samchain/econo-pairs-v1 huggingface dataset:
More conservative fiscal policy would have done what monetary policy could not accomplish; namely, to cool down the overheated economy. Ladies and Gentlemen, These lessons have been expensive ones. Thailand, as a nation, has spent the last five years dealing with the problem with some severe hardship and grave consequences. Although it is probably safe to say that the height of the problems is now behind us, we still face an enormous uphill battle. A new set of challenges seems to emerge everyday, some with very important repercussions on the Thai economy. Here, what spring to my mind are the delay in the global economic recovery and China’s WTO entry already mentioned, as well as the current global equity slump. This is just to name a few. To prepare Thailand for these future challenges, we need to get the fundamentals right on all of the four areas that I have just discussed. In brief, we need to raise productivity in the real sector, rebuild our financial infrastructure, instill the value of good governance in both the private and public sectors, and develop a comprehensive macroeconomic strategy. Needless to say, comprehensive real sector reform is at the core of the new paradigm for sustainable growth. And this requires a carefully planned national agenda. In essence, Thailand needs to  BIS Review 62/2002  3  distinguish itself quickly in the fast-evolving global competitive landscape.

M. Trichet presents the monetary policy guidelines of the Bank of France for 1997 BANK OF FRANCE, PRESS RELEASE, 17/12/96. 1. The ultimate goal of monetary policy is to ensure price stability, as required by legislation. The objective of the Monetary Policy Council is that the increase in prices, as measured by the consumer price index, should not exceed 2% in 1997, as in the medium term. 2. To meet this ultimate goal, the Banque de France uses two intermediate objectives, one of which is external and the other internal: -  The objective of a stable external value of the currency: as it has been for ten years, the stability of the franc will be maintained against the group of the most credible currencies in the European Exchange Rate Mechanism. -  An intermediate internal growth target for the money supply as assessed by the development of the narrow and broad monetary aggregates: in 1997, the money supply should be able to show a medium-term growth trend of 5%. This figure is consistent with price inflation of no more than 2% and non-inflationary real GDP growth of about 2.5%, which could be exceeded, in view of the potential for growth to catch up in the medium term. The Monetary Policy Council has decided to simultaneously monitor the main narrow and broad money aggregates in order to obtain a concise estimate of all monetary developments. 3. Total domestic debt is an important indicator.
The good news is that governments are now establishing the policy frameworks, and the private sector is beginning to allocate capital accordingly. Our efforts will help smooth the transition prompted by these actions. With better information and risk management as the foundations, a virtuous circle is being built with better understanding of tomorrow’s risks, better pricing for investors, better decisions by policymakers and a smooth transition to a low carbon economy. Financing the transition to a low carbon economy is a major opportunity for investors and creditors. It implies a sweeping technological revolution, including investments in long-term infrastructure at roughly quadruple the current rate. As this event testifies, climate finance and risk management is moving into the mainstream. There has been a transition in thinking. And this is now beginning to be translated into action, and the NGFS will play an important role in this. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9

All these initiatives are key to ensuring our capacity to finance the two “Great transformations”, ecological and digital, that we will all have to pursue in the long run. Both require very significant investments in the coming years and hence a co-financing by the public and the private sectors: it is healthy to encourage convergence of private actors with policy goals set by public authorities on these collective issues. Allow me here to turn to some great economists of the last century to shed some light on these transformations. One of them is Joseph Schumpeter and his creative destruction, and the decisive role of private innovation. But we shouldn’t forget Karl Polanyi and his “Great transformation”, written in Britain and published in 1944. Polanyi warned of the dangers of changing a “Market Economy” into a “Market society”, and hence of purely self-regulated markets forgetting about social and political institutions. We might say that his ideas are the structural side of what Keynes wrote on cyclical policies. To succeed in the face of the challenges of both the modern economy and democratic discontent, we will need to reconcile the ideas of these three great thinkers. Page 6 sur 9 II. 20 years ahead: our two great transformations, ecological and digital 1/ I will start with the digital revolution, where Europe is still lagging behind the United States and China. Compared to the United States, we spend less on R&D, have fewer researchers and have filed fewer patents, particularly in biotechnology and in information and communication technologies.
But there is much to suggest that fiscal policy as early as next year that is, the policy which is being decided this autumn - will be important in this context, at least if the timing that is now being discussed, with full participation in 2005 or 2006, is achieved. Thus, more and more of stabilisation policy's burden is transferred to fiscal policy. But this does not mean that the Riksbank should refrain from using the scope for monetary policy that may exist during the ERM2 period. It is up to the Riksbank to do what is possible to make Sweden's accession to the monetary union smooth and stable. Low and stable inflation in Sweden is one important element here; another is a stable exchange rate. Sweden must fulfil the convergence criteria in both these respects. In practice this means that there may be grounds for continuing to produce inflation forecasts and to publish Inflation Reports in much the same way as at present. We should also do what we can with the interest rate to direct inflation onto our target. But the closer we come to adopting the euro, the smaller will be our repo rate's effect on longer term interest rates. That is because as the entry date approaches, the Swedish yield curve will be increasingly determined by European interest rates. BIS Review 65/2002  5  The fact remains that exchange rate stability is one of the convergence criteria for Sweden's full participation in the monetary union.

At that time the Riksbank was legally responsible for the choice of exchange rate regime and ERM participation was considered simply as a way of preventing the flexible exchange rate regime from becoming a formal obstacle to Sweden's possible full participation in the monetary union. When the Government then judged that there was insufficient public support for Sweden's adoption of the euro, the question of altering the exchange rate regime ceased to be relevant. When the independence of the Riksbank was formalised in 1999, the legislation on exchange rate policy was amended. Today the exchange rate regime is chosen by the Government, while the Riksbank decides on issues of its implementation. So it is the Government that decides if and when the krona is to join ERM2, whereupon the Finance Ministry and the Riksbank discuss the SEK/EUR exchange rate that is compatible with a stable economic development. I want to make it clear that, contrary to the impression one is liable to get from reports in the media, this process is not to be seen as a struggle between the Riksbank and the Finance Ministry. There are extremely good reasons for these two institutions to agree on a joint line of action. Otherwise it is likely to be difficult to argue Sweden's case effectively in the subsequent discussions with our European partners.
17  10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  Already, thanks to the global Taskforce on Climate-related Financial Disclosures, four fifths of companies surveyed in the G20 are now disclosing climate-related financial risks.18 Our stress tests will build on this. Investments in sectors or industries exposed to a transition to carbon neutrality will not be able to be made while ignoring the risks. Factoring these into decision making will help to level the playing field in finance between, on the one hand, established sectors that may look safe bets today but could face existential risks in the near future and, on the other, sectors that may look new and risky but could seize new opportunities as we transition towards a carbon neutral economy. By levelling the playing field between these two investments, we may help to unlock financing for what’s estimated to be a need for £ of investment in sustainable infrastructure in the UK, each year for decades to come.19  Opportunity could arise too from dealing with the risks in open-ended funds because another playing field could be levelled there. It’s probably no accident that funds offering daily redemption and investing in less liquid assets have grown so much faster than the overall non-bank financial system in the past decade. These funds can be perceived to offer investors reasonable returns and access to your money. That looks like a good deal. Except, as we’ve seen, access to your money isn’t guaranteed or free. Liquidity always has a cost.

To so do would bring serious costs to the economy in the bad times without creating much benefit the rest of the time. So while we’re always looking for ways to make regulation as refined and efficient as possible, we are committed to robust standards of resilience in the financial system. Looking ahead, we’ll need a level of resilience in our system in future that’s at least as great as currently planned. 6  See ‘Stress testing the UK banking system: 2018 results’ in the November 2018 Financial Stability Report. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  And reflecting the size and importance of our financial sector relative to our economy, we’ll continue to need a level of resilience that exceeds what’s required by baseline international standards. Agility With the fault lines that caused the crisis largely dealt with, it might have been tempting to declare ‘mission accomplished’. But times change. The financial system changes shape. And new challenges emerge that it may need to one day face. Regulation has to adapt if it is to ensure the new system stays able to serve households and businesses in the face of these challenges. Continued stability needs regulatory agility. That’s why it makes little sense to base regulation of finance on a set of rules that’s difficult to change and evolve. There is no set of rules that will deliver the right outcome for the economy for all time.
Charter schools have provided another source of school choice in education. More research into evaluating the effectiveness of voucher programs and charter schools at raising student achievement would be desirable in terms of informing public policy choices.8 The importance of education is not limited to elementary and secondary levels. In fact, there exists convincing evidence from the child development literature that suggests that educational investments early in childhood have especially large rates of returns in terms of lifetime earnings and other outcomes. Take, for example, the Perry Preschool program for low-income African-American children, a two-year preschool program experiment in the mid1960s. Recent research shows that this program had very large beneficial long-term effects, with participants experiencing higher rates of high school graduation, higher salaries, higher homeownership, more stable family structures, fewer arrests and lower welfare dependence. The large positive economic externalities from these investments in children imply that such programs more than pay for themselves over the long term. Estimates indicate that the aggregate benefits over the life of a child exceeded by eightfold the program’s per-pupil  6  Chakrabarti and Roy (2015). 7  Hoxby (2003), Chakrabarti (2008) and Chakrabarti (2013). 8  Dobbie and Fryer (2011), Dobbie and Fryer (2015), Angrist, et al. (2016).

“School Choice and School Productivity (Or, Could School Choice be the Tide that Lifts all Boats? )”, The Economics of School Choice, University of Chicago Press, Chicago. Jackson, Kenneth T. Crabgrass Frontier: The Suburbanization of the United States. Oxford University Press, 1987. Piketty, Thomas and Emmanuel Saez. 2003. “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics, 118 (1): 1–41. Schmutte, Ian M. 2015. “Job Referral Networks and the Determination of Earnings in Local Labor Markets,” Journal of Labor Economics, 33(1): 1–32. BIS central bankers’ speeches  7
4  BIS Review 29/2009  balance between stabilising inflation and stabilising the real economy. An ex ante evaluation should then aim to assess whether the central bank has succeeded in doing this. Before making such an assessment of the central bank's forecasts it is natural to first examine the general quality of the forecasts. Any assessment of the quality of the forecasts obviously entails an ex post analysis with the help of historical forecast errors. If the assessment is that the forecasts are of a reasonable quality it then becomes a question of assessing the monetary policy deliberations held on the basis of the forecasts the central bank makes. This primarily entails an ex ante analysis. Were the forecasts good enough? The first question we should ask is thus whether the central bank's forecasts are normally good enough. It would of course be going too far to demand that the central bank's forecasts should be perfect. As I have said, the economy is constantly subject to unexpected shocks, which means that the forecasts are always likely to be incorrect to some extent. Analysing the accuracy of a forecast in an individual year thus provides limited information. A significant forecasting error may indicate that the forecast was poor, but it may also be due to the fact that a shock occurred that could not have been predicted. 3 Do the forecasts systematically over- or underestimate the actual outcomes?

Prices for imported goods and services will increase. A weaker currency strengthens the competitive strength of a country’s enterprises and indirectly increases output, employment and inflation. Most inflation-targeting countries base their monetary policy on inflation targeting that is more flexible and use some time to bring inflation back to target, i.e. flexible inflation targeting. Such a policy has a less pronounced effect on demand and output than stricter inflation targeting. We see that real economic developments among the first inflation-targeting countries have become more stable. Growth has also accelerated. For all OECD countries in the first group of inflation-targeting countries, growth has been higher since inflation targeting was introduced than before. With confidence in the inflation target, monetary policy can make a greater contribution to smoothing fluctuations in the economy. Inflation expectations have also fallen and are stable at the target.7 On the whole, we may conclude that the inflation-targeting countries have had low and stable inflation. Growth has increased and become more stable. Nevertheless, we cannot necessarily conclude that inflation targeting alone has been responsible for these favourable results. Other countries have also had favourable economic developments in the last ten to fifteen years. The results must be seen in the light of the fact that all of these countries have conducted a sound monetary policy. Low and stable inflation is an important and often the only monetary policy objective.
The most interesting thing I heard a senior policymaker say about the financial crisis, not a Bank of England policymaker, was that we spent far too long thinking about whether there was a housing bubble and not enough time thinking about what if there is a housing bubble. The consequences for banks will be informed by our annual stress test. With the stress scenario varying systematically with our assessment of the risks, the test will guide us as to how – given banks’ exposures – our judgement about the risks should be reflected in capital buffers. In addition, we’ll have a bias to acting early and gradually – to raising countercyclical capital buffers before the threat level is seen to be heightened. The Bank of England expects to be adding around 1% to the capital buffer on UK exposures of all banks, even before the overall threat of future losses looks high. That bias reflects the time lags in implementation and in the cost of time-varying buffers lagging behind the threats. As well, there is clear evidence that sudden, sharp increases in capital requirements can have a material effect on credit supply and economic activity. Acting earlier allows us to take smaller steps. With this approach, the UK’s systemic banks will, except in post-crisis repair, be required to run with capital buffers a little above our baseline standard. Leverage requirements will also be scaled up, with banks typically being required to fund no less than 4% of total assets with tier 1 capital.

6 Alogoskoufis and Langfield (2018), “Regulating the doom loop”, ESBR Working Paper, No 74. 5/8  One of the best ways of increasing the degree of diversification of banks’ holdings of sovereign debt, without relying on complex regulations with possible unintended effects, is through the creation of a pan-European safe asset. But as I will now argue, the relevance of a euro-denominated safe asset for strengthening our monetary union is not just linked to breaking the doom loop between sovereigns and banks, increasing diversification and strengthening the international role of the euro. It is also of paramount importance for the Capital Markets Union project. EU regulation has done a significant job in harmonising investment and savings products across the European Union. Nevertheless, the completion of the Capital Markets Union is hardly possible without a common benchmark for investors and firms at the euro area level. Under the current framework, even highly diversified multinationals are linked to the sovereign of the host country. For example, the credit default swaps (CDS) of the most important Spanish non-financial multinationals (firms with revenues from all over the world) show a more than 90% correlation with the CDS of the Spanish government. Again, the benchmark for any firm is not a pan-European benchmark (or the Bund), but the national one. A single, risk-free asset would likely become a common benchmark, allowing the prices of equities and bonds across the euro area to reflect fundamental risk more clearly.
For macroeconomic policies, there is an important  3  Claro, Sebastián. Presented at the V Chile-China Entrepreneurial Meeting, Centro Cultural de Carabineros, Santiago, 10 June 2011. For transcript, see Central Bank of Chile website: www.bcentral.cl. 4  See Ministry of Finance of Chile website: www.hacienda.gov.cl. 2  BIS central bankers’ speeches  challenge in facing a period of temporarily high terms of trade, and the improved external financing conditions that become available as a result. The experience of many countries shows that the best policy mix is sound fiscal discipline, prudent financial regulation, and a monetary policy framework that combines price stability and flexible exchange rates. A sound fiscal policy not only smoothes the business cycle and helps minimize foreign exchange fluctuations, but also avoids commitments to spending on outlays that depend on uncertain future income. Fiscal policy in Chile has been moving in that direction for decades, the importance of which cannot be overemphasized. Sound banking supervision is key for several reasons, among others because the intermediation of large capital inflows – in a context of upward pressures on asset prices – may lead to excessive risk taking. The reversal of these conditions has hit particularly hard in previous financial crises, where risktaking by financial institutions prompted aggressive deleveraging, with strong implications for credit and output. For this reason, in circumstances like these it is extremely important to closely monitor the prices of key assets and risk-taking patterns in the financial system. Finally, regarding monetary policy two issues are worth noting.

Their conclusion is clear: “For debt-intolerant countries, sustaining access to capital markets can be problematic unless debt ratios are quickly brought down to safer levels. To assess how such ‘deleveraging’ might be accomplished, we examine how, historically, emerging market economies with substantial external debts have managed to work them down. To our knowledge, this is a phenomenon that has previously received very little, if any, attention. We analyze episodes of large debt reversals, where countries’ external debt fell by more than 25 percentage points of GNP over a three-year period. Of the twenty-two such reversals that we identify for a broad group of middle-income countries since 1970, two-thirds involved some form of default or restructuring. Only in one case – Swaziland in 1985 – was a country  1  Sources: World Bank, Moody’s and IMF (WEO, April 2012). 2  Reinhart, C., M. Savastano and K. Rogoff, (2003), “Debt Intolerance”, Brookings Papers on Economic Activity 1. BIS central bankers’ speeches  1  able to bring down a high ratio of external debt to GNP solely as a result of rapid output growth.” Thus, in the early 2000s, there were widespread expectations that a default would occur. Overall, the history of Latin America in the 2000s did not go as expected. During the first decade of the twenty-first century, Latin American countries succeeded in lowering their levels of external debt by nearly 20 percent of GDP.