samchain/econo-pairs-v1 huggingface dataset:
In many companies, the large increase in available person-hours was probably not fully utilised immediately. A considerable share of production growth so far this year may be the result of improved utilisation of existing company workforces. In addition, the use of foreign labour seems to have increased recently. Inflation decelerated markedly from summer 2003 and continued to fall in the beginning of 2004. Consumer price inflation has subsequently picked up, albeit at a gentle pace. In August, the year-on-year rise in consumer prices adjusted for tax changes and excluding energy products was 1.3 per cent. Prices for imported consumer goods have continued to fall. The decline in prices may reflect high productivity growth in the production of some goods and large investments to increase production capacity, particularly in China. Prices for domestically produced goods and services rose by 2.1 per cent in the twelve months to August this year. On the basis of the pay increases agreed upon in this year’s wage settlement, combined with the estimates for wage drift and wage carry-over, annual wage growth is projected at around 3½ per cent this year. Low wage growth will contribute to curbing the rise in prices for domestically produced goods and services. Economic growth among trading partners is expected to be somewhat lower this year than in 2004. In the years ahead, growth is expected to be relatively stable. Uncertainties that may contribute to weaker developments include high oil prices and the possibility of weaker housing markets in a number of countries.

In the long term, the most important factor will be how we manage our national wealth. Even though Norway’s petroleum wealth is substantial, it is our human resources that account for most of our national wealth. Even a small increase in the “return” on human capital might generate considerable gains. The return on this capital partly depends on our pension schemes and the application of social security rules. These should be designed in such a way that they provide incentives and opportunities to work. Labour market legislation must also promote production and employment. In May, the Storting (Norwegian parliament) deliberated the Pension Commission’s proposals for reforming the national insurance system. There was agreement on some of the main points, but the specific content has yet to be determined. If we succeed in reducing the  6/7  growth in pension expenditure by modernising the national insurance system and introducing other reforms, this will be an important step towards addressing the fiscal challenges facing us. 7/7
Moreover, as in most countries, even in our country the gap is deeper in the part of the private accumulated capital than in the public capital. However, according to the dynamics, a characteristic of the Macedonian economy is that, unlike most of the economies in the region which registered significantly reduced investments (an average of about 10 p.p. in GDP) in the post-crisis period, until 2017 in our country their share registered an increase. This was underpinned by the stable inflow of foreign direct investment, the country's investments in infrastructural projects, and more important, through relatively solid and sound credit support. The credit support, however, was enabled through the continuous, albeit gradual, growth of the total domestic savings, including savings in the banking system. Looking ahead, there is no doubt for a need of investment growth, meaning an undisputed necessity for encouraging domestic savings in order to reduce the gap between domestic savings and investments. Otherwise, the gap will need to be financed to a significant extent by external sources, although such conditions are not unusual for developing countries, which, in conditions of limited domestic resources, are directed towards the use of external sources for supporting investment and economic growth. It is also important that the lack of domestic savings in one part is compensated by the high inflows of private transfers, which are maintained at a relatively high level in the Macedonian economy, which is close to the level of the domestic savings rate.

In these circumstances, it is vital that the gain in the share of our sales, both abroad and at home, should be the main driver of activity in Spain. And, accordingly, achieving sustained competitiveness gains, which must come from the implementation of ambitious supply-side reforms and measures, is crucial. If these reforms and measures should restore confidence in the Spanish economy, reduce financing costs and improve the foundations for future growth, 2013 may witness a recovery. In this situation, the 2012 Budget forms part of a more general medium-term consolidation strategy, requiring the collaboration of all levels of government. Details will be available in a few weeks, when the Government presents the Stability and Growth Programme to the European authorities. The Stability Programme should contain precise and explicit details of all the elements on which this consolidation process will be based. The targets set by this Programme must anchor the budget measures of the coming years, ensuring that the general government deficit can be reduced to below 3% of GDP in 2013 and, subsequently, that a balanced budget can be achieved. In addition, they must seek to stabilise the public debt ratio and subsequently reduce it to below 60% in 2020. The fiscal consolidation so defined must be considered unavoidable and necessary to restore economic growth in the medium term, although the size and timing of the adjustment required may have negative effects on activity in the short term.
And the real pessimists argue that the longer the fall is delayed the more dramatic it will be. Now it is certainly true that if these risks were to materialise then we would indeed be hard pressed to keep the economy moving forward. But such risks need to be kept in proper perspective. The question is - are these possible developments a necessary - or even the most likely - outcome? I don't think that they are. It's entirely understandable - in the light of the global industrial slowdown and generally weak export markets, and after a third year in a row of sharply falling equity prices, that business and financial market confidence should remain subdued. And people seem sometimes surprised to be told that, on the macro-economic data, we passed the trough a year or more ago. The US economy, in particular, on which so much of the rest of the world depends actually expanded by just over 3% in the year to the third quarter of last year - which is well above its long-term annual average rate until the surge in the later 1990s. The Eurozone also grew - though only by around 1% over the same period, and there was even positive growth in Japan. Now that's not exactly a strong recovery after the slowdown, but it follows only a relatively mild recession. More recent data certainly have been somewhat mixed - perhaps reflecting Alan Greenspan's predicted "soft-patch" through the winter; and we're in the shadow of uncertainty over Iraq.

Zdeněk Tůma: Forecasting at central banks Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Forecasting Dinner 2004, 20 February 2004. *  *  *  Ladies and gentlemen, dear colleagues, It is my pleasure to be here tonight to share with you some thoughts on the forecasting process at central banks, and the Czech National Bank in particular. It is generally recognised that central bank policies must be forward-looking. As emphasised by Milton Friedman, for example, there are long lags between monetary policy actions and their impact on the economy. This means that policies responding only to the current state of the economy might miss the turning points and be pro-cyclical rather than stabilising. Therefore, central banks have always been among the leaders in the macroeconomic forecasting field. The actual way in which forecasts are produced and used at central banks has, however, changed substantially over the past few decades. The changes have reflected developments in both the economic (and econometric) theory and in monetary policy regimes. First of all, the large-scale models that were used in the 1950s to 1970s were subject to strong criticism. They were hit by a series of structural breaks, which made the previously observed relationships unreliable. Consequently, it was argued that these breaks were not a result of bad luck only, but also reflected a lack of microeconomic foundations of the models, neglect of forward-looking expectations and ad hoc econometric restrictions.
The diversified portfolio has posted considerably lower falls in value in crises, and the gain increases with the duration of the crisis. Chart 7: Increasing gains from diversification over time In addition, broad diversification reduces the portfolio’s vulnerability to extreme events, which can be illustrated by examples from the history of global financial markets since 1900. We have data for equity market returns in 23 countries for this period. Two of these markets were closed down last century and the assets expropriated, ie Russia in 1917 and China in 1949. The markets did not reopen until the beginning of the 1990s. While the Chinese market was small in 1900, the Russian market accounted for six percent of a market-weighted global index.6 Chart 8: Fifty years of negative real returns in individual countries Although developments have been less dramatic in other countries, equity markets in France, Germany and Japan have all experienced periods of negative real returns of more than 50 years. The longest period of negative real returns for the global index has been just over 20 years.7 Diversification therefore provides some protection even against the most extreme outcomes, even though it will never be possible to completely shield the return on the GPFG from such extreme events. The risk associated with being a shareholder in 9000 companies Chart 9: “Diversification is the only free lunch in finance” Harry Markowitz, the founder of modern portfolio theory, is reported to have said: “Diversification is the only free lunch in finance”.

The third lesson is that equity market returns have been high despite periods of substantial equity market declines. Estimates of the future return on the GPFG are highly uncertain, but a lower equity allocation would have pulled down the fund’s expected return. The Ministry of Finance estimates an expected real rate of return on the GPFG of 3 percent. Underlying the decision to allocate 70 percent of the GPFG to equities is an acceptance of expected fluctuations in the fund’s return, in the short and longer term. The investment strategy has enjoyed broad support since the fund’s inception. By adhering to the strategy through turbulent periods, the GPFG achieved a return equivalent to NOK 4 300 billion at the end of the third quarter. Historical developments since 1900 and since the GPFG’s inception underpin the expectation of higher returns in equity markets than in fixed income markets over time. Broad diversification to reduce risk is a key element in the overall investment strategy. At the 3/6  BIS central bankers' speeches  beginning of 2018, the GPFG was invested in more than 9000 companies in 72 countries. An important insight from financial theory is that the expected return on an investment is not determined by the risk associated with the investment in isolation, but by that investment’s contribution to systematic risk in a portfolio. An investor cannot be expected to be paid for the extra risk of pursuing a narrow investment strategy.
Housing market activity has begun to recover, and a widely followed national home price index is up 12 percent over the 12 months ending in September.1 Anecdotal reports suggest that this higher-than-expected increase in home prices is due to a relatively low number of homes for sale. Due to this shortness of supply, there is reason to expect increases in starts going forward. Yet another bright spot on the horizon is the fact that growth prospects among our major trading partners have improved following a few years of lackluster performance which induced a sharp slowing of growth of U.S. exports. In particular, the euro area appears to have emerged from a protracted recession and is experiencing modest but positive growth. To summarize, while growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015. The private sector of the economy should continue to heal, while the amount of fiscal drag  1  2  Based on the CoreLogic home price index including distressed sales. BIS central bankers’ speeches  should subside. Despite near-term concerns, growth prospects among our major trading partners will improve further next year. This combination of events is likely to create an environment in which business investment spending will strengthen. As growth picks up, I expect to see more substantial improvement in labor market conditions and a gradual updrift in inflation back towards the FOMC’s target rate.

Until very recently, climate change was seen as something outside our remit. This has changed as a result of the 2015 Paris Agreement. What has changed since 2015 to warrant this sudden interest on the part of banking regulators and supervisors in climate risks? First, in 2015, the Paris Agreement stressed for the first time the importance of the financial system for steering the resources needed to transform the economy towards a sustainable model. Second, in 2018, the first NGFS report stated that climate-related risks were a source of financial risk, and that supervisors and central banks should shore up the system’s solvency in the face of these risks. Both elements, risk and funding, are clearly interrelated. Let´s start from the risk view. In my public interventions I keep on highlighting one essential feature of any viable business model, namely the need to identify and quantify all the costs and risks involved in any given transaction and pass them through to prices and capital.
From the recall date onwards, the old notes lose their status as legal tender and can then only be exchanged at the SNB or one of our agencies. The future of cash in the digital age I would like to finish by looking to the future. The digital transformation taking place in our economy is also affecting developments in the payments arena. As part of its statutory mandate, the SNB must not only ensure the supply and distribution of cash but also facilitate and secure the operation of cashless payment systems. A well-functioning payment system is critical for our economy. Technological progress is also changing customers’ expectations and needs in terms of cashless payments – for instance as regards speed and user-friendliness. In this area too, the SNB is a participant in innovation. Specifically, we are ensuring that Swiss Interbank Clearing (SIC) – our country’s powerful infrastructure for transacting cashless payments in Swiss francs – continues to work quickly and efficiently and thus remains as attractive as possible. Promoting and ensuring both the supply of cash and the smooth functioning of cashless payments is no contradiction. The various payment methods satisfy the differing needs of our population. Our latest survey on payment methods, published in May 2018, showed that the public’s use of – and affinity for – cash remains high. It also confirmed that the Swiss population like to be given the choice between paying cashless or paying with notes and coins. Banknote circulation in our country has increased steadily in recent years.

The new substrate makes the notes more robust, and we expect them to have a longer life cycle; this, in turn, will have a positive effect on overall costs. Mass production of the notes, involving a new substrate, complex printing procedures and innovative security features, initially posed a few unexpected problems. This led to delays. The SNB had originally planned to issue the first denomination in autumn 2010, but it became clear that additional development work would be needed before the green light could be given for mass production. The issue date had to be postponed twice on account of these refinements. The decision to deploy a new substrate was a bold one – and turned out to be the right course of action, as it allowed us to incorporate unique security features. However, we were dependent on one supplier for the production of the Durasafe substrate, and this had consequences around two years ago. When the Durasafe manufacturer Landqart found itself facing a liquidity shortage in 2017, the SNB decided to take over the company in conjunction with Orell Füssli in order to safeguard banknote production using this unique substrate. Another key element of the new banknote series is the design. The core design elements on the notes were to be memorable and feel contemporary even years later. We wanted motifs that would not only be clear and vivid but would also have emotional appeal. Here too, we had to overcome some obstacles.
The costs of taking these courses in college are high, especially because they do not count for college credit. Low readiness contributes to persistently low college completion rates, with only 55 percent of first-time undergraduates completing a degree within six years.13 College dropout rates are especially high among lowerincome, part-time, and nontraditional students, with high costs, low perceived ability to pay, and a lack of information about the returns to degree completion also contributing to the high dropout rate. The importance of college readiness underscores the value of high-quality K-12 schooling. But, research indicates that fewer than half of five-year-olds from low-income families possess the math and reading skills, behaviors, and overall health required for learning success, compared to 75 percent of children from middle- and high-income families.14 These differences are important because they have long-lasting effects on academic achievement and future careers. A substantial body of evidence, including research by economists at the Minneapolis Fed, points to very large economic returns to high-quality preschool and early-childhood development programs.15 Clearly, such programs can play an important role in improving economic mobility. I benefited from nursery school and kindergarten and a mother who taught me to read before I entered elementary school. And, when my junior high school tried to move me out of an accelerated math program, my mom intervened and got me back in. Paying for college is another major impediment to college attendance and completion.

Jean-Pierre Roth: What to expect from monetary policy? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the International Center for Monetary and Banking Studies (ICMB), Geneva, 25 November 2003. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  A number of current issues, such as the weakness of the economy and the new National Bank Law, raise the question as to what we can expect from monetary policy. With regard to the stability of consumer prices, the answer is relatively simple. The goal of price stability is at the very top of the Swiss National Bank’s priority list. Since both inflation and deflation are monetary phenomena over the long term, the SNB can and will guarantee price stability in future too. Expectations of monetary policy are considerably lower when it comes to regulating economic activity. Economic activity in Switzerland is strongly dependent on growth abroad. Inflation does not bring about long-term economic growth. Stable prices, however, are the best precondition for sustained growth. A goal of price stability automatically ensures a degree of stability in the economy. Because of uncertainty and time lags, however, fine-tuning the economy is an impossible task. Speculative bubbles in the real estate and equity markets have been an increasing source of macroeconomic instability during the past two decades.
In 1980, Odd Aukrust, research director at Statistics Norway said the following about economic developments in Norway: “Unfortunately, there is even less reason for optimism this time. It appears that the competitive position of Norwegian manufacturing will weaken in the coming year. The main problem is that no one controls price developments. With an inflation rate of around 10 per cent a year, no one dares to make investments that could stop this price carousel.” 3 From the second half of the 1980s, the authorities started using monetary policy to control inflation. At the beginning of the 1990s, inflation had fallen, and since 1988, inflation has averaged 2½ per cent. Studies of price developments for all goods and services show that price formation underwent a permanent shift around 1988. 4 A transition occurred from a period of high and unstable inflation to the current period of low and stable inflation. Bringing the rate of inflation down had its costs. In the years from 1988 to 1992, the Norwegian economy experienced the deepest recession of the post-war period. But growth picked up quickly, and the 1990s as a whole were a golden decade. It also appears that the present decade will be favourable. A foundation was laid when the Norwegian authorities took control of inflation. Developments over the past 40 years illustrate that the most important contribution monetary policy can make to sound economic developments in the long term is low and stable inflation. This provides the economy with a nominal anchor.

In the conduct of monetary policy, we assess the objective of stabilising inflation at close to 2½ per cent over time against the objective of stabilising output and employment. Given the low inflation rate, we have decided to keep interest rates at a low level and at times considered an even lower interest rate. However, against the background of solid growth in the Norwegian economy since summer 2003, we have instead decided to use some time to bring inflation back to target. Household debt has risen sharply since the mid-1990s. At the same time, house prices have shown a marked increase. Debt developments through the 1990s can probably be viewed to some extent as a delayed adaptation to the deregulation of the housing and credit markets in the 1980s, after many households burned their fingers immediately after the deregulation. At the same time, the credit market has deepened. New loan products have emerged, and it is easier to raise loans. Borrowers can choose their repayment schedule. Credit and housing market liberalisation provides homebuyers with the opportunity to establish a high housing standard early in their adult lives and draw on this capital later in life. In recent years, household income growth has been solid, household confidence regarding the future has been strong and households probably perceive higher income levels as permanent. This may have resulted in a further rise in house prices and debt. In addition, low real interest rates are currently contributing to this.