samchain/econo-pairs-v1 huggingface dataset:
His “Of the Balance of Trade”, published 34 years before Smith’s “The Wealth of Nations”, was arguably the first example of modern economic reasoning. In it he railed against the “numberless bars, obstructions, and imposts, which all nations of Europe, and none more than England, have put upon trade” which “deprive neighbouring nations of that free communication and exchange which the Author of the world has intended, by giving them soils, climates, and geniuses, so different from each other 2.” What an elegant way to talk about the gains from international trade! The benefits of free trade are now well established. Similarly, economic theory provides compelling arguments for the potential advantages of integrated global capital markets based on the efficient allocation of resources. But, in practice, cross-border capital flows can be fickle and flighty, with destructive effects on the real economy. It is fair to say that the case for the free movement of capital took something of a knock following the string of crises since the early 1990s in Latin America, East Asia, Russia and most recently in Europe. As a result, a variety of means to insure against sharp changes in capital flows have developed at domestic, regional and international levels which are collectively referred to as the “global financial safety net”.

The mix of self- and multi-lateral insurance arrangements that have arisen in response to recent events and liquidity pressures appears suboptimal – resembling more of a patchwork than a safety net. We need a better global financial safety net with the IMF at its heart and three key additional elements that will make the safety net more effective. •  First, a more reliable and flexible source of funding for the IMF and greater clarity on coordination with Regional Financial Arrangements. •  Second, a stronger mandate for IMF surveillance and stress testing to reduce the likelihood that countries might need recourse to the safety net, and possible prequalification to reduce stigma when liquidity is needed. 16  See Briefing for G20 Meeting, September 4, 2015, Inclusion of Enhanced Contractual Provisions in International Sovereign Bond Contracts. https://g20.org/wp-content/uploads/2015/09/IMF-Note-on-Inclusion-of-EnhancedContractual-Provisions-in-International-Sovereign-Bond-Contracts-Briefing-for-G20-Meeting.docx. 17  See Communique, G20 Finance Ministers and Central Bank Governors Meeting, 4–5 September 2015. https://g20.org/wp-content/uploads/2015/09/September-FMCBG-Communique.pdf. 18  Bank of England staff calculations based on BIS data. BIS central bankers’ speeches  7  •  Third, better mechanisms for dealing with debt restructuring and reducing the risk of disorderly spillovers. None of this will be easy. As Hume said “it must, however, be confessed that…all these questions of trade and money are extremely complicated. 19” But there are some important lessons from the experience of central bank reforms since the crisis that, while complicated, show us what might be possible. 19  8  See Hume (1758).
Higher levels of capital will certainly have to be required in the future, particularly as banks gradually assume higher levels of risk. Such is the spirit of the Basel II standards, but this crisis has proved they do are not enough. It will be necessary to examine how capital requirements and accounting norms may have amplified the financial crisis, and what must be done to avoid the excessive procyclicality of the banking activity. Fortunately this has not been a problem in the financial systems of Colombia, Chile and the rest of the region, where regulatory schemes worked. Banks are adequately matched in terms of currencies, an aspect that used to be the Achilles heel of our banks. Central banks must strengthen and perfect the models with which they carry out their stress tests. They should take into account the interconnections within the financial system and detect vulnerabilities opportunely. We have seen how the U.S. investment banks, insurance companies and other non-banking agents of the financial system played a leading role in the origin and spread of the crisis, but were not at the heart of the banking supervision network. Of the many aspects that may be debated with respect of the financial system, there is one that should be singled out, especially to the extent that banking systems of emerging economies continue along the lines of financial innovation.

It is important to allow securitization, but establishing incentives for both credit screening and monitoring of payments to remain at the banks and that the process of transferring credit risk away from individual institutions’ balance sheets does not escape the authority’s eye. The current crisis should not become a hindrance to financial development, but a sign of alert in favor of prudence and rigor when assessing the innovations. Thank you very much. References Batini, N. and E. Nelson (2000), “When the Bubble Bursts: Monetary Policy Rules and Foreign Exchange Market Behavior,” mimeo, Bank of England. Bernanke, B. and M. Gertler (1999), “Monetary Policy and Asset Price Volatility,” in New Challenges for Monetary Policy, Proceedings of the Jackson Hole Symposium 2005, Federal Reserve Bank of Kansas City, pp. 77-128. Blinder, A. and R. Reis (2005), “Understanding the Greenspan Standard,” in The Greenspan Era: Lessons for the Future, Proceedings of the Jackson Hole Symposium 2005, Federal Reserve Bank of Kansas City, pp. 11-96. Calvo, G. and C. Reinhart (2002), “Fear of Floating,” Quarterly Journal of Economics, Vol. 107, No. 2, pp. 379-408. Cecchetti, S., H. Genberg, J. Lipsky y S. Wadhawani (2000), Asset Prices and Central Bank Policy, Geneva Reports on the World Economy No, 2, ICMB and CEPR. 6  BIS Review 68/2009  Ellis, L. (2008), “The Housing Meltdown: Why Did It Happen in the United States?,” BIS Working Paper No. 259. Keys, B., T. Mukherjee, A. Seru and V. Vig (2009), “Did Securitization Lead to Lax Screening?
From society’s point of view, there must be a balance between potential efficiency gains and risks of exploitation in conflicts of interest. Whether or not legislation is required depends on the seriousness of the conflict of interest and the size of the incentives to promote one’s own interests. Examples in the United States The clash between utilising economies of scale and limiting the damaging effect of conflicts of interest goes back a long way, particularly in the United States. Following the stock market turbulence in 1929, there was intensive discussion of these conflicts of interest. Now they have come into focus once again, following a new stock market crisis. It appears as though fewer people care about the conflicts of interest when earnings are high. The US 1930s example began back in the mid-1920s, when stock market prices soared. Many people who bought shares during this period were convinced that this long upturn meant a new epoch with permanently higher earnings on shares. The insight that prices could not continue to rise at the same rate spread gradually and the stock market fell heavily in autumn 1929. The fall continued for several years. After three years, the value was down to 15 per cent of the previous figure. Many investors felt that they had been deceived by the banks who had sold them shares and bonds. In several cases it was the new universal banks that had been most active in mediating securities.

This does not necessarily mean that Swedish bankers are more honest than American ones, just that the advantages of exploiting conflicts of interest are less and the costs are greater. My second conclusion is that it is important that all significant conflicts of interest should be discussed openly and publicly. There are justifiable claims for reliable information on borrowers and issuers, but the same applies to information on the measures taken by the banks to avoid exploiting conflicts of interest. I believe that there are relevant market solutions in most cases, as long as the conflicts of interest are clear. Thirdly, I would like to encourage the Swedish banks to carefully follow international developments within the field of compliance - i.e. the routines to ensure that internal and external rules are adhered to. In many cases the requirements have become much more stringent in recent years, and it is important to thoroughly assess developments in other countries. For instance, the Chinese wall has been repaired in the United States, and is now higher than ever. This has been achieved through legislation. It remains to be seen whether the Swedish banks can solve these problems themselves. Fourthly, I believe that the supervisory authorities play an important role with regard to identifying and overseeing potential conflicts of interest. Our Finansinspektion has begun to do this to a greater extent, not only with regard to banks but for the financial sector as a whole.
In the medium to long term, the interest rate that domestic policymakers must set to meet their inflation targets and keep a balance between demand and supply is strongly influenced, through the integration of capital markets, by such global rates. These are the product of real global factors. For the past thirty years, a number of profound structural changes in the world economy have pushed down on the level of world real interest rates perhaps by as much as 450bps. Researchers at the Bank of England have estimated a decomposition of these changes, suggesting, in declining order of importance: slowing potential growth, the rise in saving due to demographic forces; higher credit spreads, lower desired investment given a lower relative price of capital, changes in income distribution; excess saving in emerging markets, and declining public investment. Collectively these factors could account for the lion’s share of the 450bp fall observed in the past 30 years and suggest that global real rates may remain low – perhaps around 1% – in the long term. 25 In the short run, the domestic real rate that balances demand and supply can deviate from this long-term global level reflecting a range of transitory factors – including demand and supply shocks from fiscal policy, credit markets and exchange rates. It is critical domestic policymakers judge the scale and persistence of these factors and take them into account to meet their domestic objectives.

Chart 2 International synchronisation of inflation (headline and core) Headline inflation  Core inflation  average pairwise correlation  0.6 0.5 0.4 0.3 0.2 0.1  0.0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 Notes: Average pairwise rolling (15 years) correlation of seasonally-adjusted quarterly headline and core inflation. The country-specific average pairwise correlation of a time series xi in country i (pcix ) is the average of the contemporaneous correlation between xi and xj for all i ≠ j. The average pairwise correlation (pc x ) is computed as the average of the pcix across all countries and, as such, provides a measure of international synchronization of 𝑥𝑥. Source: OECD, Global Financial Data, DataStream, National sources, and Bank Staff calculation. 8  BIS central bankers’ speeches  Chart 3 International synchronisation of inflation (headline and core) and policy rates at different frequencies  Notes. Rolling average (15 year window) of the bilateral dynamic correlations of an unbalanced panel of 46 countries. Dynamic correlation is a function of the cross-correlation and autocorrelation functions of two series that breaks down their comovement into different frequencies. “Cohesion” is the average of bilateral dynamic correlations in the sample. See Croux 26 et al. (2001). Source: OECD, Global Financial Data, DataStream, National sources, and Bank Staff calculations. 26  Croux & Mario Forni & Lucrezia Reichlin, 2001. “A Measure Of Comovement For Economic Variables: Theory And Empirics,” The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 232-241, May.
Many foreign workers who come to Norway find employment in Norwegian enterprises. This represents an increase in the supply of labour in Norway. Employment will thus be able to increase to a further extent than would otherwise have been the case without the emergence of labour shortages. In isolation, an increased supply of labour from new EU countries may lead to a higher-than-normal increase in potential output for a period. Many of the foreign workers work for a shorter period in Norway without being employed in a Norwegian enterprise. Examples are foreign contractors and self-employed in the construction industry who carry out various building projects in Norway. An increase in the use of these short-term contracts will appear as an increase in Norway’s services imports, and contribute to increasing the supply of goods and services without drawing on domestic resources. Inflation decelerated markedly from summer 2003 and continued to fall in the beginning of 2004. Subsequently, consumer price inflation has picked up, albeit at a gentle pace. In July, the year-on-year rise in consumer prices adjusted for tax changes and excluding energy products was 1.1 per cent. Prices for imported consumer goods have continued to fall. The price fall may reflect high productivity growth in the production of some goods and large investments to increase production capacity, particularly in China. This has led to strong competition and a low rise in prices for internationally traded goods. The shift in imports, for example clothing imports, towards low-cost countries seems to be substantial again this year.

and Global Imbalances: Can Dark Matter Prevent A Big Bang”, Working Paper, Kennedy School of Government, Harvard University, November. Hofmann, B. and Kuijs, L. 2006. “Profits Drive China’s Boom”, Far Eastern Economic Review, 169(8): 39–43. National Institute of Economic Research 2011. “Sparsamma hushåll har skapat ett stort överskott i den svenska bytesbalansen” (“Thrifty households have created a large surplus in Sweden’s current account”). The Swedish Economy, article. King, M. 2009. Speech given to the CBI Dinner, Nottingham, January 20. Krugman, P. R. 2007. ”Will there be a dollar crisis?”, Economic Policy July pp. 435–467. Krugman, P. R. and Obstfeld, M. 2009. International Economics: Theory and Practice, eighth edition. Addison-Wesley, Boston. Lagerwall, B. and Nessén, M. 2009. ”The long-term development of the krona”. Economic Commentary no. 6, 2009, Sveriges Riksbank. Lane, P.R. 2006. “The Swedish external position and the krona”. Sveriges Riksbank Working Paper Series 200. Lane, P. R. 2010. “A European perspective on external imbalances”. SIEPS 2010:5. Lane, P.R. and Milesi-Ferretti, G.M. 2002. ”External wealth, the trade balance, and the real exchange rate”. European Economic Review 46. Llaudes, R. Salman, F. and Chivakul, M. 2010. ”The impact of the great recession on emerging markets”. IMF WP 10/237. Obstfeld, M. and Rogoff, K. 2005. “Global Current Account Imbalances and Exchange Rate Adjustments.” Brookings Papers on Economic Activity 1: 67–146. White, W. R. 2008.
On the contrary, we must convince the rest of the world that we have not refrained from adopting the euro so as to be able to devalue the krona if the going gets tough. The long-term positive effects of joining the monetary union should not be played down just because they are difficult to measure. The participating countries and markets are drawing closer to each other. This probably affects competition, investment flows and prices to a greater extent than traditional models are able to show. I believe that the costs of staying outside are particularly great at present and in the coming years, for instance as EMU generates far-reaching structural changes in the business sector. To this should be added the political arguments. Sweden has already lost influence in the area I am best able to assess, economic policy. This is particularly serious today as the global financial map is being redrawn and we need to assert our position as a small country in Europe. Others are better placed to pronounce on other areas but it seems logical that our positions there are also being weakened because we are not seen as a fully-fledged participant in EU cooperation. 5  BIS Review 92/1999  Finally it is a matter of weighing all these arguments against each other. The assessments involved, economic as well as political, are naturally difficult.

The Riksbank believed this expenditure would be higher than estimated in the report and that small and medium-sized firms in particular would find it difficult. The Riksbank also drew attention to the risks of Sweden being discriminated against in various respects. One example was the disadvantageous terms for outsider countries in TARGET, the European payment system. Moreover, an outsider position for the time being would involve additional costs in various parts of the economy. Financial institutions, for instance, would have to operate twin systems in order to remain competitive. Negative long-term effects of remaining outside Such is the nature of the long-term effects that assessments of them are unlikely to change fundamentally in the course of a year or two. Still, there is new and additional information that may cast a somewhat different light on certain aspects. One major issue concerns the link between EMU and the single market. There is empirical evidence that the single market is exerting downward price pressure in the European Union. Some assessments suggest, moreover, that EMU may lead to a further price fall; figures as high as 10 to 15% have been mentioned. If the effects were to be of that magnitude, the welfare gains would be substantial. 3  BIS Review 92/1999  In practice, however, it is not easy to distinguish the parts that EMU and the single market are playing in price formation. Empirical data therefore have to be treated with caution.
And on the subject of history, I would like to make some observations. Europe's single currency has ancient roots: apart from the single currency of the Roman Empire, two thousand years ago, I could mention George of Podebrady, a king of Bohemia in the 15th century, who called for a common currency for Europe, or Victor Hugo's call for a single market with a single currency in Europe in the 19th century. By implementing the Economic and Monetary Union enshrined in the Werner report 38 years ago, we have also achieved a much older plan, an ancient vision of a unified continent, including monetary union. This historic vision has always been closely associated with the search for prosperity and the preservation of peace. Voltaire's remark: “En effet l’histoire n’est que le tableau des crimes et des malheurs” – “Indeed, history is nothing more than a tableau of crimes and misfortunes” – from the perspective of the mid-twentieth century could not have been more apt . It is no surprise that it was at that point in time that Europeans decided to accelerate the march towards European unity. The single currency is the most advanced feature of European unity and in many respects its emblem. We owe it to the lucidity of the founding fathers and to the determination of a series of visionary leaders. We saw these founding fathers a moment ago on the screen. To them we owe an immense debt of gratitude.

The resolute pursuit of structural reforms in line with the Lisbon process, which are decisive in order to raise the long-term growth potential of Europe. And the lucid monitoring of the national competitive indicators, including unit labour costs. 2  BIS Review 69/2008  Mr President of the Parliament, Mr President of the Union, Mr President of the Commission, Mr President of the Eurogroup, Europe can count on the ECB and on the Eurosystem to implement in this century the historic task which was assigned to us at the end of the last century. We will be faithful to the primary mandate given to us by the Treaty. We know that our fellow citizens are asking us to deliver price stability. We know also that price stability is a prerequisite for financial stability, a very important objective at the current juncture. All the members of the Governing Council make their decisions taking into account the interests of the whole of the euro area, of 15 countries. We do not consider any particular country, but all 15 of them. Sehr geehrte Frau Bundeskanzlerin, This year in Aachen, upon receiving the Charlemagne Prize, you quoted Konrad Adenauer: “Gerade in Aachen wird man die Mahnung verstehen, dass Europa uns heute Schicksalsgemeinschaft ist. Dieses Schicksal zu gestalten ist uns übergeben”. “In Aachen, above all, people will understand the call: that Europe, for us today, is a community with a common destiny.
Benefits and likely risks brought by this major transition in global finance will be discussed in length over the next two days by academicians and policymakers in six different sessions. I  BIS central bankers’ speeches  1  believe that this conference will produce fruitful and beneficial outcomes for global financial stability. I would like to thank our participants and distinguished guests for their contributions and for being here with us. 2  BIS central bankers’ speeches

This includes the visit of King Abdullah of Saudi Arabia to four Asian countries in 2006 and several meetings between King Abdullah II of Jordan and Singapore’s President and Prime Minister, to name just a few. I am happy that frequent dialogue and cooperation are taking place at all levels, via platforms such as the Asia-Middle East Dialogues or AMED. AMED was first held in 2005 in Singapore, and Egypt recently hosted the 2008 meeting. The 2008 meeting involved a total of about 50 countries from the Middle East and Asia. I am also happy to see strong cooperation in training. The Islamic Development Bank’s IRTI 3 , Bahrain’s BIBF 4 and Malaysia’s INCEIF 5 are Islamic finance-focused training institutes which provide very good training in this area. Such training programmes, besides imparting knowledge, enable people to know each other better, and provide the basis for future cooperation. Conclusion To conclude, let me summarise. There are three essential tasks we face in promoting greater integration of Islamic financial markets. The first is to encourage greater economic integration and increased cross border flow of trade and investments. Economic integration drives financial integration and vice versa. The second task is to foster appropriate legal, regulatory and supervisory frameworks that effectively cater for the specificities of the Islamic services providers; and to work towards greater convergence of rules and practices in Islamic Finance. This requires greater trust and stronger ties among supervisors. The third is to cultivate stronger people-to-people bonds across all levels, through training, conference and dialogues.