samchain/econo-pairs-v1 huggingface dataset:
The base case outlook is looking good, but various uncertainties continue to loom large. Therefore, we can afford to be flexible and wait for the data to guide our approach. In that context, the FOMC decided to keep interest rates where they were at the most recent meeting, and noted the importance of patience in determining future policy actions. To use a nautical metaphor, guiding the U.S. economy is like steering a large ship. Monetary policy decisions can leave a wake several miles long, with implications that reach far into the future. We’ll consider the full range of data, the headline statistics, the market indicators, and we’ll listen to our business contacts on the ground, as we aim to keep the economy on its current course of a strong labor market, sustainable growth, and 2 percent inflation. Conclusion R-star provides a helpful framework, not just for thinking about monetary policy, but also for understanding the current progress of GDP growth and its likely trajectory over the coming years. Moderate growth, both in the U.S. and the global economy, is far less alarming when you know what the underlying factors might be. And all the signs have been pointing to a slower growth trend. You may have had Destiny’s Child—Beyoncé—turned up too loud to spot the signs, but they have certainly been there. Slow trend growth and low r-star in the current global context presents certain challenges to monetary policy, another topic for a future day.

Swedish banks must not take this possibility for granted and thus take unnecessary risks. Here there is a link to our ambition to be open and clear. An open attitude sets limits and shows the game rules. We have clearly described how we view our role as “lender of last resort”, for instance, in our Financial Stability Report. 3 By being open about how we manage emergency liquidity assistance we reduce the risk that a situation may unnecessarily arise  3  Financial Stability Report 2003:2  BIS Review 106/2007  7  where we are forced to provide assistance. It also reduces the risk that we will be forced to provide support when this is not appropriate. Giving the right information at the right time and in the right way is important. It is particularly important in times when uncertainty is increasing. I hope that I have managed to communicate today not only the principles that have guided us with regard to our external communication in recent years, but also our picture of the recent situation. I also hope that I have succeeded in communicating that our ambition is to clearly report what we do and why. Thank you! 8  BIS Review 106/2007
Mortgage and real estate markets remain the biggest source of risk. I would like to make two observations in this connection. First, the imbalances on the mortgage and real estate markets persist. Both mortgage lending and prices for single-family homes and privately owned apartments have continued to rise at a moderate rate over recent months. And while prices for residential investment property have not increased any further, the risk of a price correction in this segment is particularly high. The renewed increase in vacancy rates indicates that the robust activity in rental apartment construction may have led to oversupply, exerting downward pressure on rental income and, in turn, on the prices of these properties. At the same time, initial yields on residential investment property, in other words the ratio of rental returns to transaction prices, are at historically low levels. In the event of an interest rate rise, initial yields on investment properties will also have to increase upon a change of ownership. This would place additional pressure on prices. Second, the risk appetite of domestically focused banks remains high. This is partly due to the fact that interest rate margins of these banks fell further in the first half of 2018. As long as this pressure on margins persists, incentives for domestically focused banks to increase risktaking will remain substantial.

The treatment of intra-bank exposures may pose challenges especially in the emerging markets where banking systems rely markedly on the parent funding (intra-bank funding will be treated as funding from external third parties and their maturity will have to be extended – netting out at consolidated level is not allowed). Other question is the treatment of liquidity transfer restrictions. Excess liquidity in one entity would not be recognized when calculating the consolidated LCR if there is a reasonable doubt about the availability of such liquidity (due to ring-fencing measures, non-convertibility of domestic currency, foreign exchange controls etc. ).This may lead to fragmentation of the liquidity management, replication of the treasury operations at decentralized level with cost implications. The growth impact of the regulatory changes is of large importance for the emerging markets, as they aim towards financial inclusion, development of financial markets, long-term sustainable growth and real convergence to the more AE’s. Two of the most important points which have been extensively discussed in the growth context are the regulatory impact on trade and long-term infrastructure finance. Trade finance has been considered as the most important facilitator of the trade flows in part of the emerging markets and hence as an important growth factor within this group of countries. Some of the estimates point to a figure of 80–90% of the world trade being reliant on some form of trade finance, like trade credits or insurance/guarantees.
In other words there may be reason in certain situations to depart from the rule that the repo rate should be changed if the forecast of CPI inflation differs from the 2 per cent target one to two years ahead. In such situations it is very important that we communicate our intention to deviate from the established policy rule and that we explain clearly the underlying reasons. One way in which the Riksbank has decided to deal with the issue is to highlight at various times "adjusted" measures of inflation, as indicators of the longer-term inflationary trend. I shall now illustrate this with a few examples. The first example is from the period during the second half of the 1990s when monetary policy was eased and there was a steep decline in the general level of interest rates. Between autumn 1995 and spring 1999 the repo rate was cut from just under 9 per cent to less than 3 per cent. This was accompanied by a sharp decline in long-term interest rates. The aim of the repo rate cuts was to stimulate the economy via the traditional demand channels so as to contribute to a rise in CPI inflation, but these effects came first after a certain lag. The immediate effects on the CPI of the rate cuts and the fall in the general level of interest rates were the opposite, through declining mortgage interest costs. This meant that CPI inflation initially dropped very sharply.

The problems we encountered in communicating monetary policy, which arose in conjunction with the substantial rate cuts during the second half of the 1990s, were also a significant reason for the Riksbank's decision in 1999 to publish a clarification of the formulation of policy and the application of the inflation target.1 Among other things the clarification specified the situations in which there may be reason to deviate from the simple rule of aiming policy at meeting the target of 2 per cent CPI inflation one to two years ahead. My discussion today is based on exactly the same line of reasoning as in that clarification. The second example is taken from spring 2001. Higher food and energy prices due to foot and mouth disease and mad cow disease, as well as supply shocks in energy production, caused a sharp rise in CPI inflation. The price increases were judged to be temporary, and the Riksbank decided therefore not to raise the repo rate. As the prices rises were estimated to disappear from CPI inflation relatively quickly, there was no need in this case to depart from the Bank's simple rule of monetary policy. However there was a need in our external communication to illustrate clearly the assessment that it was mainly transitory price increases that had caused CPI inflation to be so high above target.
11  For example, ‘Treasury Committee Questionnaire ahead of appointment hearing for Mr Paul Tucker’, The Monetary Policy Committee of the Bank of England: appointment hearing, First Report of Session 2005-06, Volume II. 12  Erceg C.J. and A.T. Levin, 2003, ‘Imperfect credibility and inflation persistence’, Journal of Monetary Economics, 2003, vol. 50, issue 4. BIS Review 46/2006  3  Notwithstanding the extent to which analysis of real economic variables seems to dominate the pages of most central banks’ published analysis, including the Bank of England’s, maintaining real aggregate demand in line with supply is not a sufficient condition for achieving an inflation target; indeed, it would be consistent with any level of inflation. We absolutely have to attend to indicators of medium-term nominal trends. That is why central bankers like me look at measures of inflation expectations from as many sources as we can: bond markets, surveys etc. And it is why the ECB and others, including at the Bank of England, track the monetary aggregates as a cross check, a potential amber light alerting us to medium-term risks. Stabilisation policy and the impracticalities of fine tuning: real-side stuff That brings me to the second element in the conduct of policy: stabilisation of the path of demand and output, in order to keep inflation in line with the target over the cycle, to underline the commitment to medium-term stability, and as something desirable in its own right. Well-anchored inflation expectations do make stabilisation policy ‘easier’.

Notably, on the supply capacity of the economy and its prospective rate of growth; on the rate of unemployment below which inflation is liable to increase; on the natural (or neutral) real interest rate. Those judgments are, in truth, formidably difficult to make, because they need to be regularly updated given structural change in the economy; and because each of the variables is unobservable! Perhaps understandably, that leads some policymakers 8 to the conclusion that these concepts may be useful as just that – concepts – but not at all in practical decision taking. Whilst not wanting to deny their unobservability, I do not take quite that view. For example, the natural real rate may be unobservable, but there is no ducking the fact that a policymaker needs to form a view on whether its policy stance is stimulating or restraining demand, which amounts to broadly the same thing. Against that background, I can return to a central bank’s objectives. To maintain inflation in line with a target over the medium term. And, typically with less priority, to stabilise the path of output in the face of cyclical shocks; in the UK Government’s mandate to the Bank of England 9 , that is expressed in terms of, inter alia, the MPC avoiding ‘undesirable volatility in output’. I shall say something about both, before going on to discuss some issues concerning monetary policy strategy that have featured in recent academic commentary.
In order to meet these challenges, it is imperative that this ecosystem transforms to accommodate changes in demand for financial products and services, the increased competition that is driving down profitability and the fast-growing need for operational resilience. In this context, a thriving, creative and efficient FinTech ecosystem may be a key element in the transformation of the financial system towards greater efficiency and resilience to shocks. This is why, as central banker and supervisor in charge of ensuring monetary and financial stability, I feel it is important to support this FinTech ecosystem and facilitate its smooth integration into the broader financial ecosystem. Naturally, I would like to make it clear that this integration does not,in my opinion, mean a convergence of players, a “harmonious” cooperation or a coordinated approach: the various players have different, sometimes even opposing goals, and that is how competition works. However, we should not systematically pit FinTechs against established players: there is a great variety of relationships between these two worlds, as we see every day. The potential for enriching the financial ecosystem and making it more efficient and resilient lies in strengthening the relationships between players and their diversity. What do we want to do and what are we doing at the Banque de France and the ACPR to support this development of the FinTech ecosystem?

In this way, experimentation allows us to send the right signals for the ecosystem to realise the potential of new technologies without fearing a delayed and unexpected “backlash” from the Supervisory Authority. The experiments underway at the Banque de France on a central bank digital currency (CBDC) are an illustration of the same experimental approach in the field of work specific to central banks. They present with issues directly related to the need for the Eurosystem, should circumstances require it, to be ready to issue a CBDC in order to ensure that central bank money is accessible to the general public and to preserve their freedom of choice of means of payment and their confidence in our currency. By testing the possible uses of a CBDC, we investigate not only the potential of blockchain technologies but we also question the players in the ecosystem on what tomorrow’s landscape could look like, on subjects as fundamental as the methods of exchanging financial instruments for CBDCs, the improvement of the conditions for executing cross-border payments or new ways of making CBDCs available to financial sector players. 2/4  BIS central bankers' speeches  *  *  The second thrust of our work is to promote a regulatory framework and appropriate supervisory practices. In this respect, our immersion, as a player, in the innovative FinTech ecosystem is a valuable asset that we intend to build on in order to contribute to the impending and necessary changes in regulations and supervision.
The work which I am presenting to you today is divided into three sections. The first tells the history of the SNB over the first seventy-five years of its existence. As the previous commemorative publications have already dealt in detail with this period, it was no longer necessary to recount all the events again. We thought that it would be more interesting to take a fresh and critical look at certain episodes from a historical perspective. This is why we called upon the services of three distinguished economists and historians, asking them to explore this period, and leaving them free to choose the salient points of their analysis. Michael Bordo of Rutgers University and Harold James of Princeton University took a detailed look into the first half-century of the SNB, in other words, from its Jean-Pierre Roth SNB founding in 1907 to the end of the Second World War. An exciting yet troubled time, which included the surge in inflation that came in the aftermath of the First World War, the laborious return to the gold standard, the 1936 devaluation, and the SNB’s activities during the Second World War. Peter Bernholz of the University of Basel is the author of the second chapter within this first part. He devoted himself to the period from 1945 to the early 1980s, including the return to convertibility, the Bretton Woods period, the transition to flexible exchange rates and initial experiences with an autonomous monetary policy.

The Central Bank lacks the capacity to alter the economy’s potential growth or shield it from the shocks that affect it, but it can contribute to smooth the cyclical adjustment. This is what we have been doing, always with our eyes firmly focused on our constitutional mandate to safeguard price stability, which is one of our greatest contributions to our country’s development. Our policy framework, especially exchange rate flexibility, has played a key role in this process. Suffice it to compare it with some past episodes where the exchange rate adjustment was not allowed or was tried to avoid, to later realize the important role that a fluctuating currency plays in this. But, as is always the case, every adjustment process of any significance has short-term costs to pay. In this case, inflation has been above the target range for longer than we expected. As we have stated many times before, Chile has a sound macroeconomic policy framework that allows us to adequately address the changes occurring in the economic environment. In recent years, the adjustment has been made and there are no significant macroeconomic imbalances yet to be corrected. The best contribution we can make as the Central Bank is to simply fulfill our mandate of price stability. Rest assured that we will do everything necessary to make it happen. Thank you.
While in general it fares pretty well relative to others, the Bank’s net trust rating currently stands at 28%. 29 The Bank has a positive trust rating of more than 80% among some members of the public, but among others it has a trust deficit of more than 50%. As for banks, governments and the media, this too is quite a Great Divide. It was writer Norman Douglas who said that “distrust of authority should be the first civic duty”. 30 And as someone sometimes described as an iconoclast, I have sympathy with that sentiment. But, again rather like cholesterol, it is possible to have too much of a good thing. Taken too far, distrust can be corrosive rather than regenerative. Sometimes bridging that Great Divide can be a bridge too far. Progress so far That begs the question of what can be done to close the gap, to restore trust in the financial sector, to alter the social identity of banking. There has been no shortage of ink spilled in crafting a response to the crisis. That includes regulatory response where there has been root-and-branch reform of both banks’ prudential standards – their safety and soundness – and consumer protection – their offering to customers and clients. The prudential regulatory reform agenda has been covered extensively elsewhere, including in speeches and consultation documents by the Bank of England, over the past few years. 31 So I shall confine myself to three points.

All of these issues will be looked at during this conference, with contributions by both users and producers of statistics. This will certainly make an important contribution to the design and implementation of the ECB’s strategic vision on euro area statistics. I would therefore like to thank you all very much in advance for your participation and attention. ESCB central banks in cooperation with a number of other institutions, is still in its infancy and is currently focused on securities needed for specific statistics. 6  BIS Review 50/2008
Bank of Canada (2016), “Renewal of the Inflation-control target”, Background information-October Bryan, M, F, and Cecchetti S, G (1994), “Measuring Core Inflation,” in N, G, Mankiw (ed,), Monetary Policy, Chicago: University of Chicago Press, pp. 195–215, Clark, T (2001), “Comparing Measures of Core Inflation”, Economic Review, Second Quarter, Federal Reserve Bank of Kansas City, Eckstein, O (1981), “Core Inflation”, Englewood Cliffs, N.J.: Prentice-Hall. Friedman, M (1974), “Inflation Prospects”, Newsweek, 4 November, p. 84 Gordon, R. J (1975a), “Alternative Responses of Policy to External Supply Shocks.” Brookings Papers on Economic Activity, 1975, no. 1: 183-206. Gordon, R. J (1975b), “The Impact of Aggregate Demand on Prices.” Brookings Papers on Economic Activity, 1975, no. 3: 613-70. Johansson, J, Löf, M, Sigrist, O, Tysklind, O (2018), “Measures of core inflation in Sweden”, Economic Commentaries No. 11 Nessén, M and Söderström, U (2001), ”Core Inflation and Monetary Policy”, International Finance vol. 4(3), pp. 401-39. Roger, S (1998), “Core inflation: concepts uses and measurement”, Reserve Bank of New Zealand Schreder, H, X (1952), “Impact of Business Conditions on Investment Policies.” Journal of Finance, May 1952, 7(2), p. 138-73. Sprinkel, B, W (1975), “1975: A Year of Recession, Recovery and Decelerating Inflation.” Journal of Business, January 1975, 48(1), p. 1-4. 18 [19]  Wynne, M, A (2008), “Core Inflation: A Review of Some Conceptual Issues.” Federal Reserve Bank of St. Louis Review, May/June 2008, 90(3, Part 2), pp. 205-28. 19 [19]

One could expect that easing regulations and fostering competition would lead to higher labour productivity growth in the industries concerned, as has happened, for example, in the telecommunications sector. Yet, over the past decade the euro area as a whole has experienced a decline in trend labour productivity growth. A number of other effects of integration on trade should also be looked at: for instance, whether labour regulations and taxation that hamper technological innovation could lead to a decline in exports within the euro area, as well as resulting in lower exports from the euro area to the rest of the world. As regards the latter effect, it appears that the product composition of euro area exports might involve risks for the future export performance of the euro area, if the under-specialisation in fast-growing high-tech sectors is not adequately addressed. Richard Baldwin’s paper offers a very useful and comprehensive treatment of the issues related to the euro’s trade effects. And what he found – or did not find – should certainly provide fertile ground for a fruitful discussion in the first session. Inflation and growth divergences in the euro area and policy implications The existence of divergences in growth rates and inflation in the euro area, and the associated challenges posed for economic policy in general, and the single monetary policy in particular, are issues that have been debated extensively and intensively since the creation of the euro.