, GDP growth came in at 2.3% in H1 2015. 7. MAS and MTI are reviewing growth forecast for 2015, taking into account weaker outturn in H1 as well as support factors in H2. But risks on global macro front have increased. 8. MAS closely monitoring three key risks in external environment. •  First, Greece. Situation remains highly fluid and uncertain. •  •  o  Failure by Greek government to implement measures agreed with international creditors could spark renewed market jitters. o  Could dampen confidence and recovery in wider Euro area, with spillover effects on rest of world. Second, China. Downside risks have increased.

•  Have refined our rules to allow less complex ETFs which make limited use of derivatives to be reclassified as Excluded Investment Products (EIP) – these can be sold more easily to retail investors. 50. 80% of AUM of SGX-listed ETFs are now classified as EIP ETFs that investors can purchase as easily as they buy individual stocks. Third consumer initiative: spur competitive pricing for life insurance products 51. MAS worked with industry and CASE to create a new online portal, compareFIRST. BIS central bankers’ speeches  7  •  Will enable retail consumers to easily compare key features of life insurance products offered by various insurance companies  •  Since its launch in Apr, compareFIRST has registered healthy interest, with over 180,000 visits to portal and more than 110,000 product summaries downloaded. •  Consumers and industry have provided positive feedback on convenience and ease of use of compareFIRST. 52. (DPI). MAS has also worked with industry to make available Direct Purchase Insurance  •  DPI offers consumers access to selected term life and whole life insurance products sold without commissions or financial advice  •  More than 200 DPI policies have been sold in first three months of launch, with a further 100 applications pending approval by insurers. 53. compareFIRST and DPI have spurred more competitive pricing for life insurance products. •  Some insurers have lowered prices of both their DPI and non-DPI insurance products, since introduction of these initiatives. Fourth consumer initiative: enhance financial education 54.
Over the course of the second half of 2009 and throughout the entire 2010, annual GDP growth will resume positive values, closer to trend, in line with the strong monetary and fiscal impulse and with the Chilean economy’s sound fundamentals. Thus, for 2009 at large, annual GDP growth will be within the range between -0.75 and +0.25 percent, while domestic demand will drop 4.7 percent year-on-year. Consistently, the baseline scenario assumes that the current account deficit will amount to 1.8 percent of GDP in the year, lower than predicted in January (Table 2). The labor market is already feeling the deterioration of the macroeconomic environment. Employment, after the usual seasonal adjustment, has shown a decline in the past few months and the rate of unemployment has begun to rise. Taking into account the typical relationship between the output gap and employment, it is likely that the labor market will continue to deteriorate in the months to come, with higher unemployment, despite early signs of recovery in the economy. Still, the implementation of the National Agreement for Employment recently announced by the Government could mitigate part of the rise in unemployment. The increase in output gaps has affected inflationary pressures and perspectives in the large majority of countries. A big number of economies, Chile included, have seen a rapid decline in inflation since the final months of last year. This obeys to a large extent to commodity prices falling, particularly oil and its derivatives.

Caleb M Fundanga: Promoting financial inclusiveness Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, to the second AFRACA Central Banks’ Forum, Livingstone, 23-25 September 2008. * • • • • • • • • • • • • •  *  *  The Guest of honour; Honourable Ng’andu P. Magande, MP Minister of Finance and National Planning; Your Worship the Mayor, Mrs Grace Shafik; Provincial Minister, Hon Daniel Munkombwe; Permanent Secretary, Southern Province, Mr Darius Hakayobe; Deputy Governor-Operations, Dr Denny Kalyalya; Chairperson; The Secretary General of the African Rural and Agricultural Credit Association (AFRACA), Mrs Mary Nandazi; Co-operating partners; Distinguished invited guests from Central Banks; Resource Persons; Chief Executive Officers of Banks and Non bank financial institutions; Distinguished invited guests; Ladies and gentlemen;  On behalf of the Bank of Zambia and indeed on my own behalf, I would like to extend a very warm welcome to you all to this important African Rural and Agricultural Credit Association (AFRACA) Conference. To our colleagues from outside Zambia, I wish to extend a special welcome to you to Zambia, in particular to Livingstone, our tourist capital. Like the rest of Zambia, Livingstone is a city of tranquility with an easy-going African charm. The city is not short of interesting sites and places to visit. It hosts the Victoria Falls, also known among the locals as “Mosi-o-Tunya, the Smoke that Thunders” and is one of the world’s seven natural wonders!
Accordingly, the yield curve plays a dual role for monetary policymakers: on the one hand, as a transmitter of monetary policy; on the other hand, as a source of information about the expectations and risk assessments of investors about the future macroeconomic environment and the future path for monetary policy. Response of the yield curve to monetary policy in normal times Let me first revisit the benchmark case of how the yield curve reacts to the standard policy tool of variations in short-term interest rates. To this end, I will focus on a rate cut, in order to facilitate the comparison with a subsequent discussion of our unconventional monetary easing policies. When measuring the effect of monetary policy on the yield curve, macroeconomists typically focus on monetary policy shocks: that is, surprise changes in the policy rate that occur independently of other structural shocks, such as innovations in aggregate demand or cost-push shocks. Since monetary policy decisions respond to these other shocks, naive calculations of the co-variation between monetary policy  and the yield curve cannot distinguish the contribution of monetary policy from the impact of the underlying structural shocks. Accordingly, the independent role of monetary policy is revealed by focusing on the surprise element in monetary policy decisions, and there is a buoyant literature trying to identify these shocks and measure their impact on the yield curve and the economy.

Turning to the external sector, which remains our main source of growth, the adjustment of relative costs and prices under way in the Spanish economy, and the subsequent improvements in competitiveness, is allowing sales abroad to grow at a higher rate than that of the markets to which we export. Even if there is a rise in imports in the remainder of the year, this will provide for a strong correction of the current account balance, which will run a significant surplus this year of around 2% of GDP. In addition to achieving this improvement in competitiveness, households, firms and financial institutions are deleveraging and the Spanish economy is undertaking major reforms, furthering the fiscal consolidation drive, which must in any case continue through to 2015 but which will evidently prove easier if the recovery firms. BIS central bankers’ speeches  1  Before moving to the second part of my address, and to conclude my comments on developments in activity, I should like to refer to the 2012 results of our Central Balance Sheet Data Office, and its preliminary results for 2013, which have been published this morning. The 2012 figures illustrate the severity of the crisis that year. In 2012, Gross Value Added fell 4.5%, 3 pp more than in 2011, and the Net Profit for the year was practically zero. For 2013, however, the estimate provided by the quarterly information from the Central Balance Sheet Data Office points to a turnaround in activity and in business profits.