samchain/econo-pairs-v1 huggingface dataset:
6  Various annual reports of the Central Bank of the Philippines. The author is grateful to Deputy Governor of BSP, Diwa C Guinigundo, for making available those annual reports and other literature on the liquidation of the CBP. BIS Review 58/2009  5  As mentioned above, the net foreign assets of CBP became negative from 1981 onwards due to the depletion of reserves and the increase in foreign borrowings. They were negative by 4 billion Pesos in 1981. But, the negative position progressively increased thereafter rising to a peak of 141 billion Pesos in 1990 and recording at an annual average level of 101 billion Pesos during 1982-90. The result was the payment of interest surpassing significantly the interest receipts. The total such losses amounted to 91 billion Pesos for the period 1983-90. The net outcome of all these adverse developments was the decline in the net-worth of CBP to a dismal level of 2.6 billion by June, 1993 as against a total outside liability level of 605 billion Pesos and a domestic asset creation of 440 billion Pesos. The capital funds as a percent of domestic assets fell to an insignificant level of just 0.5% indicating that the entirety of the currency issue (monetary liability) had been backed by worthless domestic assets. By end 1993, the foreign exchange liabilities of CBP amounted to $ 11.4 billion or 35% of the Philippine’s GDP 7 . Thus, CBP became insolvent and had to be liquidated in July, 1993.

Jean-Pierre Roth: The euro – a stabilising factor in the international currency system Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Fondation Jean Monnet pour l'Europe, Lausanne, 21 September 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The euro is undoubtedly a success story. It has contributed to stabilising the international currency system. In Europe, the former monetary disorder has been replaced by a new monetary order. The European payment system has become more transparent and price stability is guaranteed. Switzerland, too, is benefiting from European currency stability. The Swiss franc is taking advantage of a monetary environment that is considerably calmer than previously. The euro and the franc are coexisting very successfully. Nevertheless, it would be wrong to claim that all the effects of European currency integration have already worked their way through to the real economy. In spurring on competition and promoting transparency, the euro is having an integrating effect. However, there are still considerable obstacles standing in the way of this integration process. BIS Review 103/2007  1
Another source of “drag” has been at work.3 Identifying those drag factors is important when accounting for disinflationary trends in the past, but also when assessing whether these trends will persistent in the future. The drag If you consider the traditional determinants of inflation, there are at least three plausible sources of disinflationary “drag”: slack in the economy, a weaker relationship between slack and wages and lower levels of inflation expectations. These explanations are not mutually exclusive. Higher levels of slack, or a weaker relationship between slack and wages, could lower inflation expectations – for example, if demand is weak today, people may expect lower inflation tomorrow. And lower wage and inflation expectations could themselves depress demand – for example, by raising levels of real interest rates. Nonetheless, it is worth considering these explanations in turn. (a)  Slack and the Phillips Curve  The short-term relationship between unemployment or the output gap and wage growth or inflation – the Phillips curve – is one of the most intensively studied in macro-economics.4 Despite that, empirical estimates of the Phillips curve have tended to be poorly-identified. That may reflect the effects of structural and behavioural shifts, which have the potential to alter historically-estimated Phillips curve relationships. For example, changes in the credibility of the monetary policy regime can cause inflation and wage expectations to alter, causing the Phillips curve to shift around over time for a given level of slack.

(X)  Bank behaviour  It can be expected that the following trends, observed in the previous part of the current year, will continue into 2010: (1)  stagnation in high foreign sources of financing (standing at EUR 10 billion, of which about EUR 2 billion represents short-term inflows from parent banks in late 2008, which remained in the country throughout the year) and a very slight increase in domestic deposits (by 3.2%, suggesting that there is no potential for any significant strengthening of banks’ credit activity;  (2)  gradual extension of the maturity structure of both foreign sources (62%– 68%) and domestic ones (73%–77.4%), which is good in terms of safety, and facilitates longer maturity placements, but these sources are more expensive;  (3)  an increase in the foreign-currency portion of reserve requirements (71%– 76%), which also magnifies the currency risk, both on the assets and liabilities sides;  (4)  banks trying to reduce credit risk, which also leads to changes in the credit structure: an increase in the share of credit to government (from 8.7% to 13.1%) at the expense of consumer credit (declining from 27.5% to 25.0%);  (5)  an increase in bad placements (to 6%), but still a relatively strong resistance to shocks (provided that the currency shock is prevented);  Conclusion: Banks’ policies are expected to be very cautious in 2010, without any significant changes, with regard to both the growth and purpose of placements.
Such decisions can be made after an exchange of information with the government but in the final analysis it should be up to the Riksbank to determine whether or not they are compatible with price stability. With a flexible exchange rate, policy should operate, as today, with an inflation target, and the government should have no possibility of influencing the construction of exchange rate policy. Democratic control is important. But it should be exercised via the Riksbank’s principal, the Riksdag, on whose behalf monetary policy is conducted. It should be noted that in exceptional situations, when the price stability objective may have to be suspended for the time being (e.g. a major oil price shock), both the government and the Riksbank may call on the Riksdag to amend the Riksbank’s statutory objective. In that way the democratic control of monetary policy can be clearly ensured. BIS Review 32/1997

Counterparty credit risk as well as uncertainty about the development of own liquidity needs have led banks to hoard liquidity and impaired the normal functioning of money markets. As a consequence, the liquidity provided to the market does not circulate as smoothly as it does in normal times. Moreover, the nervousness of market players sometimes implies stronger than anticipated interest rate reactions. 5. Conclusion  I would like to conclude by saying that monetary policy implementation has certainly become a more challenging task as a result of the current financial turmoil. At the same time, the flexibility of the ECB’s operational framework has very much helped us in coping with the turmoil. The ECB has been able to maintain control over the short end of the money market, though – not surprisingly – our influence on longer maturities, where prices are driven mainly by credit concerns, remained limited. At the ECB we believe that the separation principle, i.e. the separation of liquidity policy measures from any considerations about the monetary policy stance, has served us well. 9  On this subject, see Cassola, N., M. Drehmann, P. Hartmann, M. lo Duca, and M. Scheicher (2008): “A Research perspective on the propagation of the credit market turmoil”, ECB Research Bulletin No. 7, June 2008. 10  This has been modelled formally by Duffie and Lando (2001): “Term structure of credit spreads with incomplete accounting information”, Econometrica 69, pp. 633-664.
Labour productivity, output 10 per head  Labour productivity, output per head  16 14  8  12 10 8  6  6  4 1989  1993  1997 Productivity  2001  2005 2009 Trend  Source: ONS (including the Labour Force Survey), British Chambers of Commerce and Bank calculations. BIS central bankers’ speeches  4 1989  1993  1997  Productivity  2001  2005  2009  Trend implied by BCC survey  Source: ONS (including the Labour Force Survey), British Chambers of Commerce and Bank calculations. 9  References IMF World Economic Outlook, “Sustaining the Recovery”, October 2009. Krugman, P (1994), “The Age of Diminished Expectations: US Economic Policy in the 1980s”, MIT Press, Cambridge. Mason, G., and Bishop, K (2011). “The impact of recession on adult training: Evidence from the UK in 2008–09”, paper prepared for the EUROFRAME Conference on “Labour Markets after the crisis: policy challenges for the EU economies”. The Global Competitiveness Report 2011–2012, World Economic Forum Thomas, A (2011), “Investigating the characteristics of patents and the businesses which hold them”, Economic and Labour Market Review, Vol. 5: No. 4, 68–86. Weale, M (2010), “After the recession: Thoughts on the growth potential of the UK”. Speech delivered at the Department for Business, Innovation and Skills Analysts’ Conference, London, available at: http://www.bankofengland.co.uk/publications/speeches/2010/speech461.pdf  10  BIS central bankers’ speeches

It is this cost-benefit calculus that both motivates a role for macro-prudential policy, and helps us define precisely what we mean by it. In short, macro-prudential policy aims to improve the trade-off between the financial system’s contribution to the rewards expected in a growing economy and the degree of risk that we will face in the bad times. To return to my analogy, we might liken it to the NHS and to health insurance where we pay a bit in the good times to protect ourselves should our health take a turn for the worse. Principles of good policy making Macro-prudential authorities, like the UK’s FPC, work to ensure that financial systems are resilient to, and prepared for, the wide range of possible shocks they could face. Their aim is to ensure that when shocks occur, the financial system is able to absorb those shocks, rather than to amplify their impact on the economy. We ground what we do in two elements of good macro-prudential policymaking:  Macro-prudential policy should be targeted to provide a net benefit to the overall 3/7  BIS central bankers' speeches  economy. Where interventions incur costs, these should only be imposed when they are outweighed by the benefits over the full cycle. This is perhaps equivalent to starting a course of new medication, where a good doctor must be aware of potential side effects as well as intended benefits.
As a matter of fact, after the crisis, forex interventions re-entered the arsenal of many central banks, including some of the previously more purist free floaters. The NBR has never had the luxury of being concerned exclusively with price stability and interest-rate setting in the belief that financial stability and exchange rate stability will follow. With freely moving capital and a significant degree of euroisation, the idea of being able to manage 2/3  BIS central bankers' speeches  aggregate demand solely via interest rates is clearly an illusion. In the first years after adoption of inflation targeting and prior to the EU accession, Romania saw substantial capital inflows fueling an already fast growing economy. Attempting to contain aggregate demand and anchor inflation expectations only with the interest rate instrument would have entailed additional and more aggressive hikes. This would have been self-defeating, leading to even larger capital inflows and an unsustainable nominal appreciation, boosting foreign currency lending, increasing external sector imbalances, and amplifying financial sector vulnerabilities. I dare say that, when it comes to price stability, just as in the case of economic  convergence, consistency and sustainability are at least as important as the levels of headline inflation rates, especially since non-core components are beyond the influence of the central bank. Moreover, as we all know, economic integration goes hand in hand with price convergence, since prices, along with incomes, also tend to adjust towards EU levels.

This was judged to be especially important at a time when we wanted to quickly generate public confidence in the new monetary policy regime. It was also considered reasonable to attempt to stabilise the value of money in terms of a basket of goods that had great significance for the average person. Additional advantages that are usually put forward are that the CPI is published regularly and comparatively often, and that CPI inflation is normally not revised. Looking back on the ten years or so that have passed since the introduction of inflation targeting, we can conclude that the CPI has worked relatively well as a target variable. When the target was adopted it was probably considered by many to be unrealistic. But during these years inflation has averaged close to 2 per cent. The credibility of the target is also high today, judging by the inflation expectations of households and other economic agents. I don’t think it’s an exaggeration to say that we, through the new policy with a target for the rate of increase in the CPI as an anchor, coupled with a successful consolidation of the government finances, have essentially succeeded in achieving what we had hoped for. Sweden has gone from being a high-inflation economy, characterised by recurring cost crises and unstable economic developments, to being an economy with low, relatively stable rises in prices and wages, where the risk of periods of overheating and subsequent recessions has been reduced considerably.
4 And the Thatcher government, elected shortly afterwards, failed to command broad-based support for a medium-term framework for reducing inflation explicitly founded on “monetarism”, which became a loaded term, widely perceived across UK society as part of an ideology. In other words, sound money or price stability was not viewed as an objective that could be shared across the democratic political spectrum. 5  1  See Chapter 2 in Blinder, A. S., 2004, The Quiet Revolution: Central Banking Goes Modern, Yale University Press. 2  Lombardelli, C., J. Proudman and J. Talbot (2005), “Committees versus individuals: an experimental analysis of monetary policy decision making”, International Journal of Central Banking, May 2005. 3  “The operation of monetary policy since the Radcliffe report: text of paper presented at a conference “Radcliffe – ten years after”, Bank of England Quarterly Bulletin, volume 9, number 4, 1969. 4  Burk, K. & and A. Cairncross, 1992, "Goodbye, Great Britain": the 1976 IMF crisis, Yale University Press. 5  I say democratic, because enemies of democracy have seen debauching the currency as a means to their ends. For example, “The best way to destroy the capitalist system is to debauch the currency” is attributed to V. I. Lenin by J. M. Keynes in The Economic Consequences of the Peace, 1920, p. 235. BIS Review 66/2007  1  This was, perhaps, apparent in the famous 1981 letter of the 364 economists which stressed that “the time has come to reject monetarist policies”.

For an independent central bank to be perceived as legitimate in a democracy, it must be granted a clear mandate against which its performance can be assessed. However, the environment in which central banks operate is highly complex, and conditions can change rapidly. For this reason, mandates usually only sketch out a framework for central banks’ operations. This gives them much-needed flexibility in difficult situations. As a counterweight to its independence, a central bank has a duty to report on its actions, and the results. Indeed, the SNB has regularly provided detailed reports on matters relating to both monetary policy and financial stability. For example, it has explained the rationale behind deciding to discontinue the minimum exchange rate or introduce the negative interest rate, and how these measures have helped it to fulfil its mandate. As regards financial stability, the fact that macroprudential instruments often have powerful distribution effects speaks against handing over the entire responsibility for such instruments to the central bank. In contrast to monetary policy, these measures are sometimes targeted at specific sectors and groups, and thus also have fiscal implications. In Switzerland, macroprudential tasks have therefore been divided up between the government, the financial market supervisory authority and the SNB. The SNB is responsible for assessing the systemic importance of banks and financial market infrastructures, and plays a key role in the deployment of the countercyclical capital buffer. 1/1  BIS central bankers' speeches
High food prices have led to a reduction in purchasing power and social unrest in many areas. By limiting exports of foods and thereby keeping the supply in their own country many countries are hoping to be able to keep down domestic prices. The fact that this in turn risks pushing up world market prices even further and making the situation worse for some countries does not seem to carry any weight. Commodity price rises of course have consequences for monetary policy. How will commodity prices develop, and what contagion effects will there be for other prices? These are questions that every central bank has to take into account when making decisions. It was also something we discussed at the Riksbank’s most recent monetary policy meeting just over two weeks ago. I shall return to this shortly. Why have commodity prices risen so much? What is this sharp rise in commodity prices due to? As is often the case, it is difficult to point to any individual factor that will provide a complete explanation. Many factors have played a role. A product such as rice is, when one looks at it, rather different to a product such as oil. This would indicate that the driving forces have not been identical. But at the same time, the price increase has been so similar for so many different types of commodities that one can suspect there must be some common denominator.

Given the monetary policy system we currently have in Sweden, it involves trying to find a path for the policy rate that ensures inflation is reasonably close to the target while the real economy is in balance. This is how one should reason regardless of what shocks affect the economy. In this sense an upswing in commodity prices is nothing special. …but their practical implementation is difficult However, the practical implementation of the principles is far from simple. This is partly because it is no simple task to capture in the forecast all of the effects that rising commodity prices might have on the economy. It is also because monetary policy works with a lag. Rapid price impulses cannot be immediately counteracted. A further complication is that the effects on inflation and the real economy move in different directions. Inflation rises while the real economy, for instance, production and employment, slows down. It is not self-evident how these effects should be weighed against one another, but this is something that must be achieved in monetary policy. The commodity price rises in recent years have caused inflation to rise in many countries. At the same time, growth in production and employment is slowing down. The slowdown is partly due to weaker international economic activity in the wake of the financial market turmoil and the downswing in the United States. But it is probably also partly due to the upturn in commodity prices.
This not only has given a significant impetus to inflation through a combination of direct effects on household utility bills and indirect effects owing to the use of energy as an intermediate input to the production of other goods and services. It is also likely to have implications for price and wage setting dynamics. For energy importers like the countries of Western Europe including the UK, a rise in international energy prices represents a substantial adverse terms of trade shock. [7] Simply put, the price of what they are buying from the rest of the world has risen considerably relative to the price of what they are selling to the rest of the world. To the extent that any implied deterioration in the terms of trade is permanent, there will be a real hit to those countries real income, which must be absorbed by some domestic actor. In other words, in the end, someone in the UK will have to bear the cost of a higher aggregate UK energy bill. The important question for an inflation targeting central bank is how that happens; in  Page 8  particular, how pragmatic and realistic UK firms and households are in accepting the macroeconomic implications of the higher imported energy and goods prices.

But the extent to which an easing in the labour market induced by monetary tightening will weigh against inflationary pressures will depend on the wider context. It is here where the interaction with developments in energy prices plays out. Higher energy prices and the terms of trade In contrast with developments in the US, wholesale European natural gas prices have risen very sharply over the past year, and continue to show substantial volatility. Owing to the importance of pipeline infrastructure to the transport of natural gas, there is much less integration than for other energy commodities like oil. Notwithstanding Brexit, for these reasons, the UK remains closely integrated into the European natural gas market. Gas price developments in Europe have departed very significantly from those in the US, owing to the disruption to supplies of gas from Russia in the aftermath of the Russian invasion of Ukraine last February. The rise in European gas prices came as a genuine surprise: the Russian invasion was not foreseen in the autumn of 2021, and the duration and intensity of the subsequent conflict have anyway proved greater than expected at the outset. The rise in gas prices has therefore been substantial: at its peak in late August, the April natural gas future stood more than ten times higher than a year previously.