samchain/econo-pairs-v1 huggingface dataset:
The question arises to what extent this expansion in the money supply has an inflationary effect. First, let it be said that we are deliberately conducting an expansionary policy. That partly explains the above-average money supply growth. It also must be noted, however, that the painful experiences investors have made on the stock markets and the uncertain economic situation have significantly heightened the preference for liquidity. A look at credit statistics confirms that the money supply did not grow as a result of credit creation and therefore does not serve to finance any existing demand for goods. Moreover, our economy currently has free capacities so that increased demand will not immediately push up prices. We are therefore convinced that we have sufficient time at our disposal to keep inflation within the bounds of price stability by tightening monetary policy at a later point in time. I should like to emphasise once more that in the present situation other efforts are needed besides an expansionary monetary policy in order to maintain or to enhance the attractiveness of Switzerland as an industrial and business centre. Such efforts include a further liberalisation of the domestic economy, an increase in competitiveness in the structurally weak sectors, and sound public finances. Adjustment of the monetary policy concept of the ECB A few weeks ago, the European Central Bank (ECB) finalised a monetary policy assessment and slightly adjusted its monetary policy concept.

Furthermore, the euro area also has the problem that there is a large spread in inflation between the peripheral countries and the countries at the centre. In striving for an inflation rate of less than, but close to, 2% in the medium term in the entire euro area, the ECB is trying to prevent inflation in the central countries from being pushed down towards zero, or even below zero, for any length of time. In Switzerland, this problem does not exist as only inflation measured in Switzerland is relevant for our monetary policy. BIS Review 27/2003  3  Additional agreement between the Federal Department of Finance and the SNB on the distribution of profits on the free assets At yesterday’s meeting the Bank Council of the National Bank agreed to an additional agreement between the Federal Department of Finance and the Swiss National Bank on the distribution of profits on the free assets (income on reinvested proceeds from gold sales). The profit distribution of the National Bank will thus increase by Sfr 300 million to a total of Sfr 2.8 billion (for the financial year 2003) in spring 2004. In 2005 and 2006, it will be gradually raised up to Sfr 3 billion. The National Bank’s profit distribution has so far not taken account of this income on reinvested gold proceeds.
Capital may be slower to move but even the labour market doesn’t clear immediately and some of those losing their jobs in the low-demand sector would probably spend some time being unemployed before finding new jobs in the high-demand sector. Note too that the demand shifts would have to be quite big to have any material or noticeable effect. Because the curved and straight lines have the same slope to start with, small shifts don’t do that much to average costs in the economy6,7. Indeed, in the real world, recognising that demand can move around unpredictably, firms generally operate with a margin of spare capacity, precisely so they’re able to meet any sudden rise in orders without incurring undue extra costs. This serves to flatten out the cost curve a bit. 6  Students of economics will recognise this as an example of something called the “envelope theorem”. Around an optimum – in this case an optimal amount of capital – changes in the environment have only second-order effects on decisions. 7 Clearly the effects could be higher if the economy isn’t starting from an allocative optimum to begin with. There is quite a bit of work in the economics literature exploring the effect of allocative inefficiencies on aggregate productivity, even in standard business cycles. See, for example, Davis and Haltiwanger (1998), Chari et al. (2007) and Osotimehin (2019). 12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12  But on occasion sizeable shifts do happen.

And even if this mechanism has been at work, it’s not clear it has important implications for inflationary pressure over the medium term, which is the focus for monetary policy. It’s reasonable to expect the degree of dispersion  Sources: ONS and Bank calculations. in demand and spare capacity to narrow as and when aggregate spending recovers (those areas most affected by the pandemic are likely to see stronger growth afterwards). To the extent shifts in consumption do persist – some have speculated, for example, that a higher proportion of people will work from home in future, with possible implications for the pattern of spending over the longer term – one would expect the economy to adapt to those over time. But alongside other possibilities that the MPC described in the August Monetary Policy Report, the significant dispersion in demand might be one other thing that’s effectively served to flatten the price Phillips curve (i.e. to temper the response of inflation to shifts in aggregate spending), if only in the shorter term10. Conclusion  The pandemic, and the waves of the restrictions that have accompanied it, have had highly selective effects. They’ve hit some areas of spending much harder than others. The decline in aggregate consumer spending would almost certainly have been more protracted and more widespread – affecting not just activities that involve infection risk but those that do not – but for the furlough schemes. These have helped shield household incomes from the big drop in national income last year.
Trade restrictions were eliminated and the Turkish currency was made fully convertible. There were also notable changes on the domestic financial market infrastructure. For the monetary policy to be effective what is needed is the existence of well-developed financial markets. For this purpose the Central Bank played a leading role in the creation of domestic money, foreign exchange and government bond markets. To further strengthen the financial markets infrastructure the Central Bank established a well-functioning electronic payments and securities settlement system. Contrary to these developments, the performance of the Turkish economy in terms of inflation and growth was not satisfactory. Aside from short-lived periods of relative stability, loose fiscal policies along with accommodative monetary policies were the main causes of high inflation. Under these circumstances backward indexation became a common practice in pricing behavior; inertia evolved in inflation, which was very difficult to eliminate. As inflation increased, inflation expectations also increased and a self-nurturing inflation cycle began. In the meantime, there were number of attempts to get out of this impasse. First, there was a monetary program introduced in 1990. This was very important in that it reorganized and re-structured the Central Bank balance sheet and explained to the financial community and to the general public how the monetary policy operated. It was the first time when certain monetary concepts like base money or central bank money were brought to the attention of the public. However external developments like the first Gulf war brought this program to an end.

In 2016 we want to see that this project has produced three high quality books on The History of Norges Bank 1816-2016, The Monetary History of Norway 1816-2016 and on selected Topics in Central Banking in an international historical perspective. The aim of the workshop is to bring together international experts from central banks and academia for informal discussions and an exchange on topics related to the writing of central bank and monetary history. We expect discussions to be active and lively and we want this workshop to kick-start research activities in these important areas. I want to thank the Graduate Institute here in Geneva and Professor Marc Flandreau in particular for their hospitality and for allowing us to spend almost two days discussing research in central bank and monetary history. Previous books about the history of Norges Bank have been written in Norwegian, and predominantly by previous central bank governors. But “the times they are a-changin”, to  BIS Review 131/2008  1  phrase Bob Dylan (Dylan, 1964), 1 and today we believe that best practice in writing central bank and monetary history is achieved by contributions from professional academic experts in relevant areas. The research should be brought up to international quality standards through the usual peer review process.
Koh Yong Guan: Risk management development in Singapore Opening address by Mr Koh Yong Guan, Managing Director of the Monetary Authority of Singapore, at the first MAS Risk Conference, Singapore, 31 January 2002. *  *  *  Ladies and Gentlemen  Introduction It is my pleasure to address the first MAS Risk Conference. I will cover two areas : •  First, the changing financial landscape and the challenges they pose for risk management; and  •  Second, the introduction of three risk management initiatives. Changing Financial Landscape and Challenges Over the last few years, there has been a fundamental change in the volatility of financial markets. The frequency and the contagion effects of crises affecting financial markets have also risen. The volatility of financial markets has increased. The lowering of regulatory barriers to capital flows has integrated global financial markets. This has increased the correlation and the transmission of volatility from one financial market to the next. As a result, the diversification benefits derived from investing in several markets have dissipated, leaving market participants exposed to greater financial risks than before. The emergence of complex derivative instruments has increased market liquidity, but also financial risk for those who are not well acquainted with the use of these instruments. While these new instruments have allowed market participants to transfer their credit risks and enhanced the efficient pricing of such risks, the use of derivatives for speculative purposes can result in large losses.

Furthermore, securitisation in Spain has mainly been used as a financing tool, to raise resources on the wholesale financing markets in order to meet the demand for loans from households and businesses. Since the element of credit risk transfer was limited, Spanish banks have had little incentive to issue overly complex financial instruments. Furthermore, we have always required capital to be held against liquidity enhancements to securitizations, which we consider may have significant credit risk. Let me take this opportunity to make a brief observation on the securitisation sector, which some have described as being in “dire straits”. I am sure that this sector will ultimately recover. But to do so, it must distinguish between traditional products that are sound,  2  BIS Review 70/2008  transparent, standard and easy-to-value, and “multi-layer” securitisations and complex structured products which are difficult to understand and assess. The good news is that the market is starting to differentiate between products. An example of this is the recent placement of several Spanish banks’ issues of simple covered bonds. In short, our recent experience shows that to be successful supervisors we need to combine an open attitude to financial innovation whilst keeping at the same time some good old fashioned supervisory suspicion towards it, especially when it entails overwhelming complexity or elements of regulatory arbitrage. The Spanish banking system has faced the recent turmoil from a well-capitalized, profitable and efficient position. However, there is no room for complacency.
First, the leverage ratio includes exposure arising from potential future exposure on derivatives. However, initial margin posted by clients is not recognised as reducing exposures by the leverage ratio calculation. Second, if it appears on the clearing member’s balance sheet, client margin increases the leverage ratio exposure. Thus, providing client clearing services means devoting a significant amount of leveraged balance sheet to the activity. Since client clearing is a relatively low profit-margin business, many industry participants argue that the leverage ratio is having a negative impact on clearing and is thus undermining the aim of the G20 reforms. 33  Acosta-Smith, Ferrara and Rodrigez-Tous (2018), analyse empirically the impact the leverage ratio has had on client clearing in the UK. Using detailed data on interest rate derivative transactions and clearing members’ balance sheets, the authors study the impact of two ‘leverage ratio events’: the introduction of the leverage ratio as a mandatory requirement in the UK in January 2016; and the subsequent change in the leverage ratio disclosure requirements in January 2017 to address window 32  Acosta-Smith, Ferrara, Rodriguez-Tous (2018), ‘The impact of the leverage ratio on client clearing’, Bank of England Staff Working Paper No.735, https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2018/the-impact-of-the-leverage-ratio-on-clientclearing.pdf?la=en&hash=EE95D4D26969019C3E984DFB3E564B58E5C1AC93. 33 For example, https://fia.org/articles/fia-analysis-leverage-ratio-proposals-will-negatively-impact-client-clearing. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  dressing (see above), which effectively made the requirement more stringent.

Following the implementation of inflation targeting, the report will be published quarterly; - a model calibrated by the Bank’s staff is currently being tested and will be used for forecasting purposes. Instead of going into the details related to the Inflation Targeting framework, I will let my fellow speakers tackle the most important issues. Shortly after this, Deputy Governor Ms. Rachel Lomax will present a compelling account of UK’s experience and, may I add, success as a benchmark inflation targeter. After the lunch break, Gill Hammond, Deputy Director of CCBS, will give you an excellent presentation dealing with specific issues and challenges faced by emerging market economies when adopting inflation targeting. Later on, we will have our guests from the Czech National Bank and the National Bank of Hungary giving you a purposeful insight of such challenges and of their countries’ experiences with the IT framework. Mr. Ludek Niedermayer, Deputy Governor of the Czech National Bank, will first explain to you “why and how” inflation targeting was adopted in the Czech Republic – the first country to embrace this regime in our region. Then, it will be for Ms Csermely Agnes, Director with the National Bank of Hungary, to share with us the “Lessons and Challenges” put forth by the Hungarian experience with inflation targeting.
It is a massive improvement, and one which has earned the UK a good deal of respect on the international stage, as judged by the Article IV reports from the IMF and the convergence reports of the European Union. Shortly after Robert Rubin announced last week his impending departure as US Treasury Secretary, he gave the Commencement Address at New York University. In it he stated the four principles for decision-making that had guided him during his career. They encapsulate exactly 2  Shiller, R, “Why do people dislike inflation?” NBER Working Paper No.5539, April 1996  9  BIS Review 63/1999  the philosophy of the MPC. First, the only certainty is that there is no certainty. Second, every decision is a matter of weighing probabilities, or the balance of risks, as we say. Third, despite uncertainty we have to decide and act. Fourth, decisions should be judged not only on the results but also on how they were made. The first three principles guide every meeting of the MPC. And the fourth is one I commend to all those who wish to make their own judgment about the MPC two years on. Institutions matter. The Bank of England is an old institution. But its success has been based on its willingness to change and adapt. In its 300-year history, probably no change has been as significant as operational independence and the creation of the Monetary Policy Committee. The Bank aims to be at the forefront of the theory and practice of monetary policy.

It has also shown a striking positive relationship with growth in GDP per head: for  19  For example, the models of Solow-Swann model (Solow (1956) and Swann (1956)) and Ramsey-CassKoopmans (Ramsey (1929), Cass (1965), Koopmans (1965)). 20  See, for example, Eichengreen (2014). 21  These are taken from Clark (2009) for the period up until 1750 and based on Bank estimates in the subsequent period. 4  BIS central bankers’ speeches  every £ rise in the capital stock per head since 1850, GDP per head has risen by £ per head. This, too, is just as Neo-Classical growth theory would predict. That same pattern is replicated across countries. Chart 6 plots the relationship between the capital stock and GDP per head since 1980 in a cross-section of countries. Clearly, countries are on different steps on the growth escalator. But in each case this escalator has moved relentlessly upward, with sustained rises in the capital stock associated with secular rises in per capita incomes. Yesterday’s investment has been today’s growth. Sociological roots of industrial revolution If this were the whole story of three industrial revolutions, the growth recipe would be simple. Growth, like surfing, would mean simply waiting for the next big innovation wave to break. Rising living standards would be not so much natural as preternatural, “suspended between the mundane and the miraculous”. 22 Because policymakers cannot part the waves or perform other miracles, public policy would have a minimal role.
As a macroeconomist whose work is grounded in thorough analysis, and a profound knowledge of models and data, he also takes into account the policy implications of the findings of his research. This is an important factor as he is a pioneer who has done groundbreaking work, and his research frequently encourages others. In this respect his work on the global decline in labour’s share of income has prompted a number of papers from academia and different institutions so as to understand this change over time and its implications for income distribution and productivity. Similarly, his work on capital allocation and productivity in Southern Europe has been widely influential. Mr. Karabarbounis, congratulations on my behalf and on that of the Banco de España. 2

Svante Öberg: Sweden – a low inflation economy Speech by Mr Svante Öberg, Deputy Governor of the Sveriges Riksbank, at Stockholm University, Stockholm, 21 March 2006. Diagrams for the speech can be found on the Sveriges Riksbank’s website. * * * Introduction I shall begin by thanking you for the invitation. It is always a pleasure to come back to Stockholm University, where I myself was a student. I have worked with economics for most of my professional life. Prior to taking up my post at the Riksbank I had, for instance, been under-secretary of state at the Ministry of Finance, Director General of the National Institute of Economic Research and adviser at the International Monetary Fund (IMF) in Washington. I intend to use the experience this has given me to provide a long-term perspective to the current economic situation. My theory for the day is that "Things are better now". I shall cover the following areas in my speech: The first part will deal with the Swedish economy in a slightly longer term perspective going back to the 1960s. There I shall discuss some episodes during the past 30 years that have coloured my perception of the Swedish economy and of what is important for monetary policy. The second part will deal with the current economic situation and current monetary policy. Swedish economy 1960-2005 I shall begin with a description of the Swedish economy during the period 1960-2005 and start with a picture of inflation in Sweden and Germany during this period.
2  Rogoff, K (2003), ‘Globalization and global disinflation’, paper prepared for the Federal Reserve Bank of Kansas City conference on ‘Monetary Policy and Uncertainty: Adapting to a changing economy’. BIS Review 11/2004  1  track record of success, built up over more than a decade, has progressively reinforced the credibility of these targets. As a result, people and firms have increasingly come to expect inflation to stay close the official target - a belief which itself helps to keep it there. Clearly the world has changed. For sure, there is still much we do not understand both about the ebbing of global inflationary pressures over the past decade and about the impact of low inflation on the way that people behave. And there have been crises, such as the stock market crash and September 11. By past standards, though, modern monetary policy is a less melodramatic affair. Has policy making become easier? I don’t think so, though I suspect it looks that way. But let met give a fuller answer by setting out how the present approach to setting interest rates works; and outlining some of today’s challenges. The policy framework I’ll start with inflation targeting, as it has been implemented in the UK since 1997. The institutional framework is set out in some detail in the 1998 Bank of England Act. This is extremely clear both about the aims of monetary policy and about the respective roles of the Government and the Bank.

That’s the most pessimistic view. I don’t take that view, I think it’s extreme. Indeed, after our communication at the last Governing Council meeting in Malta, you have seen that inflation expectations, five-years-five-years, have recovered – which is not the case for oil prices. It’s not a “normal” recession followed by a “normal” recovery. We have a cyclical recovery, but recently we have additional downside risks to our scenario unfortunately. Is there a point at which the ECB’s assessment of risks to the economy starts to actually erode confidence? We say clearly that we have a cyclical recovery, which is moderate. The investment cycle is quite weak still. We know the recovery is fragile. There are a number of geopolitical issues that weigh on confidence in general. This fragility is a fact of the environment. I think what is different about the recovery is that this is the aftermath of what some have called a balancesheet recession, and that starts to be better understood now. It’s a stock adjustment, there are legacy problems which our societies have big difficulties in addressing. You have still in a number of countries non-performing loans weighing on the balance sheets of a number of financial institutions. We also see that insufficient changes in the way that European institutions function have been weighing on the recovery. What do we still need in terms of European reform? We have gone a big part of the way with the banking union, but there the last miles are very important.