samchain/econo-pairs-v1 huggingface dataset:
Annual inflation figures are somewhat below levels foreseen in March. This is because the immediate effects of the earthquake and tsunami, if any, were bounded and certainly smaller than projected in the last IPoM or by overall market expectations. Despite this difference, the assumptions about changes in some specific prices such as public transport fares, the tobacco excise tax or the unchanged stamp tax will result – in the baseline scenario – in inflation being at the end of 2010 in the upper area of the tolerance range of the inflation target. Towards 2011 and 2012, annual CPI inflation will oscillate around 3% and will stay there through the end of the relevant projection horizon, this time the second quarter of 2012. Core inflation will show a slower convergence to 3%, to hit that figure over the course of 2011. These projections are consistent with June’s Economic Expectations Survey, which foresees y-o-y inflation for December of this and next year at 3.5% and 3.2%, respectively, and at 3% two years ahead (figure 7). Aside from the assumptions just described for domestic and external growth, the baseline scenario considers that in the long run the real exchange rate (RER) will be similar to its current level. This, considering that, with the current level of the nominal exchange rate and the parities prevailing at the statistical closure of this IPoM, the RER is aligned with its longterm fundamentals. The domestic growth scenario foreseen for the coming quarters assumes output gaps closing fully during 2011.

Figure 6 Loans by type of credit (1)  Lending interest rates (3)  (annual change, percent)  (percent)  30  30  50  50  20  20  40  40  10  10  30  30  0  0  20  20  -10  -10  10  10  -20  -20  0  0  98 00 02 04 06 08 10 Consumer Corporate (2)  Housing  02  04  06  08  Consumer, from 181 days to 1 year  10  Consumer, over 3 years (4)  Commercial, 30-89 days (4)  Commercial, from 181 days to 1 year (4) Housing, over 3 years (5)  (1) Data for May 2010 are provisional. (2) Sum of commercial and foreign trade loans. (3) Weighted averaged rates of all operations performed in the month. (4) Nominal rates. (5) UF-indexed rates. Sources: Central Bank of Chile and Superintendence of Banks & Financial Institutions.
“The financial market impact of quantitative easing.” Bank of England Working Paper No. 393. July 2010, revised August 2010. Krogstrup, Signe. 2012. “The effects of the SNB’s liquidity expansion on asset prices at the zero lower bound.” SNB Internal Note. February 2012. Krogstrup, Signe, Samuel Reynard and Barbara Sutter. 2012. “Liquidity Effects of Quantitative Easing on Long-term Interest Rates.” SNB Working Paper. January 2012. (forthcoming). Taylor, John B. 2009. Competing Explanations: A Global Savings Glut. pp. 6–7. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11

Since then, the Fed has been able to accommodate ongoing deregulation and respond to shocks in the financial sector by focusing on adjustments in the federal funds rate. More recently, the challenges for the Fed have been on the real side of the economy - and here I’m referring especially to a technology shock. While a technology shock that boosts productivity is a wonderful thing, it also has created uncertainty about the proper course for policy. As I understand it, productivity growth rates have not yet begun to accelerate in Europe. However, it would seem to be only a matter of time before the ECB will face the challenge of responding to a comparable technology shock. In any event, I’d say that our recent experience makes a good case study in conducting monetary policy in the face of great uncertainty - an issue of importance to any central bank. Let me start with a brief look at the history of our experience with financial change. In the late 1970s, the buildup of US inflation pushed nominal interest rates up against the legal interest rate ceilings on most bank deposits. As a result, the market began to circumvent the ceilings by creating new instruments, and pressure began to mount to remove them altogether. In 1980, the Monetary Control Act did just that by phasing out the ceilings. Importantly for monetary policy, the act also permitted banks to pay interest on some checking accounts.
2 Bank research (Franklin, Rostom and Thwaites, 2016), finds that the reduction in bank credit supply had an economically and statistically significant effect on companies: a 10% fall in the amount a firm could borrow is estimated to have reduced capital per worker by around 5-6%, labour productivity by 5-8% and wages by 7-9%, and increased the probability of bankruptcy by around 60%. 3 See page 52 of the Bank for International Settlements 87th Annual Report, available at http://www.bis.org/publ/arpdf/ar2017e.htm. Zombie firms are defined as those with a ratio of earnings before interest and taxes to interest expenses below one, with the firm aged 10 years or more. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  4  Increased uncertainty has undoubtedly contributed to weak investment. Confirming the adage that bad things come in threes, companies have faced uncertainty about the economy, geopolitics, and economic 5  policy, all of which are likely to have clouded the outlook for how investments will perform (Chart 7). Greater uncertainty about returns means that fewer investment projects will be seen as worthwhile. This could help explain the “puzzle” of why hurdle rates in business investment have remained stubbornly high despite the weaker secular outlook for growth implied, for example, by long-term bond yields. The answer may be that the expected volatility of earnings growth has increased.

I shall only reiterate here that for a small, open economy like ours with no trade or capital controls, keeping a separate currency leaves us exposed to external shocks and volatile capital flows. We are thus obliged to maintain a large amount of external reserves. These are financial assets that could perhaps earn higher rates of return if invested domestically. Instead, we invest them abroad, in effect promoting foreign, rather than domestic growth. That is the price we pay to have an independent currency. This vulnerability is indeed one of the main reasons why some leading academics in this field believe that the small new Member States should have been allowed to lock themselves into the relatively greater security of the euro area as quickly as possible. The validity of this view was underscored by Malta’s experience in late 2004/early 2005 when the Bank’s external reserves declined as a result of uncertainty created by speculative comments on the exchange rate. Your second question reflects the view that the fixed nature of the exchange rate as well as the level at which the lira was pegged to the euro in ERM II are both inappropriate and are stifling Malta’s competitiveness. Let me first address the issue of the fixed peg. This has been a mainstay of our monetary policy for over three decades. It is what Maltese traders and investors, and the public at large, have become accustomed to. The resulting exchange rate and price stability have made a vital contribution to the country’s economic development.
1/4  BIS - Central bankers' speeches  As regards other economic developments specific to the euro area, despite the recent favourable GDP outturns, Russia's unjustified war against Ukraine and its people, continues to act as a headwind to euro area growth. Whilst supply chain bottlenecks are gradually easing and the supply of gas has become more secure, inflationary pressures remain elevated. Specifically, following a peak of headline inflation at 10.6% in October 2022, in February this year it still stands at 8.5%. At the same time, core inflation, which excludes the volatile items of energy and food and therefore captures demand pull forces of inflation, continues on an upward trajectory moving from 5.0% in October 2022 to 5.6% in February this year. In addition, wages continue to grow fast, supported by robust labour markets, with some catch-up to high inflation becoming the main theme in wage negotiations. In this setting of high headline and core inflation, monetary policymakers must ensure that inflation does not become entrenched. Therefore, from an expansionary monetary policy up until the end of 2021, the ECB has moved through the neutral range and continued moving into the restrictive monetary policy interest rate range, currently at 2,5%. At the last ECB Governing Council meeting beginning of February, we reiterated the need to stay the course in raising interest rates at a steady pace and keeping them at restrictive levels to ensure a timely return of inflation to our two per cent medium-term target.

These incentives are offered in the context of the so-called "international headquartering" policy. According to the latest Central Bank of Cyprus forecasts of December 2022, the growth of the Cypriot economy is expected at 2,5% this year which compares well to the euro area average of 0,5%. Inflation is expected to decelerate in 2023, levelling at 3.3%, from 8.1% in 2022. Foreign investment in Cyprus, as I mentioned before, constitutes a significant driver for development. In recent years, major multinational firms in the Information, Communication and Technology industry (ICT), have relocated or expanded their activities in Cyprus, supporting Cypriot GDP and reinforcing the vision to transform Cyprus into an emerging technology hub in the Mediterranean. Cyprus' importance as a foreign investment hub is also reflected in the Greenfield FDI Performance Index1, created by FDI Intelligence, according to which in 2021, Cyprus was ranked in 18th place out of 84 countries included in this index (climbing by 50 places compared to 2020). Undoubtedly, the shipping sector is another important pillar of Cyprus' economic success. Limassol, Cyprus' maritime capital, is the home of influential names in the shipping industry, which boosted the country to the top ranks of the sector. Indicatively, Cyprus is the largest third-party ship management centre in the European Union, one of the largest in the world2 and is primed for further growth.
However, the fact that monetary policy is not just directed towards stabilising inflation, but also towards stabilising resource utilisation has, in the absence of quantitative measures of stability in these variables, made it difficult to measure and evaluate target fulfilment in this stability dimension. Quantitative measures such as the mean squared gaps make it possible to measure and evaluate this target fulfilment, however. Work is now underway at the Riksbank to determine how such measures can be used. The results of this work will be successively reported in the Monetary Policy Report and in other documents published by the Riksbank. How did the outcome for 2009 compare to our forecasts? Inflation far below the target and a record fall in GDP The rate of inflation, measured as the change in the CPI, averaged –0.3 per cent in 2009; it was thus far below the inflation target of 2 per cent. This is explained – as I have already mentioned – by the Riksbank’s substantial repo-rate cuts, which began in the autumn of 2008. The Riksbank’s repo-rate cuts led to lower mortgage rates and mortgage rates are included in the CPI. Measured in terms of the CPIF, which is the CPI with a fixed mortgage rate, inflation was more stable and averaged 1.9 per cent in 2009. The repo-rate cuts in 2008 and 2009 were made in the full realisation that CPI inflation would be low. In the longer term, however, the repo-rate cuts will help to keep CPI inflation up in line with the target.

Local Rochester movie theaters will air the winning video for two weeks in September, and we will explore additional outlets for this video throughout the region as a public service announcement. These success stories that I’ve highlighted today illustrate the potential for workforce development to help cities such as Rochester continue to reinvent themselves for today’s economy. We need to be vigilant in our focus on those in danger of being left behind. Too many individuals, especially in our urban centers, lack a high school diploma. For example, the Rochester City School District has a dropout rate of 25 percent, and an alarmingly low graduation rate of just 50 percent. Without a high school diploma, people are in danger of being left behind without the skills they will need to truly participate in the economy. 4  BIS central bankers’ speeches  Succeeding in the international competition for jobs with a 50 percent graduation rate is like trying to win a boxing match with one hand tied behind your back. We must do better. While there are no easy answers, for the regional economy to thrive everyone needs to be an active participant. We need to figure out ways to re-engage those who have become detached from the workforce, or who feel like they don’t have the skills to compete in today’s challenging economic environment. In closing, Rochester is a metropolitan area in the midst of a process of transformation and reinvention.
For the euro area and for the confidence of its citizens, 2016– 2017 is the crucial time to act: I had the opportunity to discuss these proposals in greater depth a few days ago, and I hope that our exchange will further this debate. 2  BIS central bankers’ speeches  I will finish with a few words about the Banque de France itself. When you heard me in September, I presented my view of the three main tasks of the Banque de France: monetary strategy, financial stability, economic service, via its branch network. With the staff of the Banque de France, we firmly believe in these tasks and in their future, and that is why our ambition is to be an exemplary public service, even more efficient, more innovative, and more visible in France and Europe. BIS central bankers’ speeches  3

Recognizing this, the Bank of Thailand has gradually relaxed capital flows regulations, initially on outward direct investment and more recently on portfolio investments for Accredited Investors. We plan to continue to broaden the scopes of investment with freer mobility for Thai residents in investing overseas. The BOT is also working closely with the Ministry of Finance and other agencies on appropriate tax incentives to facilitate the setting up of treasury center to enable large corporate to conduct in house financial transactions more efficiently and with lower transaction costs. With the opening up of the New Investment Frontier, this is probably the most exciting times for Thai corporates to invest abroad to secure resources both raw material and know how, expanding customer base, acquiring distribution channels, and broadening markets. 3. The last area of “Move in”, aims to create a more attractive business environment for foreigners to turn to Thailand as an important spring board for investment in the new frontier markets. Thailand has a geographical location advantage to become an investment hub for the ASEAN Economic Community, particularly the new frontier markets. To become a magnet for the region, Thailand needs to maintain its ranking in the ease of doing businesses in such areas of rules of law, governance and strong regulatory frameworks. The Thai capital market has also worked hard to promote its role as the funding centre for new frontier markets. Recently the Government of the Lao PDR successfully issued Thai baht-denominated bonds amounting to THB 1,500 million to finance its investment projects.
When the housing boom lost steam and began to burst, expectations about housing prices and wealth were disappointed. The bursting of the credit bubble also created instability within the global financial system and, this, in turn resulted in a sharp drop in the credit available to households and businesses. The result was what is now called the “Great Recession”. Over the period from late 2007 through mid-2009, real GDP declined by more than 5 percent, making this recession the longest and deepest recession of the postwar period. The recession was felt in many ways, but one of the most painful was the severe impact it had on the labor market. Employment dropped sharply during the recession, contributing to a sharp rise in the unemployment rate from around 4.5 percent in the middle of 2007 to over 10 percent in October 2009. Extraordinary actions by authorities around the world, including the Federal Reserve, prevented full-scale financial and economic collapse, and the global economy stabilized around mid-2009. But since then the recovery has been bifurcated. While emerging economies have rebounded rapidly, the developed world has grown only slowly. This has hastened a historic shift in the balance of economic power that was already underway before the crisis. In the United States, the recovery has proven to be persistently weaker than expected. Growth has been insufficient to either bring down unemployment significantly or to achieve a self-reinforcing cycle of strengthening confidence, demand, income and employment.

8  On this point, see Greenspan, A., The Age of Turbulence: Adventures in a New World, Penguin, 2007, pp. 289–290. 9  See, for instance, Caballero, R., Hoshi, T. and Kashyap, A., “Zombie lending and depressed restructuring in Japan”, American Economic Review, Vol. 95, 2008, pp. 1943–1977, Peek, J. and Rosengren, E., “Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan”, American Economic Review, 95, 2005, pp. 1144–1166, and Nishimura, K.G. and Kawamoto, Y., “Why does the problem persist? ‘Rational Rigidity’ and the plight of Japanese banks”, The World Economy, Vol. 26, 2003, pp. 301–324. 4  BIS central bankers’ speeches  beginning of the 1990s, entry rates of firms declined from their pre-crisis peak of above 7% to a range of 4–5%, whereas firm exit rates remained subdued at their pre-crisis levels throughout the 1990s.10 The lesson from this experience is to recognise non-performing loans in a timely manner and have strong institutions in place to deal with the restructuring. This reduces uncertainty and avoids adjustment delays. For the euro area, it is a call to move forward in completing the banking union. Supervision and resolution Up until now, supervisory and resolution authorities have operated at the national level. During the crisis this set-up has revealed pitfalls on three fronts.
Major events that could shape global growth in the near term include uncertainties in policy and political spheres, especially in major economies; the potential retreat arising from backlash against globalisation; the rise in trade protectionism; and the volatilities of global commodity prices. Financial markets have in recent months remained eerily calm. However volatility may 1/6  BIS central bankers' speeches  reignite if risks re-emerge, whether real or perceived. Beyond these short-term risks, structural changes are also afoot. The ageing population, income inequality and youth unemployment are slow-churning yet potent structural changes that require policy prescriptions. Changes in policy today are needed to secure future prospects for growth. In Malaysia, the economy has been boosted by the expansion in global demand. The strongest export growth in 28 quarters has provided additional impetus to our domestic demand. Consequently, the Malaysian economy started 2017 with a robust growth of 5.6% in the first quarter. We are on track for a better economic growth compared to last year. Nevertheless as an open economy with sizable and globally connected financial markets, Malaysia cannot neglect the risks dominating the global environment. We are certainly not immune from events unfolding around us. Some say central bankers are paid to worry. In good times and even more so, the bad. However I am comforted that earlier reforms have accorded the country with strong macroeconomic fundamentals and resilience to weather these still-challenging times. However, we cannot afford to rest on our laurels. New risks and challenges continue to emerge and confront us.

8  Malmandier and Nagel (2011): “Depression Babies: do macroeconomic experiences affect risk taking?”, Quarterly Journal of Economics. 9  See Bernanke, B (1983), “Irreversibility, uncertainty and cyclical investment”, Quarterly Journal of Economics, 98(1). 10  Bloom (2009) shows how economic uncertainty reduces the shrinkage of low productivity firms and the expansion of high productivity firms, reducing the reallocation of resources towards more productive units. Leduc and Liu (2012), emphasise the aggregate demand effects empirically for the US. Leduc and Liu (2012), “Uncertainty shocks are aggregate demand shocks”, Federal Reserve Bank of San Francisco Staff Paper 2012–10. 11  Together with the aggregate effects, higher stock market volatility generates greater dispersion in firms’ profit growth and industries’ productivity growth. Bloom, N (2009), “The impact of uncertainty shocks”, Econometrica, 77(3), May. 12  Bloom, N, Bond, S and Van Reenen, J (2007), “Uncertainty and investment dynamics”, Review of Economic Studies, 74.
The target set in the draft State Budget for 2008 for the general government surplus is 1.15%, in a macroeconomic scenario characterised by a mild slowdown in GDP. The projected decrease in the surplus is based essentially on tax cuts mainly affecting personal and corporate income tax, whereas on the spending side the draft Budget sets a growth rate for the State in line with expected nominal GDP growth. This entails strict compliance with the ceiling established in the Budget Stability Law in June. In any event, it should be kept in mind that the Budget is based on a projection for end-2007 that is very prudent on the revenue side. The strong buoyancy of receipts in the year to date, particularly in direct taxes, might enable the latest official projection of the surplus for 2007 to be exceeded. Should this occur, under a macroeconomic scenario similar to that assumed in the Budget, this improved result in 2007 should be carried over to the budget for 2008 and thus enable another surplus in excess of projections. What is most important is that, as in previous years, the additional revenue that may arise should not lead to increased spending, but rather to a higher surplus. Regarding the size of the budget surplus, I wish to underline that the current situation of public finances is, in part, temporary.

4  See Hélène Rey, 2013, “Dilemma not trilemma: The global financial cycle and monetary policy independence”, paper presented at the Jackson Hole Economic Policy Symposium. Incidentally, Hélène Rey was the 2006 Germán Bernácer Prize winner. 5  For more details on the construction of the measure see Scott Baker, Nicholas Bloom and Steven J. Davis, 2012, “Measuring economic policy uncertainty”, working paper, Stanford University. 2  BIS central bankers’ speeches  account for a significant proportion (10–30%) of the differences in productivity between firms and between countries.6 Their research did not stop at documenting the impact of the differences in management practices. They also offered suggestions for policy interventions that could encourage the uptake of good management behaviour. Competitive and flexible markets enable managers to re-optimise resources within and outside the firm more easily. Educational standards matter as well. Better-managed firms have better educated workers and they use them more efficiently. Moreover, better educated managers have necessary skills to adopt state-of-theart management practices and adapt to changing environment. This enables them to maintain and improve their global competitive position. Multinational companies also have a strong positive effect, as they transplant their management styles to the countries in which they operate.7 These research-based conclusions highlight a key role of structural reforms in the wake of the global economic crisis. Countries with more competitive market conditions, better education and more investment in R&D and innovation policies can maximise the beneficial impact of managerial capital on productivity and growth.