samchain/econo-pairs-v1 huggingface dataset:
The scale of the shortfall would be slightly less if measured in terms of output per hour worked, but the same qualitative patterns (and puzzles) are apparent in productivity per hour measures. 3  The UK is not alone: OECD data reveal that several of the world’s largest economies (including Germany, France and Italy) have also been experiencing sluggish productivity growth by historical standards. One exception to this is the US, where productivity has actually grown at rates in excess of the pre-crisis average over much of the past three years. BIS central bankers’ speeches  1  As I fear may often seem to be the case with economists – I’m not going to offer you a simple answer. There is no single smoking gun. Rather I think there are a number of candidate explanations, each of which is likely to have played some role. In the next section of my talk, I’ll highlight three broad classes of explanation – which range from the relatively benign to more worrying diagnoses – and try to provide some guide as to their relative importance. I’ll then discuss how the uncertainty surrounding recent developments in productivity complicates the setting of monetary policy. The MPC needs to form an assessment of the strength of supply as well as demand when setting policy. I’ll conclude with some thoughts on recent developments in the economy more generally and how they have affected my policy decisions. Productivity weakness: a reality or an illusion?

And indeed, based in part on the pattern of past revisions, the MPC does think that the current and recent level of measured output is more likely to be revised up than down (Chart 3).6 But such revisions are likely to provide only a partial explanation of the productivity puzzle. For example, if GDP were to be revised in line with the path the MPC judge most likely, that would account for only around one fifth of the 9% productivity shortfall.7 If labour hoarding and data revisions provide only a partial explanation of the recent sluggishness of productivity growth, what else might account for it? Difficulty of extrapolating from the past The second explanation is that it might be misleading to extrapolate from previous trends when gauging the extent of the productivity puzzle. The past is not necessarily a good guide to the future. In particular, there are reasons to think that past productivity growth in both the energy extraction sector and the financial services sector may provide a poor guide to more recent trends in underlying growth in those sectors. In the twenty years prior to the financial crisis, productivity in the energy sector grew at an average annual rate of over 3%. But the pace of productivity growth slowed markedly in the past decade or so as North Sea oil fields aged and energy extraction became more difficult. Indeed, since the mid-2000s, productivity has actually been falling (Chart 4).
In our case, some things, such as financial deregulation, were achieved during the 1980s (although obviously not enough) and supported demand when this was already strong. Later on, when the economy was on its way down, tax changes were implemented that encouraged saving. To this should be added the mistake I have already mentioned, of not liberalising outward capital flows at the same time as the domestic credit market is deregulated. BIS Review 65/1998  -4-  The crisis culminated in the fall of 1992, when for a few days repo rates were raised to 500 per cent in the vain hope of stemming currency outflows. Interest rate hikes and other contractive measures for defending the fixed exchange rate in the midst of European currency turmoil further exacerbated the economic downturn and added to the banks’ loan losses. All in all, in the three years from 1991 to 1993, Sweden’s GDP fell by a total of around 6 per cent. Before the financial crisis had even been recognised in the summer of 1992, production had probably already fallen by 2-3 per cent. It is my impression that the process in these respects has been quite different in Asia, perhaps apart from Thailand. Growth did not drop much before the crisis. More important were the direct contagion effects, particularly via financial markets. Other “triggers” were political, such as uncertainty caused by upcoming elections, and perceived balance of payments problems. In many respects the process - once it had started - was also more rapid in Asia.

For example, of all the bonds issued in foreign currencies by world governments and the private sector, bonds denominated in euros accounted for more than 30% in 2003 (prior to launching the euro the overall amount of the bonds denominated in the national currencies of the current euro zone totalled 20%). The share of the euro in the currency reserves of the world amounted to some 19% in 2003. •  The larger the common currency zone is, the smaller the transaction costs, and the more it will support economic development, increase stability and future security. •  Whether joining the monetary union is useful depends on the ratio of the costs of the lost monetary policy independence to the gains arising from the accession. Since the exchange rate is not an adaptation tool in the monetary union, prices and salaries must be flexible and factors of production (capital and labour) have to move freely. In general terms, open economies (and Estonia is a very open economy) and countries with similar economic cycles gain more from the monetary union. •  Why coordinated economic policy? Coordinated economic policy must contribute to creating a favourable environment for stable and sustainable economic growth. •  The most closely coordinated area between the EMU member states and institutions is the budgetary policy.
Christian Noyer: France’s banking industry in 2006 – key trends Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the French Banking Commission, at the presentation of the 2006 Annual Report of the French Banking Commission, Paris, 29 June 2007. *  *  *  Welcome to this press breakfast, organised for the release today of the 2006 Annual Report of the Commission Bancaire. I would like to discuss the key trends that characterised France's banking industry in 2006, not just in terms of structure and performance but also the regulatory environment in which it operates. It is clear that the framework for financial activity and banking risk management has changed in recent months, confirming the ever more urgent need for new methods of risk assessment and for appropriate supervision that can react swiftly to these changes. In my view, several factors are important in this respect. First, in a highly international context, banks' performances are increasingly being judged from the outside, especially by shareholders. Those judgements are sometimes so harsh that they can have a direct structural impact. Consequently, banks can no longer afford simply to post excellent results – as again was the case in 2006 for most major international banks, especially French banks. They must also make sure that the underlying quality of those results is sound. To do this, they must pay special attention to the way they manage risks internally and plan their strategic expansion, and to their capital adequacy policy.

Ardian Fullani: Overview of Albania’s latest monetary and economic developments and outlook Speech by Mr Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision of the Bank of Albania’s Supervisory Council, Tirana, 27 March 2014. *  *  *  Today, on 27 March 2013, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Given Albania’s latest monetary and economic developments and discussions on their outlook, the Supervisory Council of the Bank of Albania decided to keep the key interest rate unchanged, at 2.75%. The Council deems that inflationary pressures on the economy remain subdued. Under these circumstances, the monetary policy will continue to be stimulating in the period ahead to provide the necessary conditions for compliance with our inflation target in the medium run. Let me now proceed with an overview of economic developments and key issues discussed at today’s meeting. *  *  *  Annual inflation stood at 1.9% in February, slightly up from a month earlier. The increase resulted from higher prices of agricultural products, tariffs of potable water in some regions of the country, and vehicle insurance premiums. Prices of other items of the consumer basket are stable and their inflation is low. New information obtained during the last month is limited. It does not alter our assessment that the overall economic and financial setting is characterised by low inflationary pressures. Our projections have remained overall unchanged, but near-term downside risks are assessed as high.
BIS Review 113/1999  2  Until a decade ago, one might have been fooled into thinking that there were in fact two separate European identities supported by two distinct economic systems. However, this would be to deny the close ties which still existed, even under the difficult circumstances of the time, between countries both east and west of the Iron Curtain. Events since the fall of the Berlin Wall have now shown that this difficult period did not destroy but merely delayed a process of further European integration – including both East and West – which is a natural consequence of our shared political and economic interests and our common cultural heritage. Ever since the velvet revolutions which swept across central and eastern Europe a decade ago, it has been apparent that, as part of their difficult transition to properly functioning market economies, these countries would become increasingly integrated with the economies of western Europe. Moreover, it was clear that this process, with its ultimate objective of accession to the European Union, could not be achieved instantaneously, but would have to be extended over a period of time, in some cases a considerable period of time. No other scenario could be foreseen, given the largely uncharted path which these countries had to tread in dismantling the old system of central planning and replacing it with the structures necessary to support a properly functioning market economy.

Of course, times change, and with them the economic and monetary environment. This was certainly the case in the 1970s when, following the collapse of the Bretton Woods exchange rate system and the explosion of oil prices, monetary authorities around the world were faced with new and difficult challenges. In many countries, attempting to meet these challenges was accompanied by a move to flexible exchange rates. However, for the most part, we Europeans attempted and eventually succeeded in treading a different path. This was also the case here, when, in the latter years of Governor Zolotas’ time in charge at the Bank of Greece, exchange rate stability was sought by pegging the drachma to the US dollar. As we all know, at that time Greece was not yet a member of the European Community. But this was also soon to change. Indeed, assisting in the successful preparation for membership of the European Community is yet another notable contribution that Governor Zolotas made to Greece’s economic history. Since that time Greece has continued to face challenges as a member of the European Community, and now of course of the European Union (EU). Greece is one of the four EU Member States which have not yet adopted the euro. It has announced its willingness to do so in 2001. In order to join the euro area, the convergence criteria with respect to inflation, long-term interest rates, public finances and exchange rate stability have to be fulfilled. Sustainable convergence is a prerequisite for adopting the euro.
If, for example, the Swiss franc appreciates by 2% and domestic inflation is 1%, prices of Swiss products are raised by 3% abroad. Yet as soon as foreign inflation exceeds the level of 3%, the competitive disadvantage for the Swiss export sector resulting from the nominal appreciation is more than compensated for. In fact, inflation has been slightly higher in Euroland. In real terms, the appreciation of the Swiss franc against the euro is therefore about 5%. It should be noted that a real appreciation of 5% over a period of more than three years is not extraordinary by historical standards. To be sure, the euro has also lost some ground against the US dollar and the yen. There are, however, some factors that point to a future rise in international demand for euros. These include the growth of the euro financial market and of its liquidity, the growing significance of the euro as a benchmark currency, and the euro area's largest trading share worldwide. Moreover, the gap between the US growth rate and that of Euroland has narrowed recently, albeit ultimately for cyclical rather than for structural reasons. The most decisive positive factors for the future exchange rate development of the single currency are, for one thing, the convincing removal of the structural and institutional weaknesses in numerous member countries and EU institutions. The willingness to continue and implement reforms will in large measure influence the growth path of Europe. For another thing, the euro rate is determined by confidence in the ECB's monetary policy.

Source: Norges Bank SG 16. januar 2003  BIS Review 2/2003  7  Forward interest rates Norway, Germany and the US 7.0  7.0 6.0  6.0  Norway  5.0  5.0  4.0  4.0  Germany 3.0  3.0  US  2.0  2.0  1.0 1.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  Source: Norges Bank SG 16. januar 2003  Real exchange rate (TWI/relative CPI) 90  90  95  95  100  100 1970 - 2001  105  105  110  110  115  115 1971  1975  1979  1983  1987  1991  1995  1999  Source: Norges Bank SG 16. januar 2003  Purchasing power parity Norway and Germany. Relative prices and exchange rate  200  Consumer prices  100  200  100 Krone exchange rate  50  1970  50  1975  1980  1985  1990  1995  2000  Sources: Statistics Norway and Norges Bank SG 16. januar 2003  8  BIS Review 2/2003  Sweden's real exchange rate and relative GDP compared with the euro area. Quarterly figures.
We do not wish to act in a way that may trigger a game situation in the foreign exchange market. Foreign exchange intervention rather than a change in the interest rate may give ambiguous signals to foreign exchange operators and a game situation may arise. Chart 11. Real krone exchange rate Deviation from average. Per cent  15  15  10  10  5  5  0  0  -5  -5  -10  -10  -15 1970  1980  1990  2000  -15 2004  Source: Norges Bank  Although the krone may fluctuate in the short term, it will generally stabilise over time. When inflation has been higher in Norway than among our trading partners for a longer period, the krone has generally depreciated. When inflation in Norway is expected to be broadly in line with that of other countries, the exchange rate will normally also return to its normal range following periods when the krone has been particularly strong or particularly weak. This provides a basis for stable exchange rate expectations. The advantage of a flexible exchange rate is perhaps most evident when the economy is sluggish. If the krone were to remain at a level that is too strong, nominal wages would have to remain unchanged over a longer period or fall in order to bolster companies and jobs. This only occurs when unemployment is very high. With a flexible exchange rate, a depreciation of the krone can also boost competitiveness.

More important still, however, is the need for the Banco de España’s autonomy in the area of supervision to continue to be respected and for governments to continue to resist the temptation to interfere in its supervisory decisions, while continuing to design legal instruments and to defend the proper use of public resources. The Banco de España must continue to maintain a dialogue with governments, not only advising them but also listening to them (since nobody has a monopoly on good ideas), although supervisory decisions must continue to be based, as up until now, solely on a professional basis. 6  BIS central bankers’ speeches  I have been emphasising today what has been done during these years of crisis by Spain (that is to say, everyone), because until our country has regained the trust of the rest of the world, the attention of investors will continue to be focused on what all relevant parties have done and are doing to correct the imbalances of the Spanish economy. In particular, they will be monitoring and assessing the extent of cooperative behaviour to overcome the crisis. I’m going to conclude with a few words on Europe, as I believe our membership of the European Union and of the Monetary Union is another good reason for viewing optimistically our possibilities of overcoming the crisis. Some measures need no further explanation, as they clearly show how Europe has helped us and continues to help us during this crisis.
On the other hand, the pro-cyclicality and highly volatile nature of capital flows poses significant macroeconomic management challenges to policymakers. If not properly managed, the build-up of excesses amid strong capital inflows and the subsequent bursting of the bubbles could be detrimental to financial stability, wreaking havoc on economic growth. 3. Managing capital flows has been a dynamic learning process for policymakers in developing economies. Prior to the Asian financial crisis, Asian economies embraced capital flows with little wariness of the downside risks. The dominant flow pattern at that time was for Asian governments to invest their savings in high-grade government papers of the advanced economies. The funds were then recycled back to Asia in the form of highly volatile shortterm capital flows. These resulted in serious imbalances in the balance of payments accounts, and mismatches in currency and maturity in the balance sheets of banks. The subsequent shifts in market sentiment and expectations led to abrupt reversals of capital flows out of Asia. Currency crashes amplified the adverse effects as capital fled the region in a drove. The Asian Miracle went bust. The capital flows that had once fertilised the impressive growth eventually caused a capsize when the Asian financial crisis hit us in 1997 – a lesson that we all still vividly remember. 4. The Asian financial crisis gave us a much-needed wakeup call at a dear price.

Peter Pang: Managing capital flows – the search for a framework Welcoming address by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Asian Development Bank Institute and Bank for International Settlements Joint Seminar for the book launch on “Managing Capital Flows: the Search for a Framework”, Hong Kong, 21 April 2011. *  *  *  Good morning, Ladies and Gentlemen. 1. Let me thank Mr Kawai for inviting me to this event. It’s my honour to welcome you to this joint seminar by the Asian Development Bank Institute (ADBI) and the Bank for International Settlements (BIS) to mark the launch of the new book, “Managing Capital Flows: the Search for a Framework”. This is a topical issue right at the centre of attention of policymakers in this region. And as the title suggests, it is also a subject that we are still in search for an answer. 2. There is an old Chinese proverb saying that “water can keep a boat afloat but it can also capsize the vessel”. This suitably characterises the nature of international capital flows – it brings both benefits and risks to the development process in Asia. Capital inflows have been playing a key role in the economic development of the region – funding investments and bringing along technology and skill transfers. These were conducive to the emergence of the “four Asian Tigers” in the 1980s, and the rapid modernisation process of China, India and other Asian economies.
International standards explicitly call on payment systems to settle in central bank money when possible and where that’s not possible, to settle in commercial bank money and to strictly limit any credit and liquidity risk of the instrument being transferred and settled. However stablecoin arrangements propose to transfer new instruments that they will create themselves – and to settle most of their transactions across their own books. With the right regulation, stablecoins may be safe for use in systemic payments chains. But the protections these stablecoins would offer are currently big question marks. Some major stablecoin proposals offer no legal claim for holders. None. This is significantly different from how we currently pay: When my parents pay for their groceries using their debit card, the shop ultimately receives an electronic deposit in the shop’s bank account - a promise from the shop’s bank to redeem the amount deposited in local currency on demand. When – pre-COVID – my parents paid in cash, the shop got banknotes with a central bank promise to “pay the bearer.” Were they to pay in the future with some proposed stablecoins, the shop would just get a bunch of stablecoins. If the shop can’t sell the stablecoin to get local currency or other goods in an amount equivalent to the price of the grocery order, tough luck. Additionally many stablecoins propose backing in instruments that may have market and liquidity risk. While these risks might be acceptable for speculative investment purposes, payments are different.

5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  But of course innovation won’t be sustained if it’s unsafe or detrimental for financial stability. Clear, transparent regulatory expectations are critical to ensure that uncertain rules of the game don’t hold innovation back. This poses several challenges for regulators – I’m going to focus on the two that are most important for financial stability. We need payments to be secure and reliable. Problem 1 for central banks is that robust and reliable ways to pay are essential to financial stability. Well-functioning and resilient payment chains allow payments to be made on time, with confidence, even in periods of economic uncertainty. Think – receipt of your salary, benefits and pensions, direct debit bill payments ability to tap and ride the tube home or leave the restaurant after a meal. The reliability and resilience of payments is so important to our economy that the UK Financial Policy Committee, tasked with identifying, monitoring and reducing systemic risks, lists avoiding serious interruptions in the provision of payment and settlement services as one of the very purposes of preserving financial stability. If a stablecoin were to significantly replace current systemic payments chains as a way to pay – logic follows that they would pose the same risks to the economy as current payments chains and should be regulated to the same standards. This is relatively straightforward: regulation should be technology neutral: based on the activity conducted and the risks posed, not the technology used or the entity’s legal form.