samchain/econo-pairs-v1 huggingface dataset:
My conviction is that the world today is better managed than in the past and, in that sense, is safer. What has increased, however, is the magnitude of a potential crisis. This is what I refer to as uncertainty. The big challenge for international business of today is to learn to live with uncertainty. And in this domain we still have a way to go. Nowadays, our difficulties in dealing with uncertainty permeate all our discussions about the responsibilities of different private and government agents. I perceive an understandable – but in my opinion misconceived – nostalgia for a world that used to appear safer, thanks to regulation. We hear demands for the construction of barriers to protect ourselves from the menacing world outside – demands for more regulations to ensure that financial providers cannot go bust, cannot cheat, cannot make wrong decisions; more trade barriers to ensure the survival of domestic producers; more restrictions to the movement of persons to protect our workers… The problem with this dreamworld cocoon is that it has never worked and will not work. And what is even worse, if it did work, if it were possible to barricade ourselves against all possible menaces, we would still not be better off. Globalisation is a great opportunity and it can make us all richer and safer. But we have to learn to live with risk. In fact, the main danger I see today is that because we live in a more stable world, in a safer world, we may become complacent.

This stands in stark contrast with the mystique and opaqueness which characterized earlier central bank communication. For a long time central banks have focused predominantly on their interest rate policy. Considerably less attention has been devoted to their liquidity policy which used to be carried out somewhere in the basement of the monetary policy temple, far away from the spotlight of the announcement of interest rate decisions. This year, liquidity policy has moved into the spotlight and has taken over the lead role at the forefront of the monetary policy scene. The current situation also highlights the close interaction between price stability and financial stability and that the focus of policy makers today is on crisis management. The challenge in the coming months and year is to pursue a dual approach consisting of short-term action and long-term solutions. We must constantly be on the alert to put out fires when and where they emerge, while studying the causes of the current crisis and finding the right long-term remedies in the form of new rules and systems so that we do not repeat the same mistakes. As the French saying goes, there is no point in putting a band-aid on a wooden leg. 2  Ecklund, Gunhild (2008), Creating a new role for an old central bank: The Bank of Norway 1945-1954, Series of Dissertations No. 2-2008, BI Norwegian School of Management. 3  Sejersted, Francis (1994), On the so-called “autonomy” or “independence” of central banks.
More importantly, the monetary expansion between 1986 and 1988 occurred against the backdrop of an unemployment rate of around 1%. A careful examination of the data of that period reveals that the margins of slack in resource utilization were rapidly declining at the time. Moreover, credit expanded dramatically during the late 1980s, thus providing a direct channel for the excess liquidity to find its way into excess demand. The current economic environment is a different one. Still adjusting from a historically unique speculative financial bubble, we currently observe an unemployment rate of close to 4% which markets expect to rise further in the months to come. In addition, virtually any measure of slack in resource utilization suggests that our current output gap is somewhere between 1.5% and 3%, thus indicating that it would take at least a year of significant above-trend growth before a balance would be reached between aggregate demand and potential supply. In conclusion, let me repeat what we have said after our last quarterly monetary policy assessment. In light of the underlying weakness of economic conditions in Switzerland, the risks pertaining to the sustainability of the welcome upswing in the United States and the benign global and domestic inflation outlook, we conduct our monetary policy with the aim of preventing a premature shift to a more restrictive monetary policy stance which could endanger the fragile upswing underway in Switzerland. Given the openness of our economy, exchange rate developments greatly affect monetary conditions in Switzerland.

Whether they are, or not, correctly implemented will make a big difference in our capacity to quickly return to price stability. BIS central bankers’ speeches  3
We expect that to weigh heavily on demand. We judge the appropriate degree of monetary tightening taking that into account. What I reject is the argument that in our response to Covid the Bank’s Monetary Policy Committee let demand get out of hand and thus stoked inflation. The facts simply do not support this. On the latest number, UK GDP in March was only 0.6% above its pre-Covid level, and it is substantially below the path it was expected to follow pre-Covid. What we do have is a very tight labour market. But that does not look like a story about rapid demand growth. The labour force has shrunk by around 1% since the onset of Covid. It looks much more like an impact from the supply of labour. The job of the Bank of England is to return inflation to target at a time when a very large headwind from external shocks, and an internal shock from a fall in the labour force, are reducing real incomes but risk leading to persistence in domestic wage and price setting, socalled second round effects. The Bank of England will, as always, take monetary policy decisions to ensure that the inflation target is met over the medium term. We have raised the official rate four times so far and have made clear that in order to bring inflation down to target we are prepared to do so again based on the assessment at each of our meetings.

I am grateful to Ben Broadbent, Alan Castle, Karen Jude, Nick McLaren, Huw Pill, Dave Ramsden, Fergal Shortall and Seb Walsh for their assistance in helping me prepare these remarks.
xxi  Chart 11: The UK bond-equity correlation has turned negative for the first time ever Correlation 0.8  0.6  0.4  0.2  0.0  -0.2  -0.4 1759  1809  1859  1909  1959  2009  Source: Thomas and Dimsdale (ibid.) and Bank calculations. Line shows ten-year trailing correlation of monthly returns on UK equities and consols. See also Roberts-Sklar, M. (2016), “250 years of the bond-equity correlation”, Bank Underground, 20th October. This unprecedented desire for safety has helped to drive down the equilibrium interest rate – the interest rate central banks must deliver in order to balance demand with supply and so achieve stable inflation. In this sense, low policy interest rates are not the caprice of central bankers, but rather the consequence of powerful global forces, including debt, demographics and distribution. xxii  9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  Those same forces are contributing to deficits in defined-benefit pensions. The value of these schemes’ investments in equities and real estate are low relative to the level of interest rates because investors are valuing safety much more than they are expecting faster growth. Said differently, since pensions are future claims on the economy, there isn’t a parallel universe of higher interest rates, higher growth and equity prices, and lower pension deficits. That is, there isn’t without real structural reform. Blaming monetary policy avoids these hard truths.

Through in-depth market knowledge of the financial services industry, it will without doubt spur greater innovation in Islamic financial services, leading to cutting-edge products and services. Equally important, it is also expected to enhance linkages between the Middle East and Asian regions, acting as a conduit to promote greater economic integration and encourage deeper intermediation of Islamic markets. This further underscores the economic integration of both the Middle East and Asian regions and further enhances linkages in the New Silk Road, a manifestation of the thriving global Islamic finance market. Ladies and Gentlemen, On this occasion of the official launch of Kuwait Finance House Research, it is with pleasure that I congratulate Kuwait Finance House for its forward-looking outlook and commitment to contribute to the success of Islamic finance by allocating resources in having a dedicated research entity to drive its Islamic banking business forward. It is my hope that Kuwait Finance House will continue to play a major role in the initiatives to further develop Islamic banking both here and in Asia. I wish Kuwait Finance House Research every success in its endeavours. In the name of Allah, Most Gracious, Most Merciful, it now gives me great pleasure in officiating the launch of Kuwait Finance House Research. Thank you. 2  BIS Review 48/2007
I am not sure if this is a dimension covered in Professor Genberg's paper on Endogenous Dollarisation, but it is of particular relevance to Hong Kong. The third paper, to be presented by Professor Kumhof, deals with issues regarding price dynamics. Professor Kumhof's paper focuses on pricing policies and inflation inertia, at a time when we are experiencing deflation in Hong Kong: I am sure, however, that there are insights that we can derive from the paper and the discussion. Research on price formation is high on the agenda of the HKIMR and the HKMA, and possibly in academic and other organisations active in economic research in Hong Kong. We have had deflation for some five years now and we are still debating the relative importance of cyclical and structural factors behind that deflation. There is also debate on whether measures could and should be taken to limit the damaging effects of deflation, notwithstanding the fact that Hong Kong is a highly externally oriented economy. Views on price dynamics will contribute to these debates. As you know, the HKIMR was established by the HKMA. This reflects the importance we attach to thorough analysis of monetary and financial issues that Hong Kong is facing. Developments in the local, regional and global economies provide many opportunities for Hong Kong, but also serve as potential sources of risks. It is therefore critical that we actively seek to understand these developments.

And add-ons to these capital and liquidity buffers for institutions posing the greatest systemic risk are being discussed to address the second. 9 In essence, this is a taxation solution to the systemic risk pollution problem. 10 There is a second approach. On 21 January 2010, US President Barack Obama proposed placing formal restrictions on the business activities and scale of US banks. Others have made complementary proposals for structural reform of banking. 11 Typically, these involve separation of bank activities, either across business lines or geographies. In essence, this is the prohibition solution to the systemic pollution problem. This sets the scene for a great debate. It is not a new one. The taxation versus prohibition question crops up repeatedly in public choice economics. For centuries it has been central to the international trade debate on the use of quotas versus subsidies. During this century, it has become central to the debate on appropriate policies to curtail carbon emissions. 12 In making these choices, economists have often drawn on Martin Weitzman’s classic public goods framework from the early 1970s. 13 Under this framework, the optimal amount of pollution control is found by equating the marginal social benefits of pollution-control and the marginal private costs of this control. With no uncertainty about either costs or benefits, a policymaker would be indifferent between taxation and restrictions when striking this cost/benefit balance. In the real world, there is considerable uncertainty about both costs and benefits. Weitzman’s framework tells us how to choose between pollution-control instruments in this setting.
As I mentioned earlier in my speech, the first quarter of 2009 is characterized as a period where impacts of the global financial crisis on the real economy were felt more clearly and inflationary pressures that dominated a major part of 2008 have been overtaken by fears of deflation and growth. With the effect of commodity price declines and slumps in domestic economic activity since mid-2008, inflation in Turkey took a sharp plunge in this period. Waning inflationary concerns have allowed the Central Bank to focus on restraining the potentially devastating effects of the crisis on the Turkish economy without conflicting with our primary objective of maintaining price stability. Considering the policies that have been implemented since the second half of 2008 within this context assumes great importance. Recent data point to an ongoing slowdown in economic activity of the first quarter of the year. Although domestic demand showed signs of a limited recovery over the previous quarter, it still maintains its weak course. Labor market data also indicate that this downward trend will continue and that it will take some time for economic activity to recover. Slumps in commodity prices and the significant slowdown in foreign demand in this period also add to the downward trend of inflation. Within this framework, the Central Bank adopted a strategy of front-loading policy easing by cutting overnight rates by a total of 700 basis points from November 2008 to April 2009 (Table 2).

Any further narrowing of the interest rate differential  5 6  Other hypotheses relating to the fall in the real interest rate are discussed in the economic literature. However, they are likely to provide less of an explanation than the factors of ageing and declining productivity growth. The adjusted method for calculating the exemption threshold takes effect on 1 November. The income the SNB earns from negative interest is currently expected to almost halve. Page 4/8  would increase the upward pressure on the franc, which would lead to lower economic growth and higher unemployment. The measures taken by the central banks to combat the financial and economic crisis – low policy rates, forward guidance on the expected course of short-term interest rates, and securities purchases – have undoubtedly increased downward pressure on the general level of interest rates in the short and medium term. But the decline in capital market rates, which we saw in the chart earlier, began long before the outbreak of the crisis. This reinforces the notion that when interest rates fall, it is the aforementioned powerful structural drivers which are at work – i.e. persistently lower inflation expectations, greater propensity to save and lower propensity to invest. From today’s perspective, therefore, the neutral interest rate that is relevant for monetary policy is also below previous empirical levels. Consequently, shortterm interest rates could remain below their usual levels even if the central banks normalise monetary policy again at some point in the future.
The level of investment is assumed to remain high next year, before declining somewhat the following year when Ormen Lange and Snøhvit are scheduled for completion. No plans have so far been adopted for new projects of a similar size, but continued high oil prices are expected to contribute to high investment both in exploration and in fields in operation in the years ahead. There are prospects of strong growth in the Government Pension Fund-Global. Given our assumption for oil price developments ahead (oil futures), spending in line with the expected real return on the Fund implies that the structural, non-oil deficit may increase by close to NOK 15 billion at 2006 prices in both 2008 and 2009. With a period of strong expansion in the Norwegian economy, somewhat lower petroleum revenue spending will be in line with the fiscal rule. Our projections are based on the assumption that fiscal policy will generate some stimulus to total demand and output in 2008 and 2009, but somewhat less than the expected return on the Fund would imply. Economic growth in Sweden, the UK and the euro area is high. Economic developments in China and India remain strong. GDP growth in the US and Japan has slowed. Consumer price inflation among a number of our trading partners is high as a result of rising energy prices, but the increase in prices for other goods and services remains moderate. Continued solid growth among our trading partners is in prospect.

We now have a web portal that offers such opportunities, identical to the statistical portals of many European Union countries. The presentation within the today’s workshop is the first since its launching. The National Bank’s Plan of Activities we adopted yesterday also includes a project to further improve the availability and understanding of our press releases, information, data. In one of the first phases of the project, we plan to conduct surveys in order to obtain opinion from you, the journalists, as well as from other users of our information and data. But even before we embark on such a project activity, we would greatly value your suggestions and ideas, which will surely be an important road map for us to develop our communication with the public. According to recent releases, we are one of the most transparent central banks in the region and actually very close to the average index of Eastern European countries and the ECB.1 Of course, there is room for further improvement to approach more advanced economies, or the euro area as a whole. I believe that you, with your ratings and comments, will help us achieving this goal. A good opportunity for this will be the open discussion that is foreseen in the closing part of today’s event. In the end, for modern central banks, the rule “it would be good to have” no longer applies, but the rule “it must have” good, open communication with the public.
For example, the number of company bankruptcies and loan losses in the banks is usually higher when economic activity is low and vice versa. There is also a fundamental relationship between our fields of activity. The Riksbank’s most important tool in conducting monetary policy is the repo rate. One can say that we try to influence economic activity and inflation by steering the price of credit, that is,  BIS Review 119/2008  1  interest rates. But to be able to do this, the payment system and our interest rate steering system must function. Financial stability is therefore actually a necessary condition for being able to conduct monetary policy efficiently. With regard to financial stability, the Riksbank makes regular updated assessments. I shall soon return to our views on current developments. But before I do so, I would like to say a few words about what the task of safeguarding financial stability actually entails. Most people are probably aware that we have an inflation target for monetary policy. But what do we mean by financial stability? What do we mean by financial stability? Financial stability is not so easy to define. In the Sveriges Riksbank Act the Riksbank’s task that we commonly refer to as safeguarding financial stability is formulated as “to promote a safe and efficient payment system”. Put simply, this concerns working in different ways to ensure that he financial system is stable and functions smoothly. This is important for many reasons.

This applies for amounts of up to SEK 250,000 per customer and institution. It is only if the deposit has been made by another financial institution or in some cases if the amount is frozen that the deposit guarantee does not apply. This reasoning concerned what we could do in a situation where financial stability is threatened. Some central banks have recently been forced to take this type of measure. But none of the Swedish banks has had problems with its liquidity in the way I described in my example. So how do we view the current situation? Recent developments As I mentioned earlier, the financial turbulence has been included in our analyses for some time now, both with regard to monetary policy and financial stability. The Riksbank has regularly emphasised many of the risks in the financial system and what could happen if the financial turbulence should grow worse. The Riksbank bases its assessment on an analysis that focuses on the four major Swedish banks, as they account for around 80 per cent of the market. The Swedish banks have considerable equity, good profitability and limited loan losses. Our assessment is that there is a high degree of resilience to the international turmoil  BIS Review 119/2008  3  that has prevailed for some time now. But this is not the same as saying that the Swedish financial markets and banks are not affected by the situation. Of course they are.
Thus, despite our vulnerability to setbacks, these factors prepared the ground for Asia to be positioned for a rebound to a more sustainable growth. Allow me to take this opportunity to also say something about China, the host country for our meetings. Let me first of all thank the PBC and in particular, Governor Zhou for the very warm hospitality that has been extended to us. China has always recognised its important role in the region. With its ascension to the WTO in 2001, the increase in intra-regional trade has been an important catalyst in driving growth in the Asian region. For many of us, China has become our largest trading partner. This trend is reinforced by the two-way foreign direct investment flows in the region. The use of the Renminbi to settle these trade and investment flows is a further factor that facilitates and strengthens these trade and investment flows. In the area of Central Bank cooperation, the PBC has actively participated in all our regional groupings including that for the ASEAN economies. For Malaysia, this cooperation has manifested itself in many ways. The one event that I will always vividly remember is the one on 21st July 2005 at 7 o’clock in the evening when both China and Malaysia transitioned to a flexible exchange rate regime. For Malaysia, we had seven years earlier fixed our exchange rate during the height of the Asian financial crisis.

For the CESEE region, data shows significantly smaller capital growth in the post-crisis period (the only exception is Macedonia1). Though the decline/significantly depressed growth in TFP is the key factor for the observed slowdown in potential growth across the region, slower capital accumulation also played a role. Chart 4: Capital, TFP and potential GDP before and after the crisis (average growth rates across countries, in %) 6.0 5.0 4.0 3.0 2.0  1.0 0.0 avg. 2000-08 -1.0  avg. 2009-16  avg. 2000-08  Growth of total capital  CEE  avg. 2009-16  Growth of TFP  SEE  avg. 2000-08  avg. 2009-15  Growth of potential GDP  Baltics  CESEE  Source: World Bank, The Conference Board Total Economy Database and NBRM calculations. Apparently, the region is in need to boost investment growth, catch-up with the pre-crisis level, and narrow some of the existing gaps. As, not only has investment been lower compared to the pre-crisis period, but also some of the international institutions assess their level to be below estimated benchmarks, which are consistent with the features and the development level of the region. For instance, EBRD in its Transition Report (2015-2016)2 provides estimates for the investment shortfalls in some of the countries in the region. The estimates are perceived as conservative, as they do not reveal the needed investment level. They rather reflect the investment level consistent with the one pertinent to comparable countries.