samchain/econo-pairs-v1 huggingface dataset:
Research on this problem was one of the reasons that Finn Kydland was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2004, along with his US co-author Edward Prescott. 4. In practice, monetary policy moved to inflation targeting in 1999, when Norges Bank changed its monetary policy strategy in order to maintain a stable exchange rate. Norges Bank  Economic perspectives 2023  5  The experience of the 1970s also prompts many countries to change their views on the appropriate orientation of fiscal policy. There is less emphasis on fiscal policy as an instrument of economic stabilisation and more emphasis on fiscal sustainability. A number of countries introduce rules that place limits on government spending. Norway adopts the fiscal rule, which is designed to address long-term fiscal policy considerations but at the same time provide flexibility in helping to stabilise the economy. If a fall in demand triggers a severe economic downturn, reducing the policy rate is not always enough. Fiscal policy can then make a contribution. And when there is little spare capacity and inflation is high, it is advantageous when monetary policy and fiscal policy act in concert. At the same time, monetary and fiscal policy differ in their effects. The policy rate affects the economy broadly and primarily impacts aggregate demand. Fiscal policy measures can, within budgetary limits, be more targeted when groups or sectors are hit especially hard. Economic stability also depends on a well-functioning wage determination process. Wage determination in Norway is highly coordinated.

2023  Economic perspectives Annual address by Governor Ida Wolden Bache to the Supervisory Council of Norges Bank  Thursday 16 February 2023  Economic perspectives 2023  This is a day I have been looking forward to for some time. At long last, we can hold this event as it should be held – at our traditional Norges Bank venue filled to the brim. Three years have passed since last time – three years less ordinary. We have endured a pandemic and the most restrictive measures seen in a time of peace. We have witnessed Russia’s brutal war campaign against Ukraine. The war is a deep tragedy for the people of Ukraine and a dire threat to peace and stability in Europe. Both the war and the pandemic have had far-reaching economic consequences. Over the past year, inflation has reared its head, with inflation rates reaching multi-decade highs. The costs of high inflation have come into clear evidence. What started as a rise in a few prices ended up as a rise in a broad range of goods and services prices. Rapid and unexpected price increases are eroding peoples’ finances and are impacting those with small margins hardest. The surge in inflation is also putting monetary policy and Norges Bank to the test. It is our responsibility to bring it down. That is something I have been mindful of during my first year as central bank governor. The 1970s – high and variable inflation Let us go back in time 50 years.
It is analogous to physical capital, like equipment, buildings and property, or to human capital, like the accumulated knowledge and skills of workers,6 or reputational capital, like the franchise value or brand recognition.7 Cultural capital is an input into a firm’s production process—impacting how it does its business. Cultural capital is an intangible asset. That is, we generally experience the impact rather than the thing itself—but its impact can be measured, assessed, and ultimately influenced. For example, in an organization with a high level of cultural capital, misconduct risk is low and observed structures, processes, formal incentives, and desired business outcomes are consistent with the firm’s stated values. The unspoken patterns of behavior reinforce this alignment. Problems are escalated to senior managers routinely, as employees feel empowered to raise their hand and believe that their efforts will result in meaningful responses. And senior leaders advance through the organization because, in addition to strong business performance, they set a credible tone from above by modeling behaviors consistent with the firm’s values. By contrast, consider some characteristics of an organization with low levels of cultural capital.

While rules-based frameworks are easier to enforce and do not require recurring justification of explicit decisions once in place, a purely rule-based framework can be too constraining and rigid. The inherent rigidity reduces policy space for policymakers to maneuver in times of stress. On the other hand, while a discretionary, principle-based framework accords policymakers the necessary flexibility and space to maneuver, there is a risk that policymakers may overstretch this flexibility. Perversely, there is also the risk of inaction by policymakers. I have always viewed policy making as akin to designing an earthquake-proof building, whereby the stability of the building (the economy, in our context) is not achieved by increasing rigidity, but by allowing flexibility. This pertinent question of rules versus discretion is one that we should continue to ask ourselves. Question 3: Dealing with large capital flows: proactive or reactive? Third, in dealing with risks emanating from large capital flows, is it better to be proactive or reactive? Should policymakers pre-emptively lean against the wind to tackle capital inflows 2/3  BIS central bankers' speeches  before it manifests in the build-up of domestic imbalances, or should we take a more reactive stance by tackling domestic vulnerabilities and manage the fall-out from capital inflows? Being reactive may be too late, but pre-emptive measures may be viewed negatively. I recognise that I have raised more questions than answers in my remarks this morning.
To prevent these problems from getting out of hand, our country’s development should be undertaken in a way that does not place importance on GDP growth at the expense of all else, but aims to strike a balance between GDP growth and the preservation and conservation of natural resources and the environment. Rapid development should not be undertaken unless the environment and natural resources are able to sustain and support such development. The public needs to have greater interest in resource management, particularly water management, in order to allow sustainable use, alongside the growing needs from agriculture and industry. We need to restore nature and the natural balance of the environment, which can thrive in parallel with the growing economy, increased tourism demands, as well as improved living standards for all Thais in general. Hence, in order for economic development to continue in the right direction, development should not be measured solely by GDP growth, but by other development indicators as well. There has been increasing discussion on the concept of Green GDP, although this has not yet been put into practice. [In Bhutan, instead of adopting traditional GDP measures, the Bhutanese have adopted “Gross National Happiness”, or GNH as their development philosophy. In recognition that human happiness is a composite of both the material and non-material needs, GNH is meant to address this. GNH is a more comprehensive measure that incorporates economic development, environmental preservation, cultural promotion, and good governance.]

It is a shame that such an understanding of the intricacies of development and human satisfaction are not more widely understood and appreciated. As for Thailand, we may begin to foster this philosophy through adopting a more diverse array of measures of development and success. Agencies such as the NESDB should publicly announce and raise awareness of the diverse aspects of development, success, and prosperity. For example, these indicators can include rates of water accumulation for use and amount available in reservoirs each year, the number of villages that face water shortages each year, increase (or decrease) in forested areas, ratios of industrial factories with substandard water treatment procedures, oil dependency ratios of the industrial sector, or teacher-to-student ratios, to name a few. Our country’s leaders need to commit to certain goals and targets that are clearly and publicly announced. The public’s perception that growth and development is reflected only in growth of GDP should be corrected. Listening to me today, I am sure many of you may think that my visions are only a dream that will be hard pressed to find their way into reality. I do admit that many of these proposals will be difficult to put in place in practice, but they are not impossible. They are actions which we need to push towards, and  4  BIS Review 43/2006  at the soonest. I have discussed these issues in other venues and fora and with many positive reactions.
Banks recognised a substantial counterparty risk in lending to each other, given that interbank lending was generally unsecured. But, even if collateral was taken, the ability to liquidate it at a reasonable price was severely impaired in an environment of widespread fear and uncertainty. Bank positions in the interbank market can be highly persistent. Large diversified banks tend to be borrowers and smaller, regional banks lenders. When the financial turmoil erupted, persistent borrowers endured a sharp and sustained jump in their funding costs and many of them had no access to markets at all. When Lehman Brothers finally filed for bankruptcy in mid-September 2008, widespread financial panic broke out. The paralysis of transactions spread beyond the money markets, where it had been more or less confined for a year. Outside the money market, dealers play a critical role guaranteeing market liquidity. But in order to be able to take positions on both sides of the market, they need to finance their securities positions via collateralised funding. For that, they need their own capital, which they can use to pay for the margins required by those who lend them securities. When confidence evaporates, margins increase and dealers’ capital is eroded, so that their ability to trade as buyers is restricted. Markets lose a critical actor, assets become less liquid, and the value of assets declines further. Having tasted the forbidden fruit of excess risk-taking, financial institutions were cast out of the paradise of seamless financial markets.

With hindsight, the “original sins” of Economic and Monetary Union, an otherwise carefully thought-through and consistent project, were weak fiscal institutions, tolerance of economic imbalances and the lack of an integrated mechanism to supervise and resolve banks. As a matter of fact, financial fragmentation has led to a “two-gear” monetary union, in which the marginal cost of borrowing for banks varies according to the jurisdiction. 4  BIS central bankers’ speeches  1. Banks belonging to jurisdictions considered by markets as financially sound can generally access the interbank money market and get overnight financing at the EONIA rate, which is currently as low as 0.10%. 2. Banks in jurisdictions where risks and uncertainty are elevated generally have limited access to the interbank money market and rely to a large extent on central bank liquidity, charged at the MRO rate, currently 0.75%. The distressed funding conditions faced by banks in some parts of the euro area, compounded by expectations of a worsening macroeconomic outlook, have in turn resulted in fragmented credit conditions for households and firms, again along national borders. For one thing, credit supply standards applied by banks in their lending to the real economy have diverged across euro area countries. A similar message comes from the cross-country comparison of bank lending rates.
First individual companies had to be rescued, then the banking system, and eventually the whole economy. Conventional thought held that there was little that policymakers could do after reaching the zero bound – when the central bank’s policy rate hit zero. But the FOMC thought otherwise. By mid-2009, the gross domestic product (GDP) in the U.S. began to recover after contracting 4.3 percent. Progress was painfully slow. GDP eked out 1.3 percent growth in the third quarter and put the U.S. back on a growth path. Meanwhile, the labor market lagged. The unemployment rate was 9.6 percent, employment growth was still out of reach, and real wages were falling. The labor market is central to FOMC deliberations. While most other  BIS central bankers’ speeches  1  central banks, including Banco de México, are legally bound to only ensure price stability, U.S. policymakers are charged with a dual mandate: ensuring price stability and maximum employment. By the middle of 2009, the jobs deficit (jobs lost since the prerecession peak in employment) was 8 million and rising. Thus, we embarked on an aggressive path of quantitative easing (QE), launching large-scale purchases of U.S. Treasuries and mortgage-backed securities and U.S. housing agency debt. The first round of QE ran until March 2010, when the labor market had finally started recovering. By the conclusion of QE1, the Fed had infused the economy with $ trillion in liquidity. Second and third rounds of quantitative easing were announced in November 2010 and September 2012, respectively.

And Governor Carstens’ predecessor, Guillermo Ortiz, is an advisory board member of the Dallas Fed’s Globalization and Monetary Policy Institute. The Federal Reserve Bank of Dallas and the Banco de México enjoy a unique and mutually beneficial relationship. As Guillermo and Agustín well know, there is also a personal dimension to the Dallas Fed’s relationship with the Banco de México. I grew up in Mexico City in the 1950s, attending elementary school not far from here. Spanish was my first language in school. To this day, I have many friends in El Norte who say I speak better Spanish than I do English, although that may be due to my Texas accent. Either way, I always proudly tell them, “¡No hablo español; hablo puro mexicano!” This evening, I will do my level best to speak to you in español mexicano rather than in inglés texano. Unprecedented U.S. monetary policy As you surely know, and as I am happy to report, the Federal Open Market Committee (the “FOMC”), charged with crafting U.S. monetary policy, is winding down its extraordinary “quantitative easing” phase. The Great Recession demanded extraordinary policy, and the FOMC responded. Led by Chairman Bernanke, the FOMC met the financial crisis head-on in September 2007 and by the end of 2008 had lowered the federal funds rate to zero from 5.25 percent. Once the full force of the financial crisis hit, after the failure of Lehman Brothers, the federal funds tool proved insufficient.
If we add account-related revenues and interest rate and penalty fees from credit cards, the figures increase further. With this growth rate and potential revenue, it is no wonder that the retail payments market attracts so much attention. There are other factors that help explain why so much has happened over the last few years and that continue to drive the development. The rapid techno-logical development of smartphones, tablets, and high-speed Internet connection is one of the most important factors. Today, approximately half of all adults in the world have a smartphone and this share is likely to increase significantly. Some 40 percent of the global population use Internet. This technology is widespread and accessible at a reasonable cost and it has changed the way we shop. We purchase goods and services in new ways and because of this we also demand payment services that are suited to this new type of interaction. E-commerce is the prime example. This year some 38 billion e-commerce transactions will take place. We interact with e-merchants who we have no previous relationship with. We download or stream music and movies. We order taxis through a smartphone app. To maximize convenience, we demand tailored payment solutions increasingly often. Businesses are in a similar situation. In e-commerce the purchase is often aborted if the payment method is not quick and convenient enough. They want to be able to offer payment alternatives that customers want to use.

The possibility to create new access channels provides opportunities for nimble firms that are not banks to act as middle men and provide interfaces that facilitate the initiation of the underlying, more old-fashion payment. Remember that payment initiation services and third-party providers have been at the centre of the discussions on the new Payment Service Directive. These firms don’t compete outright with the banks and in some cases they may even directly cooperate with them. In other cases, the non-bank may compete directly with the banks. It may even have built its own infrastructure or account structure through which it processes payments. This is most likely in cases where the non-bank already has a kind of network that it can adapt and utilize for payments. Telecom operators and Internet service providers are examples of such firms. A concrete example of such a case is M-Pesa, the mobile payment service launched by SafariCom in Kenya. Initially intended for person-to-person payments, it quickly became a success and a platform for a number of financial services. Non-banks can also act as suppliers of services to the banks, e.g. payment switches routing the payment information or the outsourcing of back-end services such as the operation of large IT-platforms, etc. These are all essential inputs for payment intermediation. Because non-banks can enter the payment process in so many places, we have longer and more complex payment processes with more actors involved. Banks, at least for some type of payment services, have less direct contact with the end-users.
More recently, the bursting of the technology and telecommunications bubbles, the wave of scandals that hit corporate America and the uncertainties in the US economy have led to a general decline in stock markets worldwide. This in turn provided fresh impetus for hedge funds as investors searched 3 for absolute returns. As one commentator put it, “Where else are they going to put their money?” . And the maths is compelling. From 1987 to 2001, the Hennessee Hedge Fund Index posted annualised returns of 18%, higher than the S&P’s 13.5%. 1  Brooks, C. and H.M. Kat, 2001, “The Statistical Properties of Hedge Fund Index Returns and Their Implications for Investors”. 8th Annual Hennessee Hedge Fund Manager Survey, 2002. 2  Financial Stability Forum, 11 Mar 2002, “The FSF Recommendations and Concerns Raised by Highly Leveraged Institutions: An Assessment”. 3  F-Times News, 10 Sep 2002. BIS Review 52/2002  1  The growing demand for hedge fund products has wrought changes on the supply side of the market. The prospect of untold riches has spurred on many former fund managers and proprietary traders to strike out on their own and set up new hedge funds. This year’s ranking of top 100 hedge funds by Institutional Investor magazine included several funds founded by “Tiger Cubs”, former employees of Tiger Management. Investors now have a wide array of hedge funds to pick from, instead of only a few prominent ones previously.

The SNB will announce the precise issue dates well in advance. Page 3/3
Whatever happens, we have to achieve our primary mandate: price stability. DIE ZEIT: "Not all Germans believe in God, but all in the Bundesbank", Jacques Delors once said. The Mark was extremely popular. The euro isn't yet. What went wrong? Trichet: The euro is as stable, as credible, as a good store of value as the Mark was. And look at the figures: More than 12 million jobs have been created in the euro area since 1999 many more than in the eight years before. And around 2 million more than the US have created in the same period. Certainly, that has also a lot to do with the structural reforms that we have to continue implementing actively. But stable prices are a necessary condition for sustainable growth and job creation. DIE ZEIT: Beyond all political differences there was always an economic consensus in Europe: freedom for goods, services, labour and capital. Now the French President Nicolas Sarkozy attacks the European principle of free competition, and also European institutions, especially the ECB. What holds Europe together? 2  BIS Review 85/2007  Trichet: We live in a world of very rapid changes, thanks to science and technology, thanks to globalization. There are major changes in the division of labour. And there is a temptation in particular nations to turn the EU and the ECB into scapegoats. This is not fair. The European construction has helped us to create a level of prosperity, which has played an important role in reuniting Europe. Our values are clear.

We are very attached to this methodology which permits the Governing Council to cross check the economic analysis and the monetary analysis with a view that the latter gives valuable information on risks from medium to long term. And we are permanently improving both analysis. DIE ZEIT: Markets are worried about the Sub-prime crisis in America. Are you worried as well? Trichet: The global economy remains very prosperous. On the particular sub-prime mortgages issue as well as on other US issues I entirely share the view of the Federal Reserve which has been fully vindicated. BIS Review 85/2007  3  DIE ZEIT: The definition of price stability is below, but close to 2 percent. In the last eight years the ECB failed seven times to deliver an inflation rate below 2 percent. The average stands at 2,05. With a symmetric target around 2 percent the ECB would be King. Trichet: Our definition is below but close to 2 percent in the medium term. It is exactly the same as in Germany and in other countries before the euro. I am not satisfied with the overall average but one has seen that we had to cope with increases in the price of oil and commodities, in particular that have been very significant. What is extremely important is that the inflation expectations are solidly anchored at a level in line with our definition. 4  BIS Review 85/2007