samchain/econo-pairs-v1 huggingface dataset:
Real interest rates in Japan are probably higher than warranted by the state of its economy. But the effects of further monetary easing are not expected to be decisive. Nor is it clear that fiscal stimulus will lift the economy on a sustained basis. 11. The biggest drag on the Japanese economy is its demographics. Japan’s working age population has been growing by just 0.2% per annum over the last ten years. Together with a declining participation rate, the labour force has contributed negatively to GDP growth in almost every year since 1998. A firm turnaround in the Japanese economy requires a sustained increase in productivity, which entails structural reforms to enhance product market flexibility and spur competition and innovation in the services sector. Emerging Asia: the rise of domestic demand 12. In comparison, Emerging Asia has weathered the financial storm best, with the region’s total production now one-third higher than what it was in 2008. 13. China secured a quick and vigorous rebound from the depths of the global trade collapse in early 2009. It has since reined in inflationary pressures and indications are that it has achieved a “soft landing” of its economy, registering an estimated 7.8% growth last year on the back of solid consumer demand and infrastructure investment. While China faces significant economic restructuring challenges, its impressive growth trajectory appears intact for now. 14. India too rode through the global financial crisis comfortably but is now going through a weak patch.

This in a sense underscores the importance of Tinbergen’s augmented policy rule – that there should be as many policy tools as there are complex sub-systems – when managing a complex system of systems. None of the models so far considers global spill-overs, either through trade or financial channels. Generally-speaking, there is a dearth of macro-economic models which take seriously these international spillovers in an analytically-coherent fashion. Even if modelling this behaviour is over-ambitious in the short-term, there may be merit in improved monitoring of these global flows of financing over time, given their importance for the stability of economies and financial systems. Elsewhere, I have likened this to the creation of “global weather map”. This could be used to track and map the source, scale and nature of cross-border capital flows in close to real-time (Haldane (2012, 2014) and IMF (2013)). Plotting this complex, rapidly-adapting web would be a natural precursor to using it to address “what if” questions. What, for example, would be the impact of a rise in US interest rates on the international flow of funds? The IMF would be the natural guardians of this surveillance-cum-stress-testing machine. (c)  Policy design  Significant changes have been made to the macro-financial policy architecture since the crisis. In general, these frameworks have moved closer towards meeting Tinbergen’s rule of having as many distinct policy tools as there are complex layers in the macro-financial system.
SPEECH  Considerations on the Road Ahead for Monetary Policy Implementation June 02, 2022 Lorie K. Logan, Executive Vice President Remarks at the New York Fed and Columbia SIPA Monetary Policy Implementation Workshop, New York City As prepared for delivery  Good afternoon. It is a pleasure to speak with you today at the New York Fed and Columbia SIPA workshop on monetary policy implementation. Many of you have attended these workshops in the past, and it is great to be together again to talk about issues of essential importance to policy implementation. It is also nice to see so many new participants, reflecting the broad interest and engagement in the topic of digital innovation. Over the past two days, we heard about faster forms of payments and new, digital forms of money—both private and public—and the effects they might have on money markets, policy implementation frameworks, and the international landscape. Digital innovation in money and payments is occurring for a reason—consumers, businesses, and financial market participants can benefit from around-the-clock, faster, and possibly programmable payments, both to reduce risk and to simplify financial transactions. Increased competition that results from new forms of money and payments could lower costs, increase service availability, and stimulate further innovation. Harnessing the benefits of innovation to consumers and businesses, while maintaining a safe and effective monetary system, may require new legislation, changes to regulations and to supervisory approaches, and modernization of traditional payment systems. The specifics of the appropriate initiatives will vary by country.

These developments could have significant implications, including for financial stability, national security interests, and international cooperation. In my role as manager of the Federal Reserve’s System Open Market Account, I am looking at these issues from the vantage point of monetary policy implementation. And in my remarks today, I will discuss some key issues that digital innovation in money and payments raises for policy implementation. In particular, I will examine how digital currencies might impact interest rate control and central bank balance sheets. In the spirit of this workshop, I won’t speak to the U.S. context specifically, but rather intend to discuss conceptual issues for policy implementation across jurisdictions. And, I won’t take a position on regulation, design choices, or a preference for a private or public solution. As always, the views I express today are my own, and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.1 Private and Public Innovation I would like to start by describing two types of monetary instruments that could, in the future, be significant for policy implementation. In the private sector, a broad range of digital assets are emerging.
We have only to consider the substantial cost of the recent financial crisis to realise that we can and should do better! In my view, two main prerequisites have to be fulfilled in tandem in order to sustainably achieve a higher level of financial stability. The first is to continuously strive to improve our knowledge about the sources of financial instability. Clearly, the complex, continuously evolving financial system will never allow us to prevent all crises for all times. But, in general, the more information we have on the structure and dynamics of the system, the more accurately we can design its regulation, and the less uncertainty there will be about the “optimal” mix of regulatory instruments. The second prerequisite for improving financial stability is to recognise that financial stability is a question of will, or more precisely, of political will. In other words, even perfect information on the sources of financial instability might prove insufficient if the collective will needed to translate this information into practical measures is not present. Conversely, even with imperfect knowledge, financial stability is attainable if we are willing to take precautionary measures commensurate to the extent of our ignorance. 7  6  For instance, a regularly updated Q&A section covering relevant topics around SNB and Swiss monetary policy. BIS central bankers’ speeches  My optimism that financial stability is achievable rests partly on the fact that, in the case of Switzerland, identifying the main sources of potential financial instabilities is rather straightforward.

These thanks would not be complete without expressing publicly what I have already had the opportunity to say in private to the members of the management and staff of the European Monetary Institute: without their personal commitment, their spirit of innovation, their boundless ability to find the happy medium - and not just a practical compromise between the concerns of our central banks - nothing would have been accomplished. What can I say to you know by way of farewell? There is little point in giving you the “final score” at this stage - the match is not over yet ... Recommendations on how to cope with the challenges which are looming on the horizon? You will deal with them effectively, I am convinced, without my advice. But perhaps you will accept some reflections on the ability and the limits - of monetary policy to meet the expectations of our fellow citizens who, while appreciating the confirmation (or renewal) of price stability, are looking for stronger growth and, above all, more jobs. I share their concern unreservedly. The current level of unemployment in the majority of our countries is ethically unacceptable; it is leading to the BIS Review 67/1997  -2-  erosion of the social fabric and, because of the waste it represents, it is a clear signal that the economy is not functioning properly. Reducing unemployment must be the prime objective of action by the authorities. But what should be the role of monetary policy?
I trust this regulation will be approved shortly, in accordance with the objectives set by the new European Commission, and that this taxonomy will finally provide us with a common definition of what may be considered “environmental” or “sustainable”. The role of supervisors – external initiatives As supervisors, we clearly have responsibility for urging on these changes. We need to be proactive; in particular, we need to enter into a dialogue with banks to analyse how they are incorporating environmental risk. At the Banco de España we are intent on pressing ahead with this dialogue. Let me mention just a few examples of recent steps taken. To assess the level of preparation for environmental risk, we conducted a survey among the 12 banks directly supervised by the SSM and several other smaller banks. Subsequently we discussed the survey findings with the participating banks, conveying to them the importance of this issue and the supervisory expectations. According to the survey findings, many banks that were already explicitly considering environmental risk have included it in their social responsibility areas. Almost all have a team dedicated exclusively to Sustainable Finance and some also indicate that they have established specific committees, reporting in some cases to the Area General Manager or Corporate Secretary and in others directly to the Board of Directors. 4  In general, the Green Bond Principles are updated once a year, to reflect the latest market developments.

Accordingly, we should conduct this process carefully and gradually if we wish to minimise any undesirable economic and social consequences. The goal is to achieve what has been dubbed “a fair transition”, affording due attention and support to those groups and geographical areas most severely affected by this process. Naturally, we should stress that the change of production model will also entail opportunities for economic agents. In any event, we should consider how banks may contribute to bringing about a decarbonised economy; ultimately, when we think about climate change we see particularly pollutant activities, from which banking is naturally missing. I shall try to explain today why, despite being a “low emissions” sector, banks have a major role to play as facilitators of change. If I manage to do this I hope that I will also, at the same time, dispel another doubt that many of you will have entertained: what is the Deputy Governor of the Banco de España doing opening a forum on the decarbonisation of the economy? 3/9  Combating climate change internationally As you know, combating climate change has been a recurrent goal of international institutions, at least since the United Nations Summit in Rio de Janeiro in 1992. Traditionally, the companies dependent on oil products have been those most affected by the environmental regulations resulting from these international agreements. Conversely, we should admit that the financial sector’s involvement in this battle has been rather limited. When referring to the financial sector I include both credit institutions and central banks and supervisors.
What follows is a review of the situation of these stakeholders in relation to the desired risk profile of a typical bank.3 Depositors Deposit insurance ensures that it is not the business of depositors to worry about the amount of risk that the bank, in which he or she has deposited his money, decides to take. A key lesson of the Great Depression was that deposit insurance is a socially justified feature of the banking system. This follows from the fact that banks are institutions vulnerable to bank runs, no matter how well they are managed. The principle of deposit insurance is widely accepted and I will not further question it. Yet, the extent of deposit insurance and the form of its financing are important questions. Recent history has refocused our attention on these matters, but these are not the issues I would like to deal with today. Shareholders The incentives for shareholders differ from those of depositors. At first sight shareholders, as ultimate owners of the bank, can be counted on to discipline risktaking by the institution they own. After all, they stand to lose their entire stake if the risks taken lead to bankruptcy. However, this is only true to a limited extent. Indeed, if we go beyond an initial, superficial consideration of the situation, we soon realise that shareholders cannot be expected to discipline risk-taking by a bank. There are a number of reasons for this.

Clearly, a managerial remuneration scheme which depends exclusively on the bank’s current performance places managers in a situation similar to limited-liability shareholders. They cash in on lucky gambles but bear few of the negative consequences of unlucky ones. Unless we are willing to question the notion of limited liability for managers (as does Kotlikoff, 2010, for example), this kind of consideration provides the rationale for regulating managerial remuneration, and in particular for imposing long waiting periods before managers can cash in bonuses.5 A very careful design of managerial payment structure is needed if we want to ensure that the risk decisions of self-interested managers are in line with the longterm interest of firm owners and society.6 Bondholders Let me now turn to the issue of whether bondholders – the final stakeholder group – contribute to a balanced weighting of risk and return in a bank’s decisions. Under normal circumstances, discipline arises through the possibility and reality of default and eventually bankruptcy. Bondholders who are deprived of the upside potential of the risks taken by the bank and lose part (or all) of their stake in the event of default can be counted on to ensure that the negative consequences of the risky gambles taken by the bank are given proper weight. Indeed, the cost of debt increases with additional risk-taking, thus reminding managers and shareholders of the downside of the risks they are naturally inclined to take.
The Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate should it become necessary to further address risks of too prolonged a period of low inflation.” With this statement, the ECB has left no doubts about its resolve to avoid any downward turn in the euro area inflation developments, because such developments would be extremely harmful. With interest rates at their effective lower bound and persistently timid growth prospects, lower than expected inflation rates would increase the real value of debt, slowing down the deleveraging process of borrowers, both public and private. If a low inflation outlook became entrenched in the expectations of firms and households, the real interest rate would rise, leading consumers and investors to postpone their expenditure plans. A vicious circle of lower demand and lower prices could ensue. How would the ECB react, should the risks of a protracted period of low inflation materialise? But what exactly could the ECB do in the face of a protracted period of low inflation and economic stagnation? As I have already mentioned, the ECB stands ready to deploy additional unconventional instruments, should the likelihood of this scenario increase. The policy response would involve a broad-based asset-purchase programme. The experience of other countries with such programmes testifies that they can be effectively designed.

However, what is quite certain is that the size of structural change required will be large, comparable to what Thailand experienced during the economic liberalization of the 1980s and 90s. This change, almost by definition, will not be easy. If Thailand overcomes this hurdle, it will benefit from exporting more goods, possibly more hi-tech, to the region while becoming part of the regional supply chain and enjoying a greater range of imports. But while the domestic outlook appears positive, the global environment remains uncertain. The lingering euro debt crisis and fragile US recovery continue to weigh on global growth. Why? Current technical solutions do not address deep-rooted long-term problems. As a result, resolution has been delayed, adding to uncertainty. Moreover, the longer the delay, the more interest rates and fiscal stimulus in both the US and euro area will be pushed to new limits. The tightened policy space means that new shocks will be hard to manage and could derail the ongoing recovery. In my view, it appears that the global economy currently lacks the clear leadership especially in regards to getting the advanced economies out of the woods. Countries which had previously provided the leadership for global macroeconomic management through, for example, the International Monetary Fund, are now caught in the dilemma of solving their own economic problems versus choosing policy options for the greater good of the global economy. This is a separate issue deserving of its own discussion.
The pool of such property increases every time that a major user of space moves into new offices and releases its former premises. While some of the better quality secondary property can be refurbished at an economic price and relet, much of this stock may never again be relet for its present use and may not lend itself readily to conversion for alternative uses. This will continue to exert a dampening influence on the market, and imaginative solutions will be needed. The Future 14 So, the market may be improving but it is still not easy. How is the market likely to develop over the next eight years? What will I be saying if you invite me back in the year 2005? 15 As we all know, the property market has, historically, moved in cycles. Some, notably RICS, have done work to develop our understanding of these cycles. The economic cycle itself is clearly one of the driving factors, though it is clear too that property is subject to its own fluctuations and its own step changes. Contributing factors include the strength of tenant demand, the activities of developers and the willingness of lenders to finance investment and development. 16 My story in the future could be similar - perhaps depressingly similar - to my review of the recent past. Many of the ‘ingredients’ that contributed to the last cycle are certainly present now.

The enthusiasm and momentum for them is apparent both from what the market tells us and from recent surveys. A clear message from our wide range of property contacts is that greater liquidity is essential if commercial property is to remain attractive as an asset class. There is equally a clear message that successful development of securitisation and derivatives will not on its own be the saviour of commercial property. But without it property will not turn in a performance which can stand comparison with competing assets. We need a mature, liquid cash market in property with a healthy derivative market to permit successful management of risk. These are essential characteristics of efficient markets which are necessary for efficient use of property by users as a factor of production. Without such a development there is a risk that the costs of doing business in the UK will be uncompetitively high. I do not know how, or indeed whether, the obstacles to the development of such markets can be easily found. But I regard these issues as nationally important. Conclusion 22 So, what is likely to happen in the next eight years? Let me sum up my vision. 23 The current strong commitment to keeping inflation in check will create conditions more conducive to rational long-term decisions. Commercial property is still to a large extent a longer-term asset and should benefit from this environment.
Overall, the war in Ukraine has a strong effect on economic sentiment and increased considerably the risks to the economic growth outlook which are now skewed to the downside. According to the April IMF forecasts, euro area GDP growth in 2022 is revised down to 2,8 per cent, from the previous projection for growth of 3,9%. A 1.1 percentage points reduction in expected GDP growth. However, there are still factors supporting economic activity and recovery, such as the reopening of the economies after the crisis phase of the pandemic, strong labour market underpinning incomes, and households' accumulated savings from the pandemic period which support consumption. The labour market in particular, has sustained its recovery momentum, with unemployment falling to a historical low of 6,8 per cent in February 2022. Job postings across many sectors still reflect strong labour demand. Whereas the war caused GDP growth to be revised downwards, a parallel impact is that it has also intensified the upside risks surrounding the inflation outlook, especially in the near term. Based on the same IMF forecasts, euro area inflation in 2022 is expected to reach 5,3 per cent, compared to 1,7 per cent projected by the IMF back in October 2021. Core euro area inflation, as measured by HICP excluding energy and  1/5  BIS - Central bankers' speeches  food rose from 2,7 per cent in February to 3 per cent in March 2022 with an increase in the sectoral inflation rates for both non energy industrial goods and services.

The applied monetary strategy of targeting the foreign exchange rate proved successful in maintaining low and stable inflation, that is, at the level of inflation in Germany, i.e. the level of the Euro area. So, the competitiveness of the economy is not created through the exchange rate, but it should lay on sound fundamentals that will generate long-term sustainable growth. Despite the direct effects of the entry of foreign investment from the aspect of foreign exchange inflows, they created the potential for the Macedonian economy both in terms of reducing unemployment and in terms of transfer of know-how towards integrating local companies in international trade networks. Thus according to the Survey, an encouraging fact is that the respondents indicate presence and quality of local suppliers. The involvement of local companies in the chain of suppliers of major export capacities means true valorization of the secondary effects of the FDI inflow. Also our expectations are towards further valorization of the positive effects of the structural policies that boost the competitiveness of the domestic economy. The macroeconomic policymakers should seek to improve the worst-rated local conditions, according to the respondents’ opinion. Although some of them noted some progress in 2013, there is still room for their improvement. They relate to the improvement in the payment discipline, increasing the legal certainty and improvement of the public administration capacity, enhancement of the labor force qualifications in line with market demand through measures in the education system.