samchain/econo-pairs-v1 huggingface dataset:
A similar situation has not been seen since World War I when earnings in the shipping industry and other export  1  See also the analysis in Norges Bank Watch 2007. BIS Review 47/2007  5  industries were exceptionally high for a period. Norway’s disposable income increased in real terms by 30 per cent from 2003 to 2006. Second, an ample supply of labour has boosted output growth. In particular, the supply of foreign labour has increased sharply after EU enlargement in 2004. Over the past two years, these labour inflows have accounted for over 30 per cent of growth in the labour force in Norway. At the same time, this has enabled Norwegian companies to be bolder in accepting new assignments and investing knowing that they can procure labour throughout Europe. In addition to increased labour inflows from Poland, Lithuania and other central European countries, we have long benefited from inflows of labour from Sweden. Many workers are on temporary assignment and their consumption is primarily concentrated in their home country. The Norwegian economy has seen a net capacity increase. Third, the Norwegian business sector has been quick to integrate new technology. This applies both to companies competing on international markets and those supplying goods and services to the domestic market. In comparison with other countries, it is particularly productivity gains in banks and other service sectors that stand out. Examples are automated processes and swifter payments in the financial industry and improved inventory and management systems in commerce and transport.

A further reason for tackling the problem at its roots is that the inefficient use of resources in the public sector can have serious long-term repercussions. At best, these include a growth rate below the economy’s potential because the private sector is deprived of resources it could use more profitability; and, because of the persistence of the deficit, the loss of fiscal policy as a counter-cyclical stabilisation mechanism. At worst, the inefficient use of resources can threaten the viability of the economy itself. Many a financial crisis has been sparked off by the behaviour of profligate and inefficient governments. In today’s globalized financial markets, the retribution for such excesses is quick and unforgiving. Implications for fiscal management It would appear that, like all human endeavours, the benevolent, interventionist role of governments was developed with the best of intentions but, as often happens, something went wrong along the way. Judging by the present state of its public finances, Malta is no exception. For a start, fiscal deficits have become a permanent feature of the economic landscape, which suggests that they do not reflect temporary slippages or cyclical downturns, but rather fundamental policy choices and inefficiencies. Since 1990 the annual shortfall between revenue and expenditure has averaged 6% of GDP, or Lm1 out of every Lm16 earned by the economy.1 There were periods when the deficit tended to fall, but these were not sustained.
Sur notre stratégie de finances publiques, la photographie de départ est une dette publique atteignant 115,7 % du PIB fin 2020, deux fois plus qu’il y a vingt ans :  Page 6 sur 14  À politique inchangée, avec une croissance potentielle de 1,1% et un taux de croissance des dépenses publiques en volume de 1,1 % qui est la tendance des 10 dernières années, nous ne ferons que maintenir ce haut niveau de dette publique sur les 10 prochaines années ; ce serait une stratégie dangereuse pour la France face au risque d’un choc de taux d’intérêt ou à celui d’une nouvelle crise conjoncturelle exogène. Mais nous pouvons écrire un film plus heureux pour échapper à ce scénario tendanciel. Il combine trois ingrédients : le temps – ne commencer à se désendetter qu’une fois sortis économiquement de la crise Covid, après 2022, et se donner une stratégie sur dix ans – ; la croissance – qui apportera des recettes mais pas de miracles – ; et enfin une meilleure maîtrise et efficacité de nos dépenses publiques. Une croissance nulle – une stabilisation, donc – des dépenses totales en volume à fiscalité constante ferait baisser la dette à environ 100 % du PIB en 2032. Une croissance des dépenses en volume ramenée à 0,5 % par an diminuerait la dette à environ 110 % du PIB.

Thomas Jordan: No end to the debt society without a culture of stability Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, held at an “NZZ Podium” event, Zurich, 28 February 2012. *  *  *  The complete speech can be found in German on the Swiss National Bank’s website. The most recent financial and economic crisis has resulted in an unprecedented rise in public debt. However, a chronic tendency towards deficits and higher indebtedness has already been observed in a number of countries for the past few decades. Excessive public debt has a negative impact on long-term economic growth, and deprives a country of its freedom of action during a crisis. Sound state finances are thus essential for ensuring an economy's competitiveness and maintaining its social security system, and hence also for social solidarity. Last but not least, excessive public debt also poses a serious threat to price stability and monetary policy independence. Yet how can state budgets be consolidated over the long term? There are limitations on how far fiscal policy powers can be delegated to independent groups of experts. Because fundamental decisions on taxation or expenditure – unlike monetary policy – are aimed at redistribution, they have to be taken at the political level. Even fiscal rules such as a deficit cap or debt ceiling can only achieve a lasting improvement of budgetary discipline if they are supported by a broad political consensus on the advantages of sound finances.
In a so-called counterfactual analysis that has played a central role in the criticism, the actual policy conducted is compared with the alternative of not raising the repo rate at all, but leaving it unchanged at 0.25 per cent since the crisis.3 The latter is assumed to represent a policy that does not lean against the wind. The Riksbank and other economic analysts made similar forecasts So what support do I have for my view that concern over household debt has only had a limited influence on the repo-rate decisions? To begin with, one can look at the Riksbank’s motives as stated in the press releases following the monetary policy meetings. If one does this, it is pretty clear that the focus has been on economic activity and inflation in the coming years. Certainly, it is often mentioned at the same time that the policy conducted is expected to contribute to less risk of imbalances building up with regard to indebtedness and housing prices, but more as a side-effect and not as a main reason. The overall impression is that the policy would have been marginally different if this risk had not been addressed – not that it would have been completely different. One can also look at the discussions that were conducted within the Riksbank. It is a wellknown fact that there were differing opinions within the Riksbank, but how different were they? The situation in July 2011 is an example.

It is a natural part of the economic debate that the Riksbank is being criticised, isn’t it? Wouldn’t it then be better to ignore the criticism and look ahead instead? No, I don’t think so. One important reason is that in the wake of the financial crisis there has been a discussion on the activities and tasks of central banks, what central banks should do and how they should do it. It is, of course, important that our debate on this here in Sweden is anchored in reality and based on how monetary policy has actually been conducted and what it has actually achieved. But meeting the criticism is important not just for the discussion here in Sweden. The debate on Swedish monetary policy also has an international interest and has been followed abroad, not least by other central banks.1 The reason is that a central issue in the international discussion has been to what extent central banks’ policy rates should be used as a complement to macroprudential policy, to counteract the build-up of financial imbalances, for instance, by trying to prevent lending and housing prices from rising too quickly.2 This is what is often called a policy of “leaning against the wind”, and I will hereafter use this expression for the sake of simplicity. Monetary policy in Sweden has in this context been regarded as particularly interesting, as the Riksbank is one of few central banks that, at least this far, has been explicit about taking such considerations into account in its policy-rate decisions.
A gradual normalisation of the interest rate level and a larger supply of new dwellings are expected to curb the rise in resale home prices in the years ahead. The question of whether financial stability considerations should be explicitly included in monetary policy is a subject of widespread debate, both in academia and within central banks. The answers diverge and international consensus has not yet been reached. A flexible inflation targeting regime provides scope for taking into account the impact of potential financial imbalances on future inflation and output. Asset prices and household credit and debt are inputs for the analysis of future developments in inflation and the output gap. In this way, the assessment of asset prices and debt levels may influence interest rate policy. Furthermore, it is important to keep in mind that the unwinding of financial imbalances may lie many years ahead, well beyond the horizon for the inflation target. It is questionable whether monetary policy today should respond to potential repercussions of possible financial imbalances well beyond the monetary policy horizon. First, it is well documented that asset price bubbles and financial imbalances are very difficult to identify ex ante. Second, the appropriate timing of a proactive monetary response is likely to be difficult to determine, given the lags in the impact of monetary policy.

Third, even in the case where the central bank knew that financial imbalances were building up, the size of the interest rate rise needed to reduce the imbalances might be so large that it could lead to a severe economic downturn. In Norway, the central bank is one of the institutions with responsibility for analysing and monitoring the financial system. As a flexible inflation-targeting country, we have chosen to incorporate financial stability considerations into the monetary policy decision-making process, partly because asset prices and debt are important for inflation and output, and partly because it provides focus on potential risks to financial stability. It may also be useful to cross-check by assessing our interest rate policy in the light of simple rules like the Taylor rule, which are less dependent on a specific analytical framework for the Norwegian economy. On the other hand, the rules will not capture all details in the projections, but can provide an indication of whether the current interest rate level is reasonably adapted to the economic situation. As we now publish our own interest rate forecast, market interest rate expectations are one cross check of particular interest. If expectations deviate from our projection, it may indicate that the market has a different view of future economic developments. If we are to influence interest rates in the money market, we must be able to explain such deviations. Of course, it might also be the case that the market’s view is the most accurate.
On bank capital adequacy, some countries (such as the UK and Switzerland) have indicated that the standards they apply will be tighter than the minimum set out in Basel III. This represents a cross-border challenge to regulators because banks from relatively lightlyregulated countries will have a competitive advantage. It was this sort of problem that led to a “race to the bottom” in regulatory standards in the pre-crisis years, and we must strive to avoid this happening again. Regulatory arbitrage is a serious threat. For financial institutions, which are systemically important to the world economy (and that therefore are practically “too big to fail”), there needs to be additional rules. The FSB will report to the G20 Summit in November on which banks and insurance companies qualify, and what additional capital requirements they need to have. Some banks are resisting this strongly. They argue that tighter regulations will drive financial transactions into the world of “shadow banking” where the activities will be regulated lightly. In my view, international banks need to accept tighter regulation, which will mean lower returns on capital in good years due to lower leverage. In return, this approach should help them avoid the frequent  BIS central bankers’ speeches  3  crises and losses of bank capital which have been seen in the last two decades or so. Hence, in the long-term, bank shareholders should be no worse off as a result.

05.05.2022  Opening remarks 112th Meeting of Central Bank Governors of CEMLA Pablo Hernández de Cos Governor  Ladies and gentlemen, good afternoon: It gives me great pleasure to welcome you here today in Seville at the opening of the 112th Meeting of Central Bank Governors of CEMLA. Having been obliged to hold this event virtually in the past two years it is particularly gratifying to be able to meet in person, although we cannot consider the pandemic to be fully over just yet. It is a great honour for the Banco de España to organise this meeting jointly with CEMLA. I should like to take this opportunity to thank Governor Villar, Chair of the Governing Board of CEMLA, and Dr Ramos Francia, Director General of CEMLA, for their invitation to hold this event in Seville. This is the second time, after the 2003 edition, that the meeting will take place here in Seville, which, as the former president of Columbia César Gaviria recalled, Octavio Paz described as the most American of Europe’s cities. At a time when international cooperation is more important than ever, CEMLA stands as a magnificent example of a multilateral institution that fosters such cooperation.
As you may be able to infer from my earlier remarks, I think it is quite possible that the conditions the Committee has established to begin to normalize monetary policy could soon be satisfied. In particular, I will be evaluating the incoming information to see if it confirms my expectation that growth will be sufficient to further tighten the U.S. labor market. After lift-off commences, I expect that the pace of tightening will be quite gradual. In part, that is because monetary policy is not as stimulative as the low level of the federal funds rate might suggest. There is strong evidence that the short-term neutral real interest rate – let’s call that r* – is currently quite low, certainly below the level that historically has applied on a longer-term basis. 1 A wide range of models suggest that the short-run real r* is currently around 0 percent, far below its historical longer-run level that is estimated to be about 2 percent. 2 This benchmark “neutral” rate needs to be compared to the actual real federal funds rate. If we measure the latter by subtracting the core PCE inflation rate from the nominal federal funds rate, the actual real federal funds rate is slightly below –1 percent. Thus, current short-term real interest rates are not far below their neutral counterparts, suggesting that the current monetary policy stance is not exceptionally stimulative. The notion that r* is currently very low is also evident by more casual empiricism.

Financial conditions include the level of the stock prices, the level of short- and long-term interest rates, the size of credit spreads, the foreign exchange value of the dollar and factors that weigh on the availability of credit. If the linkage between financial conditions and the short-term interest rate controlled by the Federal Reserve were stable and predictable, then there would be no need to also monitor financial conditions. But the linkage is not stable and predictable. Sometimes financial conditions loosen or tighten in response to economic developments independent of our monetary policy decisions. At other times, the response of financial conditions can be much larger or smaller than anticipated for a given change in interest rates. Several examples will help me make these points. During 2004 to 2007, the FOMC raised the federal funds rate target 17 meetings in a row, lifting the federal funds to 5.25 percent from 1.0 percent. Yet, during this period, financial conditions eased, as evidenced by the fact that the stock market rose, bond yields fell and credit availability – especially to housing – eased substantially. In hindsight, perhaps monetary policy should have been tightened more aggressively. In contrast, during the Fall of 2008, financial conditions tightened substantially even as the FOMC was cutting short-term rates. Again, in hindsight, perhaps monetary policy should have been eased more aggressively. How financial conditions evolve and how markets respond to our actions are important in influencing the economic outlook, and we need to take that into consideration in our monetary policy decision-making.
Our experience with regard to the effects arising from EU banking groups’ activity in response to EBA’s requirements has provided a useful lesson for the future. In meetings on the Vienna Initiative II, we have many a times iterated that macroprudential policies undertaken in the euro area must take into account the relevant impact on non-EU host countries where systemically important EU bank subsidiaries operate. The home-host cooperation framework must help achieve better policy harmonization in the future, or, at least, provide for an early exchange of information in order to allow host countries to prepare in response to potential shocks. Furthermore, the functioning of supervisory colleges should provide for an effective exchange of supervisory information, and barriers to successful participation by non-EU host countries must be eliminated through combined efforts. Your institutions’ position on each of these issues is extremely valuable to provide a comprehensive view of the implications of EU authorities’ policies and banking groups’ activity in our region, as well as to assess the implications of the banking reforms currently underway in the EU. More specifically, I think that it would be useful for us to discuss along the following lines: •  What mechanisms may we use to revive credit growth in our economies, and what contribution do you expect by EU authorities and EU banking groups in this regard? •  How can we practically establish a permanent mechanism for coordination with the ECB, in the framework of the Banking Union?

Yet, after more than a year of crisis, credit markets remain very fragile, normal interbank relationships have not been reestablished, and those frictions could destabilize the financing of the corporate sector, thus further threatening economic growth. With our last decision, we have given financial intermediaries full assurance that their liquidity needs will be met, in an environment of total clarity and absolute predictability. We hope that this will contribute to reduce uncertainty and restore confidence between counterparties, which is a prerequisite to a functional money market. This may depend on more than simple liquidity provision. But central bank’s ability – and willingness – to use their capacity are a major source of stability in the financial system, and should be seen as such, both by market participants and the general public. BIS Review 122/2008  1  Second, on monetary policy. We have participated in a concerted action by major Central Banks This is a major, and unprecedented, move to restore confidence, but one, I want to emphasize, fully and absolutely consistent with our mandate. It is obvious to all observers that the overall environment has dramatically changed in the last three weeks. Declining oil and commodity prices, together with stagnant activity have significantly altered the inflation outlook. Based on current conditions, we can expect "instant" inflation rate to come under our definition of price stability somewhere in the middle of 2009.
GDP contracted by nearly 13% from its Q1/2008 peak to its Q1/2010 trough. This caused unemployment to soar — although with a lag, as always — to a post-war high of over 8% in Q4/2010. Inflation had peaked at nearly 19% in January 2009 and had fallen back to about 12% by mid-year. At the same time, the Central Bank’s key policy rate had been lowered from 18% to 9½%. State and local governments were hit hard by the economic contraction and spike in unemployment. In 2009, the public sector deficit was nearly 10% of GDP, excluding one-off items such as the recapitalisaton of the Central Bank. Gross public sector debt peaked in 2011 at 92% of GDP. Iceland’s net external debt position was poor as well, with external debt exceeding external assets by nearly 130% of GDP at the end of 2008, excluding the estates of the failed banks. During the run-up to the financial crisis, Iceland’s international reserves equalled only 12% of GDP. They grew somewhat with the first drawdown of the loan in 1  connection with the economic programme with the IMF, to about 24% of GDP by mid-2009. Nearly all of Iceland’s reserves were financed with foreign credit. So the situation was difficult, but in addition, there was substantial uncertainty about what would happen next. Would we succeed in stopping the depreciation of the króna, which was still ongoing, partly because the capital controls weren’t working as intended?

It is a call grounded in the experience of the past quarter of a century, as embodied in wage equations estimated over that period.6 On that basis, in our forecast the easing of domestic inflationary pressures is achieved without the UK falling into recession. But, by nature, it is also a call surrounded by uncertainty. The structure of the UK labour and product markets may be changing, rendering the experience of the past twenty years less relevant for the outlook of wages over the forecast period. The pandemic has lowered labour force participation rates, while Brexit may have changed the structure of both labour and goods markets, reducing the discipline of competitive pressures on the evolution of domestic margins and costs. The environment created by higher international energy and goods prices may also have implications. To the extent that any implied deterioration in the terms of trade is permanent, there will be a real hit to UK income that must be absorbed by some domestic actor. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  So, in the end, someone will have to bear that cost. The important question for monetary policy is how that happens; in particular, how pragmatic and realistic UK firms and households are in accepting the macroeconomic implications of the higher imported energy and goods prices.