samchain/econo-pairs-v1 huggingface dataset:
The increased competitive forces from globalisation (both actual and contestable) have also acted through product and labour markets to decrease the responsiveness of inflation to domestic slack, flattening the Phillips Curve slope (3). Monetary policy must take all these effects into account and, on balance, run the domestic economy with tighter spare capacity in order to accommodate them. III. Global Influences on the Stance of Monetary Policy Just as global factors affect the relationship between domestic slack and inflation, they influence the monetary policy setting needed to achieve the inflation target. In particular, global integration affects the transmission mechanism of domestic monetary policy, the degree of spillovers from foreign monetary policies, and the equilibrium rate of interest itself. 25  If and when global integration stops progressing, this shift down in the Phillips curve would reverse. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  For the past thirty years, a number of profound forces in the world economy has pushed down on the level of world real interest rates by as much as 450 basis points (Charts 7 and 8). 26  These forces include the lower  relative price of capital (in part as a consequence of the de-materialising of investment), higher costs of financial intermediation (due to financial reforms), lower public investment and greater private deleveraging. Two other factors – demographics and the distribution of income – merit particular attention.

21 For example, for the US, Blinder, A (2009) ‘How many US jobs might be offshorable?’ World Economics Volume 10 Issue 2, estimates that the potential to offshore service sectors jobs may have lowered wages by up to 14%. Arseneau, D and Leduc, S (2011), ‘Threatening to offshore in a search model of the labor market’ build contestability into a two-country model and find it can reduce wages by up to 5% in the source country. 22 Rotunno, L and Wood, A (2016), ‘Wage inequality and skill supplies in a globalised world’, Aix-Marseille School of Economics Working Paper. 23 BIS 87th Annual Report, ibid. 24 As noted above, technological changes have played a greater role in driving down the relative wages of less skilled workers. 19  9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Figure 1: Effects of globalisation on the Phillips curve  Changes in external demand will cause a shift along the Phillips Curve, as domestic companies adjust capacity utilisation in response (1). The series of positive supply shocks from increased product and labour market integration cause parallel shifts down in the Phillips Curve (2). These downward shifts will persist as long as integration continues. This may take a while, not least because the advent of digital platforms may extend these processes to a much broader range of goods and services markets. 25  The domestic economy needs to be run with tighter  spare capacity to accommodate these disinflationary effects.
Furthermore, looking ahead in monetary policy is hard when the economy is going through major changes that make it difficult to forecast the future path of the economy and inflation. It is quite clear that this demands a great deal of forecasters as well as of those who construct macro models. The forecasts concern inflation one to two years ahead, which calls, for instance, for reasonable precision in the measurement of the output gap and the relationship between the output gap and inflation. It is already evident, for example, that in the 1990s inflation forecasts in many countries were frequently on the high side. I believe that the best we can do, at least at this stage, is to pay close attention to incoming data in the forecasting process, and not mechanically use the results from models that rely too heavily on historical relationships. We have to deal more successfully with the fact that forecasts of economic developments can never be completely accurate and still allow monetary policy to be forward looking. When discussing monetary policy of today, we must remember that we have come a long way. The world economy shows strong growth coupled with low inflation and monetary policy has contributed to this development. However, there are interesting, though somewhat difficult, challenges ahead of us which must be met if we are to preserve this bright picture of the world economy. This conference will contribute to a better understanding of the issues and problems involved. 3  BIS Review 50/2000

President Dudley: Well, the fixed income market has been a good place to be because, basically, interest rates have been generally coming down, if you look at long-term bond yields. So, we would like to look at the government debt issue by the U.S. Treasury. Ten-year government debt is trading today about 2.4% which is pretty low, and credit spreads have narrowed over that period. So, fixed income has been a pretty good place to be invested in over the last 8 years. Same thing with U.S. equity market, though, for that matter. If you bought the U.S. equity market at the very bottom in 2009, it’s more than tripled in price since then. As an investor, you’ve done pretty well if you’ve stayed invested through that entire period. Now, I would expect that fixed income investing is going to be less attractive going forward because interest rates still are at a very, very low level. So, some of the gains that people have seen in fixed income have been really prices going up because interest rates were declining. And I think that you’re probably not going to see prices going up a lot because interest rates are declining going forward. So I would guess most likely, most people think that short-term interest rates will gradually rise over the next couple of years. That certainly is what the Federal Open Market Committee expects, and as that happens people generally expect that longer-term interest rates will eventually rise.
To this end, the Basel Committee has tabled an important set of measures aimed at increasing the financial system’s resilience in the medium and long term. These include most notably: –  Firstly, the proposal to increase the amount and quality of capital required of banks in order to enhance their loss-absorption capacity. The definition of capital will, moreover, be more transparent and internationally comparable. –  Secondly, consideration is being given to introducing minimum global liquidity standards and establishing common criteria to help supervisors identify and evaluate liquidity risk. –  Thirdly, work is under way to define various measures to mitigate the procyclicality of the financial system, which was not taken sufficiently into account in the pre-crisis period. Along these lines, the creation of countercyclical capital buffers has been proposed so as to contribute to reducing and not amplifying credit cycles. The aim pursued would be for banks to reinforce their capital during upturns and to be able to use it subsequently in periods of stress. In other areas, measures have been proposed to lessen the tendency of financial market participants to accentuate business cycles by their behaviour. Specifically, a series of criteria have been set for bankers’ pay in order to lessen their incentives to adopt risky, short-termist strategies. These have already been applied in the main developed economies. In the field of accounting regulations, too, significant efforts are being made to strengthen standards.

All these measures for the support and restructuring of the financial system have proven technically correct, they are well adjusted to Spain’s situation, and they were rapidly designed and approved with broad consensus. Certainly, such characteristics should be applied to other areas so needy of reform, such as the rebalancing of public finances and certain labour market institutions. The need for restructuring has been understood by most of the banks that required this to ensure their viability and soundness in the future, and they have reacted by working on various integration processes. In previous talks I explained the criteria used by the legislator for these processes, and which are those that should prevail: the sufficient reduction of capacity, the soundness of the resulting banks and the minimal use of public funds. These should be the goals both of banks themselves and of all the public authorities intervening in the process. BIS Review 51/2010  1  Along with restructuring, my recent speeches on the financial system have focused on a matter I consider, unquestionably, to be the biggest risk hanging over Spanish credit institutions, especially the least diversified ones: mass unemployment. Unless a reform of our labour institutions that tackles this most serious and most Spanish problem with resolve is approved promptly and with the widest possible consensus, many of our credit institutions will suffer the consequences: more bad debts, less business, higher public indebtedness and, consequently, dearer wholesale funding, etc.
Otherwise the financial industry will be unable to fulfil its role as a financial intermediary. A lot has been achieved in recent years to strengthen the resilience of the banking system. In particular, the two big banks have made progress in this area. They have increased their highest-quality capital and reduced their risk-weighted assets. This is an on-going process that will further increase the stability of the system. Challenges for the financial industry Ladies and Gentlemen, so far I have focused on the macroeconomic challenges arising from the importance of the financial industry for the economy. Let me now turn to the challenges the Swiss financial industry itself faces. Obviously, like its peers abroad, the Swiss financial industry has to cope with several challenges. Let me focus on three which I consider to be most relevant for Switzerland – wealth management, residential mortgages and regulatory measures addressing “too big to fail” issues. Wealth management is challenged on several fronts. Revenues in wealth management will continue to be depressed. In jittery financial markets, client trading volumes are low. The flat yield curve reduces the margin between deposits and credits. In addition, competition in private banking with foreign clients will continue to intensify.

Zdeněk Tůma: Education as investment in human capital Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, for the graduation ceremony, The New Anglo-American College, Prague, 20 June 2008. *  *  *  Ladies and gentlemen, dear colleagues, It is my pleasure to be here today and to share with you some thoughts that concern the role of education as an investment in human capital in the long-term development of our economy and society in general. Today it’s commonplace for politicians to swear by concepts like investment in education, knowledge-based economy or the effect of education on long-term economic growth. They are also quick to add something about the necessity to pay for university education, at least those on the right wing of the political spectrum. Don’t worry, we haven’t met today to assess individual political ideas, and we all know that sometimes it’s a long road from what politicians say to what they do. However, the fact that you are sitting here today indicates that viewing education as an investment has its place in today’s society regardless of political preferences. I would like to use this opportunity to point out that although the concept of investment in education may be somewhat misused and can have unfortunate overtones for somebody, it has a rigorous theoretical foundation and is of high empirical relevance.
Prasarn Trairatvorakul: Living with capital flows – an emerging market perspective Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the School of International and Public Affairs, Columbia University and School of Management, Yale University, New Haven, USA, 13–14 April 2015. *  *  *  Ladies and gentlemen, Being amongst and having the opportunity to interact with young scholars such as you is refreshing. These days I spend much of my time in meetings with senior policymakers discussing problems and challenges facing Thailand and the world economy. Many of these challenges are structural, having been accumulated over a long time. They are legacies of past steps and missteps of the generation before us. So it is fitting to be able to speak to you today, as some of you will certainly inherit and have to deal with problems that are being created now, largely inadvertently. I am reminded here of a marketing line by the Swiss watchmaker, Patek Phillipe, which goes something like “You never really own a Patek Philippe. You merely look after it for the next generation.” Let me then take this opportunity on behalf of policymakers the world over to tell you that we mean well and sorry for any troubles that we may pass onto you. The fact is that real-time policymaking is hard. Apart from serious data limitations, the world keeps changing rapidly and our knowledge often does not keep up. Today I will talk about an area where these challenges apply forcefully.

There were few plans for large-scale investment, and they mainly concerned the renewal of modernization of existing equipment. Retail sales contracted in February, after posting a substantial rise in January. Employment levels remained stable in industry, except in the automobile sector, where they declined. The retail and market services sectors showed little change, but employment fell in the building industry. Increasing use was made of flexi-time, annualized working time and part-time working to respond to variations in demand. BIS Review 32/1997
V.  A look into the future  Taking a forward-looking perspective, I am sure that one of the important topics that will be on the ESRB’s agenda is that of the systemically important financial institutions (SIFIs). These institutions are major contributors to what in the financial jargon is known as “systemic risk” and are, therefore, of great interest to macro-prudential supervisors. How to gauge the contribution of a financial institution to systemic risk, in other words how to identify a SIFI, is a very difficult task, not least because of data limitations. Nevertheless, there are a number of factors that seem to be particularly relevant, such as the size of the institution, its interconnectedness with the rest of the financial system and the degree of substitutability in the event of a failure of the critical services they provide. It is clear that any such assessment cannot be exclusively based on a quantitative approach. Rather, the informed judgment of  4  BIS Review 87/2010  the relevant authorities, guided by internationally agreed principles, will play an important role. Indeed, the concept of systemic risk is fuzzy and still under debate, but, with a certain degree of simplification, it can be defined as the risk of an impairment in the financial system that has potentially serious negative consequences for the real economy.

In particular, governments need to foster innovation by providing the right framework to encourage experimentation and risk-taking in new and growing sectors, and to support the transition to new jobs for people working in “sunset” sectors. In parallel, they need to ensure that the conditions are in place to direct investment towards the technologies and sectors of the future. 2/4  BIS central bankers' speeches  This requires sufficient financing. The European Commission estimates that the investment needs for delivering the digital transformation as well as the green transition will be at least € trillion over the next two years.2 But in a number of countries – Italy among them – mobilising investment requires above all a business-friendly economic environment, with efficient and agile public and private services, adequate physical and digital infrastructures, a well-functioning judicial system and a strong financial sector. If such actions are taken, this crisis can engender a period of positive transformation. It offers an opportunity to policymakers to take a decisive step forward towards more inclusive, greener and more digital growth.
They will enhance the transmission of monetary policy, support the provision of credit to the euro area economy and, as a result, provide further monetary policy accommodation. We see early indications that our credit easing package is delivering tangible benefits. Since the beginning of June, forward money market rates have shown steep declines across the maturity spectrum. Now, the forward curve consistently lies below zero over a two-year horizon. EONIA is not expected to exceed 25bps before well into 2018. The 3-month EURIBOR rate, which is an important conduit of monetary policy impulses to lending rates, dropped to all-time lows and now stands close to zero. And the policy decisions, in particular those announced in September, triggered a compression of spreads across other asset classes, including ABS, covered bonds and sovereign bonds. But more time is needed for the full materialisation of the positive effects of the most recent set of measures. In this context, let me emphasise that we are committed to scale the total magnitude of our measures – lending operations as well as outright purchases – up to a size that can deliver the intended support to inflation and the recovery of the euro area economy. All these measures will have a sizeable impact on our balance sheet, which we expect to move towards its early 2012 dimension.

The high level of investment and activity in the oil and gas industry, coupled with the general boom, continues to generate strong growth impulses to the region. Growth is broad-based and there are good prospects of continued growth in the next few months. BIS Review 34/2007  3  A good half of the enterprises report difficulties in accommodating demand growth. This is a little lower than in the previous round. Capacity remains tight in manufacturing supplying the petroleum industry, building and construction and business services. The investment level is expected to rise in all industries. Profitability varies somewhat between sectors. It is solid in the supplier and export industries, retail trade and services, and stable in building and construction and manufacturing supplying the domestic market. Employment has risen in all industries in Hordaland and Rogaland over the past three months. Employment has increased over several years in the business sector. In recent months, employment growth in the public sector has also picked up. Unemployment in the region is now a little lower than 2 per cent, which is lower than the average for Norway as a whole. Unemployment began to fall earlier in this region than in the country as a whole. Demand for labour is expected to increase in manufacturing and services in the next three months. In other industries, employment is expected to be relatively stable. The tight labour market is reflected in continued high wage growth. Capacity utilisation in the Norwegian economy is expected to remain high through 2007.
Chile) External prices (in $  -4.2 3.3 3.4 3.0 2.6 6.9 2.0 -0.4 -9.8  1.9 2.8 3.0 2.3 1.6 6.7 1.7 -1.8 -2.7  LME copper price $ WTI oil price $ Brent oil price $ Gasoline parity price $ Libor $ (nominal, 90 days)  249 49 52 467 0.3  221 43 44 389 0.7  2017 (f) 2018 (f) Jun'17 Mar'17 Jun'17 Mar'17 Jun'17 Report Report Report Report Report (annual change, percent) 1.9 4.6 4.7 -0.5 -0.5 2.9 3.3 3.3 3.5 3.4 3.1 3.4 3.4 3.5 3.5 2.5 2.8 2.8 2.9 2.9 1.6 2.3 2.2 2.3 2.3 6.7 6.4 6.5 6.2 6.3 1.7 1.7 1.7 1.7 1.7 -1.5 1.3 1.1 2.5 2.2 -2.7 2.1 2.4 1.3 1.4 (levels) 221 255 255 250 250 43 50 50 50 51 44 52 53 52 53 389 457 453 444 447 0.7 1.5 1.5 2.4 2.5  (f) Forecast. Source: Central Bank of Chile. Figure 10  MPR and expectations (percent)  6  6  4  Financial asset prices in March Report (*)  MPR  FBS Financial asset prices in June Report (*)  2  4  EES 2  -  0 14  15  16  17  18  19  (*) Built using interest rates of swap contracts up to 10 years. Source: Central Bank of Chile.

Our latest economic modelling suggests that reaching net zero, if the transition is managed well, might have a small or negligible effect on economic aggregates such as GDP, unemployment and inflation [figure 7]. Indeed depending on what investment means for productivity, there is a chance the transition could prove positive overall. However, these costs depend crucially on whether the transition follows an orderly or disorderly path. Emission reductions may not follow a straight line as shown in many scenarios. It takes time for policy to work and policy adjustments will also be needed along the way. There may be higher investment uncertainty. Markets will not allocate capital perfectly, and without certainty about policy and technological outcomes, there may be bumps in the road as they absorb news about our path. In the NGFS we explicitly capture some of these transmission channels in our disorderly scenarios, for example by modelling delays in policy action and policy fragmentation across countries and sectors. They result in much higher impacts, particularly in countries with greater dependence on fossil fuel consumption or exports. This work underlines that central banks and supervisors, and the financial firms and system that we oversee, need to be prepared for a range of outcomes. But it also underlines that early action brings lower risks. 7  Preliminary analysis for the updated NGFS Climate Scenarios. Third, the impacts from physical risks will be significant.