samchain/econo-pairs-v1 huggingface dataset:
ASEAN policymakers have also been complementing monetary policy actions with macroprudential measures aimed at managing the inflationary effects of strong inflows of short-term capital. Indonesia has increased the holding period for its short-term debt, while Thailand has imposed a withholding tax on interest and capital gains earned by foreign investors on Thai bonds. Singapore has also implemented a series of macroprudential measures to curb speculative activity and to ensure a stable and sustainable property market. 19. Most ASEAN-5 economies, including Singapore, have also scaled back the expansionary fiscal policies introduced during the crisis. 20. In short, ASEAN policymakers have been proactive in addressing inflationary pressures but will need to remain vigilant because the risks are not over yet. Inflation is expected to peak this year and moderate going into 2012. The ASEAN economies’ hard-won macroeconomic stability will give them the resilience to ride a challenging external environment. Integration: towards a single market 21. Even as they build up their resilience, the ASEAN countries have been working steadily towards greater economic integration. ASEAN has committed to building by 2015 the ASEAN Economic Community (“AEC”), a single market and production base. This will allow goods, services, investments and capital to flow more seamlessly across the ASEAN region. More importantly, it will give ASEAN an economic heft and relevance that corresponds to that of China and India. 22. The different levels of development within ASEAN has been often cited as a reason why integration will not work in ASEAN.

Ravi Menon: Resilience, integration, opportunity – the ASEAN story Opening address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Merrill Lynch Asian Stars Conference 2011, Singapore, 18 May 2011. *  *  *  Mr Brian Brille, Mr Peter MacDonald, Mr Richard McCormack, distinguished speakers, ladies and gentlemen, good morning. Resurgence of Asia 1. According to estimates by the late British economist, Angus Maddison, two thousand years ago, India had the largest GDP in the world. China was close behind. Together, they accounted for more than half of global GDP. Asia ex Japan was 75 per cent of world GDP. And this was at the height of the Roman Empire in Europe, which accounted for just 10 per cent of global output. Over the next 1,800 years, the two Asian giants remained the largest economies in the world, with China pulling ahead of India about 500 years ago. For much of this period, Asia ex Japan was typically about three times larger than Western Europe. 2. Then came the Industrial Revolution in Europe. By the start of the First World War, Europe and America accounted for more than half of global GDP, with the combined share of India and China falling to less than 20 per cent. By 1950, the share of India and China fell to less than 10 per cent. Asia less Japan was only about 15 per cent. 3. Since then, the story has been of Asia’s resurgence.
8  All speeches are available online at www.bankofengland.co.uk/speeches  8  I noted above that changes in the world of work have very possibly changed the pricing power of labour and workers’ appetite for risk (i.e. job insecurity). This is in itself a large area of current debate and I do not want here to go into these in great detail. 18  Some of these important changes in the structure of the labour market, such as the rise in self-employment and decline in union membership, predated the financial crisis. Others, like the rise in temporary work and zero hours contracts, are more recent. Technology – and the rise of the gig economy – has further increased what my colleague Andy Haldane has called the ‘divisibility’ of labour. The impact of the financial crisis and subsequent recession itself may also have changed workers appetite for risk. Anecdotally this is certainly true; I have lost count of the number times in the last four years, when the discussion on regional visits has turned to pressure for pay increases that I have heard the explanation that workers were “happy just having a job”. This may well be more than anecdote. There is literature on the Great Depression that identifies the lifetime effects on the so called ‘depression babies’ and their attitude to risk.

6  There is of course a vast academic literature on these issues which generally goes under the heading of the “Phillips Curve”, the relatively constant, negative and non-linear relationship between wages and unemployment in 100 years of UK data that A.W. Phillips identified in 1958 (Chart 5). 5  7  Broadbent 2014  6  To illustrate this dependence, growth in hours worked has accounted for 80% of growth in output in the UK since 2013, where it accounted for just 27% of growth in the decade prior to the crisis. 7  Phillips found that the data for 1948-1957 fit the same relationship as seen over 1861-1913. There was greater variation in the war and inter-war years. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  That relationship has not remained constant since then – simple lines of best fit suggest that the relationship between the unemployment rate and nominal wage growth has moved lower and flatter over time (Chart 6). Phillips’s work has been extensively revised and adapted over the past 60 years, most importantly by adding some influence of inflation expectations to explain the apparent breakdown of the relationship in the 1970s when unemployment and pay appeared positively correlated. 8  The framework has been extended to prices rather than wages.
Percent 15  15  Actual Holden III  10  10  5  5  0 1970  1980  1990  2000  2010  2020  2030  0 2040  1) Sum of investment, intermediate consumption and labour costs in crude oil and natural gas production. Sources: Ministry of Finance and Statistics Norway  In the course of a few years after the oil price fall, oil industry demand6, measured as a share of mainland GDP, declined by 40 percent. A comparable fall in global oil-related demand amplified the downswing in the Norwegian oil service industry. Despite the shock to the oil industry, the downturn in the Norwegian economy proved fairly mild. Employment growth slowed, but unlike during the financial crisis and the downturn in the early 2000s, growth remained positive and registered unemployment did not exceed 3 percent. The mildness of the downturn following the oil price fall shows that the Norwegian economy has effective shock absorbers, such as flexible wage formation, a floating exchange rate and solid government finances. We also had monetary policy space, which we used (Chart 13). 5 See, inter alia, Official Norwegian Reports NOU 2013:13: Lønnsdannelsen og utfordringer for norsk økonomi [Wage formation and challenges facing the Norwegian economy] (Norwegian only). 6 Measured as the sum of investment, intermediate consumption and labour costs in oil and gas production. 12  NORGES BANK  Chart 13 Monetary policy is the first line of defence. Policy rate and capacity utilisation.

The foundations for a fiscal compact have been laid – a suggestion presented before the plenary of the European Parliament at the ECB hearing on our annual report at the beginning of this month. It has been agreed that the annual structural deficit should not exceed 0.5% of nominal GDP. Euro area Member States will implement such a rule in their national legal frameworks at a constitutional level. The objective is to avoid excessive deficits before they arise, rather than  2  BIS central bankers’ speeches  trying to control them after they have emerged. An automatic correction mechanism is also foreseen in case of deviation. Moreover, the leaders agreed on a numerical benchmark for annual debt reduction to bring down debt levels. Sanctions will also apply automatically to euro area Member States in breach of the 3% reference value for deficits. The European Court of Justice may be asked to verify the implementation of these rules at national level. The new fiscal compact is an essential signal, showing a clear trajectory for the future evolution of the euro area. It frames expectations of both citizens and financial markets. Enshrining strict rules in primary legislation, making them enforceable by the European Court of Justice: all of this should contribute to making public finances in the euro area credibly robust. The ECB welcomes this outcome.
An important objective consists in raising the potential output growth of the European economy If France and Europe seek to secure sustainable growth at levels that are as high as possible, the key variable is potential output growth. There are three ways of raising the level of potential output growth: First, to boost investment: the more we invest and the lower inflationary pressures, the stronger potential output growth. For example, a two-point increase in the productive investment ratio (productive investment / GDP, 11,4 % during the last five years in France) over the next decade would bring about an average acceleration of more than 0,5 point in potential output growth over the same period. The second way of raising potential output growth is to increase the quantity of actual labour: The European Council of Lisbon set as a central objective the rise of the employment rate of our populations from 60 to 70 % in 10 years. The Council also fixed two sub objectives: to raise the employment rate of women to 60 % and employment rate of older workers (from 55 to 64 years old) to 50 %. As a comparison, the same overall employment rate stands at 75 % in the USA. Although some progress has been achieved in this area, the lack of substantive change and the tendency in some member states to continue to use early retirement schemes remain causes for concern.

Much of this borrowing was short-term, giving rise to a maturity as well as a foreign currency mismatch, either on the part of the banks or the companies to which they on lent. When the initial pressure on currencies emerged, domestic borrowers that had previously never had to think about hedging their foreign currency liabilities rushed to do so, turning a slide in the currency into an avalanche. Those who were too late were left with liabilities to the banks that were vastly inflated in terms of their domestic currency - and the banks were left with the resultant bad debts and a crippled ability to finance the routine needs of their customers. Captive banks 7. Why were banks not more discriminating in their credit choices and decisions? Part of the explanation is that in a number of economies banks were ordered or persuaded by the government to lend heavily to particular industries and companies. In other words, they were “captive banks”. This allowed the companies concerned to become over-leveraged (and thus vulnerable to economic downturn) and directed resources into unprofitable investments. The banks concerned had little incentive to develop proper lending skills. Concentration risks and connected lending 8. Moreover, banks in some economies were over-exposed to single borrowers, often those connected with the lending institution. Such lending is usually of poor quality, not having been made at arm’s length, and means that the shareholders have no real capital at stake in the bank (because it has effectively been lent back to them).
While in Ireland only two banks participated in the tests, in Spain all listed banks and savings banks took part and information was provided on the exposure to risks, real estate risk in particular, with a notably greater degree of detail and transparency than in other countries. But what is to be done when markets forget or investors’ doubts resurface? Once again in these cases, the medicine should be more transparency. This is why, in late November, we took the initiative of explaining again the situation and we once more laid bare Spanish banks, and savings banks in particular. We have asked banks to explain in detail their situation to the market. In particular, the Banco de España has given instructions to the related banking associations to ensure that institutions disclose standardised additional information on a quarterly basis to the market on their exposure to the real estate development and construction sector, detailing the percentages of doubtful loans, the related collateral and the provisions set aside to withstand their potential impairment. They also have to give details of their retail mortgage portfolio, including the related LTV ratios and the percentages of doubtful assets. Finally, they must assess their market funding needs and the short-, medium- and long-term strategies they have implemented. All this is necessary because when reality is perceived as being worse than it actually is, the best possible response is to explain it in the finest detail. A further lesson drawn from the conduct of markets is that they do not like uncertainty.

Should we always heed the advice of the markets? Not necessarily. It’s highly recommendable to do so when their messages are sensible ones. And frequently, albeit belatedly, they demand we do what benefits us. But they also make mistakes occasionally and, in those cases, there’s no sense in our getting worked up and calling them ignorant. That serves no purpose. The right response is to offer them the most information possible and to explain to them our reasoning. This is how to convince somebody, and it is how we should react to the markets. Indeed, the markets are no more than people. That is why when I’m asked how we should react to them, my usual advice is to treat them like the people they ultimately are. Thank you. BIS Review 171/2010  5
Mark Carney: The turn of the year Text of the Peston Lecture by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the Queen Mary University of London, London, 19 January 2016. *  *  *  I am grateful to Ben Nelson and Iain de Weymarn for assistance in preparing these remarks, and to James Cloyne, James Talbot and Matthew Waldron for background research. It is a pleasure to be at Queen Mary University of London to give the 2016 Peston Lecture. Fifty years ago Lord Peston was invited to take up a Chair in Economics at Queen Mary and to found the forerunner of today’s School of Economics and Finance. Anniversaries provide the opportunity to look back and plan ahead. When doing so, it is sometimes helpful to recall Shimon Peres’ definition of a young person as someone whose future ambitions exceed their past accomplishments. So while Queen Mary can take justified pride in its long-standing commitment to community engagement and widening local participation, what is most striking are your plans for the future, including to push forward translational research in population-scale genomics, with the potential to bring health benefits to people across the UK and beyond. Queen Mary is clearly a young institution. The turn of the year is also a time for reflection and planning. The beginning of 2016 in the UK is significant in that it marks a turning of a page in banking regulation and a turn in financial conditions.

This is likely the product of both ‘pull’ and ‘push’ factors: many UK firms report skills shortages which foreign workers can help to fill; while weak wage and employment prospects abroad raises foreign workers’ willingness to migrate to the UK. The implications for inflation are likely to be relatively small as migrants not only supply labour – raising supply – but also spend their incomes – raising demand.14  14  See the Box on page 30 of the May Inflation Report for estimates of the impact of alternative paths for labour supply. See Nickell and Saleheen (2015) for estimates of the impact of immigration on occupational wages.
A subject that often comes up for discussion is the cost of living allowance or COLA. It has to be recognized that in Malta the allowance is determined on the basis of a basic or social wage, and COLA is a flat euro amount, granted regardless of the level of pay. This limits its impact on competitiveness. Nevertheless, the award of COLA is disconnected from productivity gains and hence may constrain firms’ ability to respond to changing market conditions. It also raises the risk of secondary cost increases after an initial price shock, which may come for example from an increase in imported prices. It may not be possible to neutralise such increases in imported prices and simply compensate for them in wages without significantly losing competitiveness of the enterprises concerned, especially if our competitors are absorbing these external shocks through an internal devaluation. It is relevant to note that the world economy is going through unusual times where some countries are undergoing internal devaluations. Malta cannot afford to be oblivious of the impact that these realities exert on its competitiveness. The list of euro area countries passing through significant corrections is impressive, namely: Ireland, Portugal, Spain, Italy, Slovenia, Cyprus and Greece. This apart from other non-euro area member states that are also going through difficult and corrective changes in their economies.

Issues and questions relating to the location of payment systems and market infrastructures are also gaining in importance for central banks. •  Central banks have started interacting and cooperating with new interlocutors and partners outside the banking area. Many new players and providers in the field of payment, clearing and settlement services are indeed non-banks with which central banks traditionally had little – if any – direct interaction. •  Central banks are increasingly concerned with the division of responsibilities and the allocation of risks between infrastructure providers and their clients. The responsibility for the safety of a payment, clearing or settlement system rests largely with the system operator. However, to the extent that participants in the system can take action to reduce risks that may have a bearing on the system as a whole, they should be given incentives to do so. For example, the margining systems of central counterparties should give incentives to participants to trade prudently. •  Central banks are increasingly involved in cross-border cooperation and information exchange with other central banks and authorities contributing to financial stability in order to obtain a comprehensive picture of risks and vulnerabilities and to identify appropriate and effective mitigating policy actions. •  Central banks have been intensifying their efforts to produce consistent regulatory and oversight standards on a cross-border basis. The Core Principles for Systemically Important Payment Systems and the CPSS-IOSCO Recommendations for Securities Settlement Systems and Central Counterparties have been important steps in this direction.
Independence is of great importance in the medium and long-term perspectives of the Central Bank. An independent central bank, with respect both to its goals and its instruments, will promote the achievement of the price stability target. A central bank which is independent with respect to instruments will implement its monetary policy effectively. It is also recognised that a central bank which is independent of political authority will play an important role in minimising fluctuations arising from political uncertainties. Today, it is apparent that economies with independent central banks that have maintained monetary and financial stability are very strong. The basic features of the Central Bank’s medium and long-term strategies are to choose price stability as its main target, to establish consistency between its functions and its main target, and to revise any functions that may impede the implementation of its monetary programme and in this context to achieve its independence. On the other hand, the organisational efficiency of the Central Bank can be seen as the complementary element of this strategy. There is no doubt that a central bank with qualified personnel, which fulfils its duties with high productivity, will earn full credibility. Distinguished guest, here let me quote one of the economists: “ Credibility cannot be purchased, it must be acquired. And this is achieved step by step, through consistent policy implementations.” To carry the Central Bank, one of Turkey’s most credible institutions, into the future with this in view is the fundamental mission of my fellow workers and myself.

BIS Review 37/1998  ˝
The target is set at 2.5 per cent. In the euro area, monetary policy is oriented towards price stability, defined as inflation below but close to 2 per cent. Inflation targeting has proved to be a sound system and particularly well suited for small, open economies. Normally, interest rate setting under an inflation targeting regime will also contribute to stabilising output and employment. In periods of recession, with prospects of low and falling inflation, the interest rate will be reduced to boost demand and prevent an inflation level that is too low. During an upturn when there are prospects of high inflation, the interest rate will be increased. Inflation targeting is softer around the edges than the exchange rate regimes Norway and many other countries operated earlier. The system has proved fairly robust to disturbances. Nevertheless, the soft landing of the Norwegian economy after several years of high domestic cost inflation and a low level of activity abroad must not lead us to believe that output and employment cannot show pronounced fluctuations in the future. We cannot expect the interest rate to have the same impact from one period to the next. The economy is also exposed to unexpected disturbances. As a result, we cannot fine-tune economic developments using the interest rate, but avoid the largest effects when the economy is exposed to disturbances. Experience seems to indicate that inflation expectations remain stable even if inflation varies somewhat as long as the interest rate is used actively to curb effects.

Even if capacity utilisation in the Norwegian economy rises, there appears to be little risk that inflation will rapidly move up to a level that is too high. Inflation was unexpectedly low in the first months of this year, but in the light of our highly open economy we must perhaps expect somewhat wider variations in inflation than some other countries. The projections and assessments presented in Inflation Report 1/05 may as a whole imply that the key rate can after a period, and then gradually, be brought up to a more normal level. At its monetary policy meeting on 16 March, Norges Bank’s Executive Board decided to leave the key rate, the sight deposit rate, unchanged at 1.75 per cent. The Executive Board weighed the objective of bringing inflation back to target and stable inflation expectations against the risk that output growth may eventually be too high. 6  BIS Review 18/2005