samchain/econo-pairs-v1 huggingface dataset:
This is around 0.2 percentage points higher than forecast in the Bank’s May Inflation Report. This pick-up in wage growth is welcome. Indeed, this rise is a necessary ingredient for getting inflation back to target in the period ahead. Equally, were wage inflation to continue to surprise to the upside as the labour market tightens, this could pose an upside risk to inflation, with corresponding implications for the MPC’s monetary policy stance. 8  8  See Bunn and Rostom (forthcoming). BIS central bankers’ speeches  It is important also, however, to place this wage news in context. This most recent upside surprise comes against a backdrop of wage growth having surprised to the downside for much of the past two years. Up until last month, wages had surprised to the downside in 11 of the past 18 months. That has left the level of regular pay in the economy 2% lower than we expected 18 months ago, even with the recent news. Second, one explanation for the recent weakness of wages has been the compositional effects of a greater number of lower-skilled, lower-paid workers entering the job market. This has clearly had some, probably temporary, depressing effect on wage growth. Over the postcrisis period as a whole, however, compositional effects have not depressed wages. Rather, they have inflated them. Without composition effects, the level of wages today would be around 1% lower, not higher.

A detailed review of the collection shows that both Spanish and foreign historians have collaborated in the project, covering an agenda that includes modern and contemporary issues. Although the collection is open to all kinds of quality research, monetary and financial topics predominate. Now, I would like to say a few words about our library, which has played a key role in our economic history studies and research. It was set up in 1931, and from the first half of the 1970s professor Rojo promoted the formation of a highly specialised library, stepping up the acquisition of new collections and the modernisation and expansion of its services. 3/4  The most prized section of the library, the so called Fondo de Especial Valor, comprising more than 16.000 pieces from the 14th to the 19th centuries (now in the process of digitalization), is a testimony to economic thought and practice in Spain and Europe; its content encompasses 16th century merchants’ instructions, writings of the School of Salamanca, the publications of the 17th century arbitristas and the works of 18th century Enlightenment thinkers. The collection of royal decrees and proclamations (around 4,000 documents, including the 1745-1796 compilation ordered by the Count of Campomanes), dealing mainly with fiscal, mercantile and monetary matters, enriches the library’s scope with the perspective of legislation topics. The fact that these collections are complemented by others, such as the Goldsmiths’-Kress Library of Economic Literature and the King’s College collection of the papers of J.M.
The second challenge relates to the set of fiscal exit strategies that would put fiscal policies around the world on a sustainable path. In many countries, including the United States, budget deficits have widened sharply and the level of public debt is growing faster than gross domestic product (GDP). This trend is unsustainable. The third challenge is how to rebalance global consumption and investment to support continued strong growth in the emerging world and a sustainable recovery elsewhere. In my view, sustainable global growth requires a shift toward a higher consumption share in the emerging world matched by a shift away from consumption in the United States. These three challenges are interlinked. Without regulatory reform, we will not have the robust and resilient financial system that we need to match savers and borrowers around the world. Without fiscal consolidation, financial market participants will balk at providing the funds needed to close the gap between government revenue and spending. In addition, without rebalancing the composition of global demand, long-run economic growth will likely be weaker. Weaker long-run growth will lead to excessive unemployment and less government revenue, which, in turn, will make it more difficult to put fiscal policies on a sustainable course. Turning to the first challenge of regulatory reform, the key issue is how to ensure that we take the right steps so that the type of financial crisis that occurred never happens again. From my perspective, I have several concerns about where the regulatory reform process is heading.

These firms are able to obtain funding on more attractive terms because debt holders expect that the government will intervene rather than allow failure. This creates an incentive to get large to achieve such status, not because it facilitates greater efficiency, but instead because the implicit government backstop enables the too-big-to-fail firm to achieve lower funding costs. Although the United States has an effective resolution mechanism for commercial banks, we do not yet have a good resolution scheme for large non-banking institutions or bank holding companies with large international operations. To address the too-big-to-fail problem, we need to develop a truly robust and credible resolution mechanism that allows for the orderly wind-down of any institution – regardless of its size – and that limits the contagion to the broader financial system. This will require not only domestic legislation, but also extensive work internationally to address a range of legal issues involved in winding down a major global firm. I want to emphasize how important it is that the incentives we embed within the regulatory apparatus for financial intermediaries encourage the type of behavior we seek – behavior consistent with safety and soundness and financial stability. For example, consider the efforts underway to standardize OTC derivatives and move the clearing of such trades to central counterparties (CCPs). These are good and worthwhile efforts.
19  Chart 12 shows a summary measure of these indicators of domestically-generated inflation, based on the 20  common volatility across these indicators. Two features stand out. First, there is clear evidence of a slow build in underlying inflation pressures in the UK economy since around 2015, as slack has been absorbed. Since then, domestically generated inflation has risen by around 0.5 percentage points. But, second, this nominal build has been very slow, despite rapid falls in unemployment. Underlying inflation is estimated to be around the same level it was in 2013. That leaves it around 0.7 percentage points below  19  While they will strip them out to some extent, these measures are not completely immune from external factors, such as changes in the exchange rate or commodity prices. 20 Technically speaking, it is the first principal component of the Bank’s range of domestically-generated inflation measures. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  the level consistent with hitting the inflation target. 21  If it rose at similar rates to the past few years, during  which slack was being eroded sharply, underlying inflation would still take another three years or so before it reached target-consistent levels. As past rates of erosion in slack are unlikely to be replicated over the next three years, this suggests there could be downside risks to hitting the inflation target, unless the Phillips curve reasserts itself or nominal momentum in the economy picks up in the period ahead.

15  Inferred from Bradley (2016), using the mean pay of the self-employed compared to employees. Hamilton (2000). 17 Gardiner (2016). 18 Because self-employed workers are not included in statistical measures of average weekly earnings, the self-employed effect would not have shown up arithmetically in this wages measure. But there will still likely be general equilibrium effects on wage-setting in the economy for those who earn a salary. 16  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  A final piece of evidence, albeit indirect, comes from historical data. The move towards greater self-employment and less unionisation is, in some respects, a shift back to the future in the nature of work. Prior to the Industrial Revolution, and indeed for some years after it, most workers were self-employed or worked in small businesses. There were no unions. Hours were flexible, depending on what work was needed to collect the crops, milk the cows or put bread on the table. Work was artisanal, task-based, divisible. st  While the read-across to work patterns in the 21 century is far from exact, there are some parallels. That being the case, one question is how wage- and price-setting behaviour operated during this earlier period of more “divisible” labour markets. Were any of today’s wage patterns evident then? The data we have on wages and output in earlier centuries are partial and imperfect, but nonetheless tell an interesting story.
Surveys of individuals’ choices with regard to labour supply, which take into account both taxes and various types of benefit, indicate that the forming of the benefit system may have a greater effect on labour supply than changes in the taxation system.4 Is it possible to say anything about the size of the present driving forces for increasing the labour supply? The most recent report of the Long-term Planning Commission and the National Institute of Economic Research’s most recent report on the Swedish economy both contain attempts to calculate the economic driving forces that can make individuals change their decisions regarding labour force participation. They are studying the driving forces that make people go between unemployment or sick  4  Kreuger, A. and Meyer, B. “Labour supply effects of social insurance”, NBER Working Paper Series 9014, National Bureau of Economic Research, Cambridge, MA, 2002. 6  BIS Review 64/2004  leave and work, as well as the driving forces that make people work slightly longer hours. Economic driving forces refers in principle to the effect on disposable income entailed in the change in labour supply, if one takes into account the effect of different types of tax, benefit and charge, in addition to direct wage effects. The starting point is that the driving forces are lower the smaller the difference in income is from changing status, or alternatively the less income one can keep after the increase in the labour supply.

Despite initial fears here in Switzerland, open and integrated labor markets between the EU and Switzerland have clearly given the Swiss economy a welcome boost in recent years. Indeed, private Swiss firms and even semi-public sectors like health care have reaped substantial benefits by drawing on the supply of large numbers of highly skilled immigrants from the EU member states and in particular from Germany. Moreover, this has not come at  BIS Review 87/2010  1  the expense of Swiss workers. Recent research actually suggests that the immigration from the EU during the last couple of years has narrowed the wage differential. 1 Immigrants have also been an important source of demand during the financial crisis. They are clearly one of the reasons why Switzerland’s economy has weathered the financial crisis relatively well. Indeed, Switzerland is one of the very few developed countries where private consumption remained a steady source of growth virtually throughout the entire financial crisis. 2 A particularly relevant benefit directly linked to the introduction of the Euro pertains to exchange rate volatility. After the introduction of the Euro and before the peak of the financial crisis in 2008, the average Euro – Swiss franc volatility was roughly 30% lower than the prevailing Deutsche Mark – Swiss franc volatility in the 1990. The compression in exchange rate volatility is significantly larger if one takes the Lira or the Peseta or any of the other peripheral European currencies as a reference point.
For me, the reason is that we have more work to do to develop the best tools to ensure continuity of access to critical insurance services. 2  BIS central bankers’ speeches  Why do I think we are short of tools? To explain my view on this requires some background on the resolution of banks. Statutory special resolution regimes for banks like the one adopted in the UK in 2009 have at their heart the power to alter property rights, the power to separate the business of a company from its owners, albeit with safeguards against unfair expropriation. It is a very powerful tool, and one that should be used carefully for that reason. For banks a typical use of the resolution regime is because depositors can lose confidence in their ability to have access to their funds, and thus a run can start which brings down the bank. A resolution regime can bring order to that process. For insurers, policyholders are less likely run in the sense that they can withdraw their contract and take it somewhere else, though it is possible for some life contracts to be surrendered without penalty. Unlike money, insurance contracts are not fungible because the cover is specific to the contract. In the limit, a bank depositor can exchange their claim on the bank (commercial bank money) for a risk-free claim on the central bank (by requesting bank notes). An insurance policyholder cannot do this.

The level of investment is assumed to increase somewhat in 2006 and remain high next year, before declining slightly the following year when Ormen Lange and Snøhvit are scheduled for completion. Continued high oil prices are expected to contribute to high investment both in exploration and in fields in operation in the years ahead. Information from our regional network suggests that petroleum investment is providing considerable impulses to activity in Norway’s coastal regions. According to the network, suppliers to the petroleum industry are expecting continued strong growth over the next few months. Statistic Norway’s investment intensions survey for oil and gas activities confirms the impression of positive expectations for 2006 and 2007. There are prospects for strong growth in the Government Pension Fund - Global. Given our assumption for oil price developments ahead (oil futures), spending in line with the expected real return on the Fund implies that the structural, non-oil deficit may increase by close to NOK 15 billion at 2006 prices in both 2008 and 2009. With a period of strong expansion in the Norwegian economy, somewhat lower petroleum revenue spending will be in line with the fiscal rule. Our projections are based on the assumption that fiscal policy will generate some stimulus to total demand and output in 2008 and 2009, but somewhat less than the expected return on the Fund would imply. Economic growth in Sweden, the UK and the euro area is high. Economic developments in China and India remain strong. GDP growth in the US and Japan has slowed.
In 2013 we overhauled the information compiled by the Central Credit Register, switching more towards a very complete granular database in order to strengthen our micro- and macro-prudential supervisory mechanisms. We are also fortunate to have, since the eighties, an exhaustive database of the annual balance sheets and the profit and loss accounts of Spanish firms (the so-called Central de Balances), whose inception was one of the landmarks as far as the set of statistics produced by Banco de España is concerned. The database also contains a very valuable sample of firms voluntarily providing quarterly information. Moreover, the balance of payments and the international investment position have been historically produced by relying on mainly micro information. And from the outset of this century we have conducted every three years (which will be every two years in the future) a wave of the Survey of Household Finances, which offers a very rich picture of some of the key economic and financial decisions taken by Spanish households. All this micro information helps the Banco de España perform our functions and allows us to address flexibly both analytical work and statistical compilation, under our multi-purpose remit. Moving towards a statistical landscape broadly relying on micro data requires deep changes in a number of processes. As automation is of the essence, new techniques need to be used to manage these data (including the necessary quality checks) and staff skills have to be upgraded accordingly.

In this WG, key players will reflect on ways to provide access to private data while maintaining and promoting ethical principles. In fact, I consider there is a need to break the quasi-monopoly which some big techcompanies have on personal data, something which requires a co-ordinated international effort. The European data strategy announced by the European Commission a few months ago, aimed at public/private-sector collaboration in data-sharing, is a good example in this respect. It is also important to recall the usefulness of statistical information for public opinion. Central banks’ information is quite often of a very technical nature. But, at the same time, some variables –such as interest rates- have a strong impact on household finances and SMEs, whereas information about recent developments on key economic and financial variables are also very relevant for public opinion. Therefore, accessible (transparent, clear) statistics are also needed. 6  In our case, we are continuously striving to improve how statistics are conveyed to society and to adapt our communication to different types of users. A couple of years ago we conducted a survey of the users of our statistical information. The results offered a useful guidance about some key issues. Following the input from this survey, we have in recent years tried to exploit new technologies to display data, including more charts, interactive menus, dashboards, etc. And just a few days ago we launched an application which will allow users to have our statistical information readily available on their mobile devices.
Indeed, sound fiscal policies, combined with monetary stability aims based on strong financial institutions, and prudent regulations in technical areas such as accounting, provisioning and bankruptcy are valued and necessary companions to financial regulations such as the New Capital Accord. In my remarks today, I’d like to begin with a brief reminder of why bank supervisors and banks around the world believe that we need a “New Basel Accord.” Then, I’ll discuss the New Accord’s structure  BIS Review 52/2003  1  and share some of the latest news on what the Committee is doing to finishing the framework so that banks will be ready to implement it in the coming years. Finally, I’ll conclude with some thoughts on the transition to the New Capital Accord. Why we need a New Accord We might begin by recalling why we care so much about capital - and why we felt that we needed a new capital accord, which is the first topic I will address today. In many ways, supervisors view capital as the last line of defence in a bank. When risk management is insufficient, when reserves are exhausted, capital absorbs losses to prevent a bank’s failure. But when capital runs out, the bank may become insolvent, leaving public authorities and taxpayers responsible for restoring depositors’ savings. The challenge is determining how much capital is sufficient.

According to the same survey again, Turkey took the 7th place among European investors and was the 8th destination that international executives are most optimistic about the economic outlook. Lastly, I would like to touch upon the much-debated hot money issue pertaining to the financing of the current account deficit. Hot money has several definitions. The basic definition of hot money is the sum of foreigners’ purchase of securities, portfolio investments, short-term capital inflows and the net errors and omissions item. According to this definition, by April 2006, the annual hot money inflow has reached USD 17.3 billion. The most important component of hot money is portfolio investments composed of securities and government papers. Some outflow was observed, with the last fluctuations. However, the floating exchange rate regime and strong macroeconomic fundamentals reduce the negative impacts of the outflow. The structural transformation process that the Turkish economy is undergoing is very important with respect to the sustainability of higher current account deficits. We are happy to see that within the framework of the transformation process, the finance sector is much stronger. In other words, open positions in the banking sector are fairly limited. Nevertheless, the private sector should be very careful about open positions. Secondly, macroeconomic fundamentals grow stronger every day and a tight fiscal discipline and monetary policy are being implemented. We have a high level of foreign exchange reserves. The floating exchange rate regime has a shock-absorbing ability.
These international funds are generally highly alert to shifts in the expectation of risk, return and liquidity. They can therefore be highly volatile, with the tendency of reversing direction whenever there is the slightest hint of trouble, in respect of the macroeconomic policies, in particular financial policies pursued by governments, the robustness of the financial markets in which they operate, the soundness of the financial intermediaries with which they deal, etc. 8. Those economies which are dependent upon such capital inflows are clearly vulnerable to their reversal. Ideally therefore they ought to pay a lot of attention to pursuing sound macroeconomic policies and be transparent about them. This has perhaps proven to be politically difficult to achieve in some cases. They also need to ensure that they are in a position to deal with the volatility that characterizes the flow of international capital. And this means having: first, an effective monetary management mechanism that is capable of delivering currency stability; second, a regulatory and supervisory framework that safeguards the integrity of financial markets and the financial intermediaries in accordance with internationally accepted standards; and third, a robust financial infrastructure that enables financial transactions to be conducted efficiently and with a minimum of risk of failure. 9. This is a tall order, even for a relatively closed financial system that operates under more benign circumstances, not to mention for a newly liberalized financial system under stressful conditions.

Dimitar Bogov: Promoting Macedonia’s cultural and historical values Opening speech by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the opening of the exhibition titled “Wall Paintings from the Episcopal Basilica in Stobi” on the occasion of the International Museum Day, Skopje, 18 May 2012. *  *  *  Honorable Minister Kancheska-Milevska, Your Excellency, Ambassador Wohlers, Distinguished guests, This year we celebrate the twentieth anniversary of the monetary independence of the Republic of Macedonia, recalling with respect the period of creation of the Macedonian Denar and the processes that led to the proclamation of the monetary sovereignty of our country on April 26, 1992. Undoubtedly, this is an opportunity when it is necessary to say that in the past twenty years, the main carrier of these processes – the National Bank of the Republic of Macedonia, with all its capacity has adequately served the new democratic society, as an institution that is responsible for maintaining the stability of the Macedonian national currency and its monetary and financial system. Besides its primary activity, in the past 10 years, our institution has sought to continuously and systematically contribute to the preservation, care and promotion of cultural and historical values of Macedonia.