samchain/econo-pairs-v1 huggingface dataset:
Unemployment has fallen back, in Europe too. In parallel with this, longer-term structural developments have changed the economic landscape. A more closely integrated world economy and technological changes are transforming aspects of everyday life and also have consequences for economic policy. Trade and technology Trade and technology have been key driving forces of growth in Norway over the past two hundred years. Oil and gas resources have provided a substantial boost to our income level, but even more important is the efficient use of our labour and capital. Technological advances, increased education and better capital equipment have made us more productive. Contact with other countries has helped us get more out of our common resources. Many innovations have come from abroad, where we have also found markets for our own products. Over the past fifty years, global trade has more than doubled as a share of global GDP (Chart 2). The scaling back of trade barriers has been an important driving force. Since 2011, trade has expanded at a slower pace, primarily reflecting lower growth in the world economy. Private investment in particular has lagged, but growth has also slowed because trade barriers are being reduced more slowly than earlier. 1)  Chart 2 Global trade as a share of GDP.

You should be the flag bearers of Excellence and a source of inspiration to your colleagues. In addition to congratulating you the awardees, I want to congratulate the parents and schools that have contributed to the excellent results which qualified our awardees for the awards today. I speak especially about the parents of Ms. Rashidatu Caulker and Mr. Bobson Sesay and the Annie Walsh Memorial Secondary School, and the St. Augustine Secondary School Lungi, the proud producers of our awardees. To all the students present here this afternoon, , we implore you to have confidence in your abilities, and know that what Rashidatu and Bobson have achieved today you can also achieve. Please note that the Bank of Sierra Leone Charity Trust Fund was established to support any of you who can demonstrate proven ability. Let this therefore be a challenge to all of you to excel in your studies. Who knows, you might one day be a proud beneficiary!! Mr Chairman, Distinguished Ladies, Gentlemen and students, let me assure you that the Bank of Sierra Leone has a long term commitment to providing support, especially in building capacity nation-wide through education. Be assured that we will continue to uphold the objectives and tenets of the Bank of Sierra Leone Charity Trust Fund on a sustainable basis. All we ask for is your continued support. I thank you for your attention. BIS Review 32/2008  3
However, from a historical point of view, it is only when technological advances have made a general impact on the production process that productivity gains will arise. The steam engine moved production from household to factory, the railway enabled wider markets to develop and electricity brought the conveyer belt. Computers and the internet enable a more effective flow of information at almost all stages; financing, projection, follow-up, stock management, procurement, negotiation, auction, verification, invoicing, auditing, requisitioning and distribution. Furthermore, the improved access to information contributes to a reduction in the risks when outsourcing parts of the company’s operations. More efficient markets - the “naked economy” Increased access to information means that the markets - the matching processes between buyers and sellers - also become more efficient. Some people therefore call the new economy the “naked economy”. We can use the internet to search for products and compare prices, which brings down transaction costs and new companies find it easier to get into the market. A good example of this is how the matching process on the labour market is facilitated by information technology. In the USA around 80% of personnel managers are said to use the internet and one of the largest employment agencies on the internet advertises more than one million jobs.1 Four hundred of the world’s 500 largest companies use web sites in their recruitment process. These internet employment agencies probably reduce the search costs and facilitate the matching process - reducing what is known as friction unemployment.

There is even an element of “new economy” in the deregulation of the telecommunications and electricity markets. Firstly, it would not have been so easy to implement the deregulation without the aid of the new technology. Secondly, the deregulation might not have had the same impact without, for instance, the information provided on the internet, which helped consumers in making a choice. 7  BIS Review 89/2000  All in all, I can allow myself to make a qualified guess on some areas, without knowing for certain: 1. Productivity, total factor productivity, has risen considerably in Sweden during the latter half of the 1990s. The emergence of information technology has probably been significant in this. 2. The effects will continue to be felt for a number of years, probably beyond the monetary policy horizon, for which reason the Riksbank will continue to monitor the IT phenomenon in future. 3. Deregulation and increased competition play a special role in Sweden, particularly as they have run parallel to IT developments. At the same time, there is reason to point out that the “new economy” does not constitute a guarantee for a stable and positive development in asset prices, either in the USA or Sweden. On the contrary, history shows that rapid technological changes often lead to speculative bubbles.
That all shows how important it is for the economy to have flexible price- and wagesetting mechanisms. And there is a general need to reinforce the capacity of the productive system to compete, through improvements in specialisation, efficiency and higher productivity gains. As earlier indicated, the growing mismatch between household and corporate expenditure and income last year has been accompanied by fresh increases in these sectors' debt. What has proven conducive to this has been the maintenance of financial conditions which have continued to be markedly loose for the situation of strong demand pressure in the economy. This growth in household and corporate liabilities is naturally bearing on the financial position and burden of both sectors. The financial pressure borne by households has, however, been alleviated by the increase in their net wealth, sustained by the growth of stock market prices and, above all, of house prices. In the case of companies, the notable increase in profits has strengthened the sector's capacity to withstand the increase in their financial commitments. Accordingly, the financial position of both sectors, considered overall, remains sound and does not therefore pose a serious obstacle to the continuity of the economic upturn currently in train. The foregoing should not, however, conceal the evident fact that the expansion of domestic spending, particularly in the case of households, will not be able to base itself for much longer on growth in debt at rates such as those currently seen.

Whereas the expansionary stance of fiscal policies scarcely altered in the main developed countries, where public debt continued on a rising trend, the accommodative stance of monetary policies (though, overall, they also helped sustain growth in 2005) was gradually toned down. The main central banks – especially in the United States and, to a lesser extent, in the euro area – progressively raised interest rates and withdrew the unusual monetary stimulus of the previous years. This pattern will possibly also extend to Japan this year, making it likely that, for the first time in 15 years, there will be a phase of monetary policy tightening in the three major developed areas. In this respect, I should stress that the gradualness of the decisions adopted and central banks' clarity in transmitting them have steered financial market expectations, which has been conducive to their stability and has cushioned the impact of these measures on world growth. But beyond the generally still-expansionary stance of macroeconomic policies, I believe a significant factor that helps explain the buoyancy of the world economy in recent years is the broadly generous financial conditions that most countries have faced. Real and nominal interest rates at various terms, financial and real-estate asset prices and risk premia have, in general, held at very favourable levels for consumption and investment. In turn, the favourable expectations of economic growth, in a setting of abundant liquidity, fed into rising stock market trends and the reduction in risk premia on corporate and emerging-market debt.
We must avoid a self-reinforcing decline in output and employment and hence a decline that is more pronounced than necessary. But an increase in the spending of petroleum revenues should primarily be used to finance temporary measures that are easy to reverse. Fiscal policy must also take into consideration that lower oil prices will reduce the government’s spending capacity in the longer term. In recent years, we have sold large volumes of oil and gas at good prices. The transfers to the government’s savings account have been substantial. The picture is now quite different. If oil prices remain at today’s level, government revenues will fall sharply. The present value of future income can in that case be estimated at a fourth of today’s oil fund, the Government  BIS central bankers’ speeches  9  Pension Fund Global (GPFG). 6 That means that most of the government’s petroleum wealth may already have been deposited in the GPFG. The year 2015 may stand as the last year of net transfers to the GPFG. Already when the budget for 2016 was presented, there were prospects that the spending of oil revenues would exceed actual income from petroleum activities. 6  10  The estimate is based on impact calculations in the National Budget for 2016 (page 31) based on a long-term oil price of NOK 400 per barrel at constant 2016 NOK.

Norwegian banks have made good use of the solid earnings and low loan losses of recent years. Banks have built up their capital and adapted to new buffer requirements. The buffers can be used in the event of a pronounced economic downturn. Banks will then be able to absorb loan losses without a significant reduction in new lending. The build-up of financial imbalances can be difficult to identify. Financial crises can occur suddenly and unexpectedly. When they do occur, the banking system must be solid. Most regulatory components should be as stable as possible. The aim of macroprudential supervision cannot be to fine-tune the economy over the business cycle. But when financial turbulence occurs, the authorities must be prepared to act quickly and in concert. In Norway, the Ministry of Finance has the overriding responsibility for macroprudential supervision. It is natural that the political authorities make decisions regarding the framework and permanent regulations. It would be an advantage to delegate the responsibility for timevarying instruments to an independent authority with a view to ensuring effective implementation and predictability over time. Conclusion After two decades that can be described as a golden age, the Norwegian economy is heading for a demanding period. We have always known that the long oil-driven expansion would come to an end, either because the activity level would pass the peak, or because oil prices would fall. We have now reached that juncture. The challenges are twofold.
28 The original Bretton Woods system was established after WWII and consisted in a formal commitment of its participant countries to maintain foreign exchange rates, determined against a gold parity, at a specific level, with acceptable deviations not exceeding 1 percent. The system ceased to exist in 1971, after president Nixon had taken a decision that the US would no longer exchange dollars for gold according to the parity determined. The nature of the reactivated Bretton Woods, often called Bretton Woods 2, is well conveyed in the motto used by the authors of this concept: “(…) if I had an agreement with my tailor that whatever money I pay him returns to me on the very same day as a loan, I would have no objection at all to ordering more suits from him” (Jacques Rueff, 1965, after Dooley et al. (2003). 27  Taking into account the fact that China has already used USD 60 billion of its foreign exchange reserves for capital injections to two commercial banks, the People’s Bank of China has a level of reserves that exceeds USD 900 billion. 28  A series of articles on the topic was commenced with the work of M.Dooley, D.Folkerts-Landau and P.Garber „An Essay on the Revived Bretton Woods System“, NBER Working Paper 9971, September 2003.

In the discussion over the correct relation of economic policy to the bubbles building up on the asset market, there is a dominant conviction that the supervisory policy is a much better response. For this very reason, supervision over financial markets should be independent of politicians, as it may turn out necessary to take up actions aimed at limiting the rate of building up of the speculative bubble at a time when it is not convenient for politicians, considering the elections cycle. New challenges for regulators/supervisors Globalization of financial markets changes the operation conditions of financial institutions by opening new development opportunities for them, but also by creating new types of risk for the stability of the financial systems. Globalization creates new opportunities in the area of risk management, including but not limited to the most important banking risk, i.e. the credit risk. Development of new risk transfer instruments (credit derivatives and securitisation) and increase in the number of their purchasers enable more effective use of banks’ capital. New instruments, however, pose some threats. 40 Both market participants and markets supervisors indicate the issues of progressive complexity of derivatives, and difficulties in complete understanding and estimating the risk related thereto. 41 Difficulty in evaluating risk flow directions and lack of basic data on some unregulated financial institutions, which are becoming increasingly active on the derivatives market, are also a problem. What I mean here are in particular the hedge funds, which manage increasing funds.
FT: And that would have put the single market at risk? Trichet: And that would have put the single market at risk, sure. Not only have the central banks had to cope with exceptional situations. Governments were called upon to take action in various forms, and the fact that Europe is a union of sovereign states means that a lot of decisions implying taxpayers’ money or risks to taxpayers are taken at the level of governments and parliaments. Hence there is a constant need to ensure that we maintain the single market and its level playing-field, and that we do not re-nationalise segments of the market. This is a big challenge at the level of the institutional framework of Europe, but it has been done well so far. FT: In the past, some warned that the first test for the euro would also perhaps put intolerable strains on the currency union, and some academics even suggested it would fall apart. This has not happened, but are you worried about some member states in the currency union that are facing greater challenges, say, than others? Trichet: Europe’s institutional framework is solid, and it has proved its solidity. The euro itself has functioned, by and large, as a protection against these intense international challenges. On the other hand it is clear that each economy has to be run as properly as possible. We are in a market system that punishes those who behave improperly.

This is explained by the fact that we are supplying liquidity on an unlimited basis and that we have allowed collateral in a way which is more forthcoming. And this is true for all central banks. But for us, our weekly balance sheet in comparison with that of one year ago has increased by around 55 % [from around 1.3 trillion to 2 trillion euro]. Of course, this increase does not imply an increase in net liquidity, because a significant part of the liquidity we provide comes back in the central bank through the deposit facility. FT: That’s less than the Fed. Trichet: Yes, true. For the ECB part of it comes also from the fact that we have the counterparts of the dollar that we are supplying ourselves, and a counterpart of the dollar is our own collateral. The central banks are in a situation where they are playing a much more quantitative role than they used to play, and it is true for all of us. FT: Should there be more centralised supervision within the Eurozone, and should the ECB take responsibility? Is the ECB willing to take that responsibility if the politicians so desire? 6  BIS Review 159/2008  Trichet: As you know, we have always been in favour of a very close relationship between the central bank and the banking surveillance authorities. We said that long, long before any new problems, any new difficulties. We had a Governing Council position close to the start of the ECB, which we made public.
Employment in the private sector has been increasing modestly, with some notable pockets of relatively brisk job creation in leisure and hospitality, professional and business services and private education and health services – employment in each of these sectors now far exceeds its prerecession levels. Cutbacks in government employment, however, have largely offset the private-sector gains realized over the past few years. 2  BIS central bankers’ speeches  Low labor force participation rates and high unemployment rates remain perhaps the biggest challenges to the Puerto Rico economy. Our earlier report cited low labor force participation among younger and less educated workers as one important factor limiting the Island’s competitiveness. Since that report, overall labor force participation has continued to decline. The unemployment rate on the Island has consistently exceeded the rate on the mainland by several percentage points. Although the rate has fallen by more than a full percentage point year to date, the gap with the mainland remains wide. Moreover, poor labor market opportunities for many workers have contributed to a significant increase in the rate of outmigration of Puerto Rico’s residents, accelerating the Island’s population decline. The prolonged period of weak economic growth has compounded Puerto Rico’s fiscal problems: Puerto Rico’s public sector debt has been on an upward trend for a decade. The stagnation of the economy and persistent fiscal deficits underlie this debt buildup.

An independent regulator for utilities is the norm throughout mainland states. By leveraging the expertise and reputation of existing independent regulatory agencies, Puerto Rico may improve the efficiency of its public corporations while reassuring investors. As a fifth step, the Commonwealth could benefit from adopting fiscal institutions more like mainland states. Balanced budget rules are far from perfect, but by following the states’ model – splitting the budget into an operating piece that must be balanced and a capital piece that can be financed with debt – Puerto Rico could better align financing methods with its spending priorities. A sixth step is for the Commonwealth to implement a framework to help ensure that budget targets are met. A key aspect of such a framework would require that the authorities implement multi-year budgeting, in which revenue and expenditure plans are articulated over a three to five year horizon. Such a framework should also incorporate a review of the central government’s macroeconomic and fiscal forecasts by a non-partisan independent entity, the views and analysis of which could be published in coordination with the Commonwealth’s proposed budget for any given fiscal year. New York City, for instance, uses this type of framework. The steps should be viewed as potential ways to improve Puerto Rico’s finances over time and I present them to you for consideration and discussion. The decisions are obviously up to you. Other countries, U.S. mainland states and municipalities facing similar fiscal issues have been able to overcome them.
On 17 September, American International Group (AIG), the largest US insurance company, had to rely on an emergency loan from the Federal Reserve. The company played a key role in the credit default insurance market. The financial crisis has heightened in several European countries. Banks in Belgium, Denmark, France, the Netherlands, the UK, Sweden and Germany have been taken over by the government or other financial institutions. In Iceland, the authorities took over the three largest banks and are now unwinding their international operations. The crisis at these banks prompted a flight from Iceland’s national currency which, combined with a property market crash, has triggered a sharp recession. In Norway, the effects of the financial crisis have also occurred more rapidly and become more pronounced than the outlook seemed to imply only recently. Norway is still in a better position than most countries. Capacity utilisation in the Norwegian economy has been very high. The surplus on current account is considerable and government finances are solid. Norwegian banks have limited exposures to international securities. They have suffered only small losses and recorded solid earnings in recent years. Furthermore, the Norwegian banking system is not large relative to the size of the Norwegian economy. In response to the uncertain environment, banks abroad and at home are reluctant to lend to each other and are tightening their credit standards. Credit channels are drying up. Money market rates have increased markedly, and to levels substantially higher than central bank key rates.

The fall in terms of trade may nevertheless imply that the krone exchange rate does not return to previous heights. A weaker krone may contribute to underpinning profitability in the export sector. Cost competitiveness in manufacturing has improved in recent quarters. Effects on output, employment and inflation The financial turbulence has weakened the outlook for investment and consumption in many regions of the world. Against the backdrop of losses and structural changes in the financial sector, many large financial institutions will for a long period ahead seek to increase their interest rate margins, reduce lending and risk. Lending standards have been tightened, particularly in the US and the UK, but also in the euro area. Output has fallen in the US, the euro area and the UK, and growth may be negative in the coming quarters. In emerging economies, the cyclical downturn has also come into growing evidence. In several countries, economic growth is being pulled down by both lower market growth in other countries and reduced access to credit. Monetary policy in Norway is oriented towards annual consumer price inflation of close to 2.5 per cent over time. In recent years, inflation has on average been somewhat lower, but fairly close to 2.5 per cent. Low and stable inflation is the most important contribution monetary policy can make to sound economic developments, providing firms and households with an anchor for inflation expectations.