samchain/econo-pairs-v1 huggingface dataset:
However, the rise in salaries for white-collar workers may also reflect weak cost control in enterprises and organisations following a long period of expansion. A precondition for interplay that functions well is that monetary policy is known and remains firm. The best thing Norges Bank can do to contribute to good interplay between the various components of economic policy and wage formation is therefore to be transparent about its analyses and assessments of economic developments. 3  Various game situations between fiscal and monetary policy are described in the literature. Some of these games are discussed in Kai Leitemo (2000): “Samspillet mellom penge- og finanspolitikken under et underliggende inflasjonsmål for en liten åpen økonomi” (The interplay between fiscal and monetary policy under an underlying inflation target for a small, open economy) in Norsk Økonomisk Tidsskrift No. 2/2000, and in Erling Steigum (2000): “Samspillet mellom penge- og finanspolitikken ved et inflasjonsmål” (The interplay between fiscal and monetary policy with an inflation target) in the book Perspektiver på pengepolitikken (Perspectives on monetary policy), edited by Jan F. Qvigstad and Øistein Røisland. 4  This is the game theory known as the Cournot-Nash equilibrium. 5  Cf. descriptions in the Stackelberg equilibrium game theory.

Norway’s export revenues and government revenues can be expected to be very high as long as production remains high, and as long as the global market allows producing countries to extract substantial economic rent. At the same time, we know from experience that revenues may vary sharply from year to year. As a result of the high level of earnings and fluctuations in these revenues, the most important contribution fiscal policy can make to stabilising the Norwegian economy is to provide a sound, long-term plan for the use of petroleum revenues. Attempts to use the central government budget to fine-tune economic activity may, at worst, have a destabilising effect if these attempts are perceived as being a departure from the long-term plan for the phasing in of petroleum revenues. It is necessary to show that fiscal policy can be applied symmetrically in periods of economic expansion and contraction. A year and a half ago, the Government and the Storting adopted new guidelines for economic policy, which call for an annual use of petroleum revenues equivalent to the expected real return on the Government Petroleum Fund. At the same time, the Government issued a new operational mandate for monetary policy. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. Monetary Policy Regulation (1) • Monetary policy shall be aimed at stability in the Norwegian krone's national and international value, contributing to stable expectations concerning exchange rate developments.
The reserve requirement resulted in a wide-ranging effect on the market and the economy. In light of this, once the appreciation momentum was broken, we have been carefully modifying the coverage of the measure to allow greater flexibility for business operations. We have done this without compromising the needs to contain excessive volatility. That is, we have provided the option to fully hedge for loans and debt instruments. At the same time, we expect ongoing relaxations on capital outflow to bring about a better balance between inflows and outflows. The unwinding of global imbalances will remain with us for the foreseeable future. During the transition, monetary policy can and must play a vital role in supporting the economy in its adjustment. And should the balance of risk shifts from inflation to growth, monetary policy will continue to focus on stability while supporting long-term economic expansion. Ladies and Gentlemen, The second challenge comes in the form of high and variable oil prices. As the global economy grows, so does its thirst for energy. An importer of oil, Thailand continues to be vulnerable to a sharp oil price shock that could abruptly exacerbate our current account. More importantly, as one of the most oil-intensive economies in Asia, the high price of oil can create a substantial price pressure and the risk of persistent inflation. The continued expansion of China and India suggests that oil prices may rise yet again in tandem with the global economic cycle.

The Financial Sector Master Plan (FSMP) will move into its second phase, with an emphasis on increased competition and consideration on potential entry of new players to further enhance financial efficiency and resiliency. Our accession to the Basel II accord, an international framework for the risk management of banks, will further raise financial sector stability. Monetary policy, a key responsibility of the Bank of Thailand, will continue to ensure low inflation environment crucial to well-functioning market economy. But there are limits to monetary policy in raising the standard of living over time. As such, a stable macroeconomic environment, no matter how crucial, is not enough to ensure long-run prosperity in the face of globalization. For that, we must turn to the private sector. The private sector must also work continuously to improve its competitiveness by strengthening productivity. A sustained rise in wages and living standards cannot take place without productivity growth. And adaptability to the shifting winds of global competition cannot happen without the ability to adopt the best technology and the ability to use that technology efficiently. To this end, the best competition policy for Thailand is policy to encourage competition. Encouraging competition means open markets. Open markets give firms the wherewithal and the incentive to invest, innovate and learn to be the best. The pacing and sequencing of market reform will also be crucial to its success. While the goal is to have sustained productivity increase, we may not see the effects of these reforms right away.
And when data requirements are too large, the paper shows that simple but wrong (biased) models can outperform correct (unbiased) but complex models, precisely due to the large statistical variability (Charts 3, 4). The second reason is behavioural. Financial participants adapt their behaviours to the policy environment they face by finding ways to take on the same risk but using up less required capital – so-called “regulatory arbitrage”. 11, 12  A balance therefore needs to be struck between the need to allow for more risk-sensitive and complex measures to discourage risk shifting and the need to best trade off model bias and model variance, while being less vulnerable to arbitrage. 11  A well-known example of such behaviour is the use of securitisation and innovative forms of credit enhancement under the Basel I risk weights (see Jackson, P (1999), ‘Capital requirements and bank behaviour: the impact of the Basel Accord’, Basel Committee on Banking Supervision Working Paper No.1, https://www.bis.org/publ/bcbs_wp1.pdf). 12 Such behaviour is, of course, not limited to the financial system, or in fact to humans: even dolphins have been observed ‘gaming the rules’ (https://www.theguardian.com/science/2003/jul/03/research.science)! 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  This is precisely what the final elements of the Basel III package seek to achieve. The package reaffirms the role of internal models as a primary means of guarding against risk shifting.

In time to come, I hope that it will be further fine-tuned so as to reflect the five qualities that I have just spoken about. In this process, it might be useful to modellers in Singapore and even from the region to meet more regularly to exchange ideas and learn from each other’s experiences. In the post-Asian crisis era, one of the main concerns of regional policymakers is that of monitoring vulnerabilities of the domestic economies to external shocks. There is a need for a formal and reliable monitoring mechanism to help supplement overall surveillance efforts. Perhaps macro models could be employed to this end. If workable, this might just be the function that renders models not only relevant but actually indispensable to policymakers. I leave you with this thought and wish you all a day of fruitful deliberations. 4  “Empirical Modelling in Economics: Specification and Evaluation”, The 1998 Marshall Lectures. 3  BIS Review 9/2000
Moderate price and wage inflation is also a necessary condition for a stable exchange rate over time.” A prerequisite for the conduct of monetary policy is that fiscal policy generally contributes to stable economic developments. Fiscal policy influences the total level of domestic activity, and thereby the rise in the prices and costs of goods and services produced in Norway. In a situation with a high level of economic activity, an expansionary fiscal policy will tend to push up price and wage inflation. This in turn will influence expectations in the foreign exchange market concerning future movements in the exchange rate, fuelling depreciation pressures and therefore impeding the implementation of monetary policy. A fiscal policy adapted to the economic situation, on the other hand, will contribute to facilitating the implementation of monetary policy. In the current economic situation, the pressure in the economy should be dampened. The tightening in the National Budget for 1999 of 3/4 per cent of GDP will help to curb price and wage inflation and alleviate the pressure on monetary policy. 10) Conclusion We are thus facing a period of slower growth. Given the pressure that has built up in the economy, particularly in the labour market, such a correction is inevitable as a result of production constraints. However, the prospects are much brighter than after the fall in oil prices and the wage settlement in 1986. The Norwegian economy – including both households and the business sector – is now in a stronger position to cope with a cyclical turnaround.

3) Wider inflation differential against trading partners The Asian crisis has resulted in reduced international consumer price inflation. General pressures in the economy have had only a marginal impact on price inflation in Norway. Consumer price inflation hovered around 2.5 per cent throughout 1998, which was well below the level anticipated by most observers. The fall in import prices has been the main factor restraining the rise in prices. The Asian crisis has probably had a dampening impact on international price inflation. The direct effect of the crisis has been a fall in the prices of goods produced in Asian countries and the indirect effect has been a slowdown in global demand and intensified price competition across countries. As a result, commodity and producer prices have also fallen. The widening of the inflation differential projected by Norges Bank has occurred as result of reduced inflation in other countries. Wide sectoral differences in price developments Although inflation has remained stable in Norway, there are wide differences in price developments among various sectors. Services prices have shown the sharpest rise, moving up by BIS Review 10/1999  –4–  as much as 7 per cent in 1998. The main explanatory factor is that the high level of wage growth has a greater impact on this sector as labour costs account for a substantial share of total costs. The rise in the consumer price index is being restrained by subdued or zero import price inflation.
If we focus too narrowly on the exchange rate when setting the interest rate, we are liable to end up in a game situation. Speculators have little to gain from such game situations if Norges Bank adopts a gradualist approach and avoids abrupt changes in interest rates. In practice, the interest rate is therefore the only monetary policy instrument available in Norwegian monetary policy. The interest rate can influence the exchange rate directly through the differential between domestic and foreign interest rates, and indirectly through inflation expectations. Higher interest rates normally make it more attractive to hold NOK-denominated assets. An increase in the interest rate will result in an appreciation of the krone, and a lower interest rate will weaken the krone. However, this relationship presupposes that the market is confident that monetary policy provides the economy with a nominal anchor. In some situations, interest rate changes may have the opposite effect. A higher interest rate can weaken the krone if it contributes to a deflationary recession, and a lower interest rate can strengthen the krone if it contributes to preventing a deflationary recession. The interest rate only has a predictable effect on the krone exchange rate when it affects price inflation in the right direction. The interest rate functions in different ways in our two economies.

So far, however, estimates of the term premium have remained compressed, suggesting that the recent rise in ten-year US Treasury yields reflects, by and large, a reappraisal of the future expected path of short-term interest rates. [16] The literature points to three potential explanations as to why the impact of QT might be more muted. One is that QT is missing the signalling component of QE. [17] That is, while balance sheet expansions signal a lower-for-longer interest rate policy, balance sheet reductions may provide little, if any, information about the future path of short-term interest rates. The second reason is that the unwinding of QE is typically more gradual than the build-up in assets. [18] The third explanation is that QT often happens in an environment of improved market functioning. Indeed, one reason why QE was so effective at the outbreak of the pandemic is that it quickly improved liquidity and reduced volatility. [19] However, isolating the effect of QT is inherently difficult. Many different forces drive long-term yields. For example, purchases by non-resident investors of US Treasury securities accelerated sharply last year, likely reflecting growing interest rate differentials and the rise in uncertainty on the back of Russia’s unjustified war against Ukraine and its people (Slide 9). Foreign investors alone absorbed nearly 60% of the net supply of US Treasuries in 2022. Increased foreign demand may have offset, at least in part, the impact of the higher actual and expected bond supply from QT.
In spite of the market’s grave concerns about the debt situation in many smaller European countries, and in spite of rising CDS spreads on those same countries and the tendency towards contagion and a herd mentality in the market, Iceland’s CDS spread has declined and is now considerably below those in the European countries whose debt problems have received the most press coverage. But output growth is slow in coming, and in that regard, Iceland is far behind most other countries whose GDP began to grow late last year. At the moment it is quite difficult to interpret the signs, which are quite changeable in the current post-crisis turbulence. For example, quarterly GDP figures and various other statistics are quite volatile, changing from one revision to the next – a problem that is global in scope at present. As a result, the Central Bank was sceptical when figures from Statistics Iceland indicated that GDP had begun to grow in the fourth quarter of 2009. The most recent numbers, which indicate a contraction, are more accurate, although I would not be surprised if the contraction proved somewhat smaller in the final figures. Most indicators suggest that we have hit bottom and that GDP will begin to grow in the latter half of this year, but I do not expect that growth to be strong. In order for GDP growth to gain any real momentum, investment must rise from its current historical low.

2 The net job creation figure of 6,900 includes FinTech jobs in the overall economy, but excludes jobs in holding  companies. The employment increase of 7,600 for the financial and insurance sector in 2018, published by MOM, includes holding companies. 11 / 11  BIS central bankers' speeches
The second trade-off is the approach to simplification. There are two broad approaches we can follow: the first is what we have called a ‘streamlined’ approach, while the second is what we have called a ‘focused’ approach – you can tell from this that the PRA is not a marketing agency. You can think of the ‘streamlined’ approach as retaining most of the chapters of our Rulebook, but simplifying the text within them. On the other hand, you can think of the ‘focused’ approach as completely removing whole chapters from our Rulebook. For example, under a streamlined approach we could perhaps simplify our Pillar 2 capital requirements, whereas under a focused approach we might get rid of them altogether. How far we go in either direction will partly depend on how broad the scope of the framework is. This then brings me to what I think is the third key trade-off: the strength of the framework. The more focused an approach we take – that is, the more requirements we completely remove – the more likely it is that the calibration of the remaining requirements may need to be increased to ensure that the overall framework remains strong. This indeed is the approach that has been taken by several other jurisdictions, such as the US and Switzerland. By how much calibrations might need to adjust would in turn depend on what requirements had been removed, what if any requirements had replaced them, and what requirements had remained in place.

In 2006, the real GDP (at current prices) grew by 12.4 percent and by 4.2 percent (at constant prices). It is expected that strong growth rates will be maintained in the medium term. This will contribute to increasing the production capacity of the national economy and have a positive impact on all its sectors. International credit rating agencies have raised the credit rating of the Kingdom to advanced grades, and commended the efficiency and soundness of the national economy and the economic reform programs. This climate has made domestic and international investors more interested to participate in and benefit from the various investment opportunities in the Saudi economy. The banking system in the Kingdom has exercised a vital role in boosting the national economy. It has made great progress, using the latest technologies and various banking products, under a supervisory system keen to meet domestic requirements and legislation as well as international standards. The contribution of the banking sector to housing finance is expected to increase as soon as the real estate mortgage law is enacted. It is worth mentioning that the size of real estate finance provided by commercial banks reached Rls 13.4 billion at the end of the second quarter  BIS Review 14/2007  1  of 2006. SAMA has permitted a number of banks to offer products for real estate financing. Banks are constantly working to develop innovative products to meet the needs of the housing market.
1 / Why: incorporating digital innovations is an imperative I shall sum up some very strong trends as a “triangle of risks”:  First, on retail payments, over the last 18 months, cash has accelerated its decline while the share of dematerialised payments has increased twice as fast as before the crisis, from 51 % in 2019 to 70 % in the first half of 2021. There is also a strong shift towards the tokenisation of financial assets. This dual trend could lead to the marginalisation of the use of central bank money, be it in the form of banknotes or in settlement systems. We, as a central bank shall never abandon cash; but this commitment cannot be our sole response to technological change. Second, the emergence of BigTechs and new settlement assets  (crypto-assets  and  stablecoins)  could threaten  our  monetary  sovereignty and our mandate to safeguard financial stability. Third and final factor, the progress made by extra-European CBDCs and notably by the digital  yuan, already accessible in the major Chinese cities. The risk is clearly that Europe will lose momentum not just in its drive to strengthen the international role of the euro, but even in preserving it. The challenge here is also a geopolitical concern. 2/ How: reasserting the anchoring role of central bank money thanks to a holistic approach Faced with these challenges, we want to be proactive and move forward in partnership with commercial banks.

2021 PARIS EUROPLACE – STUDIO GABRIEL, PARIS ROADS FOR THE FUTURE: CENTRAL BANK DIGITAL CURRENCY (CBDC) AND INNOVATIVE PAYMENTS  Closing address by François Villeroy de Galhau, Governor of the Banque de France  Ladies and Gentlemen, It is a pleasure to be with you today streamed live from Studio Gabriel. I would like to extend my warmest thanks to Paris Europlace for having maintained through the crisis this fruitful dialogue with all stakeholders. Before turning to my main point today, I want to stress the resilience of our French financial institutions, which have played a decisive role in helping our economy weather the crisis. It was popular a year ago to predict a financial apocalypse, and certain Europeans, prone to self-flagellation, are still doing so today, whereas the Americans are more self-confident. The reality speaks for itself: French banks’ CET1 was higher at the end of the first quarter of 2021 (15%) than it was before the crisis; their profitability, however still insufficient, has improved sharply in this Q1; in general, French banks are in no way underprovisioned. France and Europe are not facing a “tsunami of bankruptcies”, and should, on the contrary, see a strong recovery: cumulative growth of more than 10% over 2021 and 2022. So we need to remain vigilant, but let’s stop scaring ourselves. This roughly reassuring situation is in no way a call for complacency and status quo. The Covid-19 crisis is acting as an accelerator for the major structural challenges banks and insurers are facing.