samchain/econo-pairs-v1 huggingface dataset:
Around 12% had worked from home in the previous week and a little more than a quarter said they had worked from home at some point in the recent past.3 At the peak of lockdown in April, almost half of the workforce was working from home in any given week, either exclusively or partially. Over the summer that fraction began falling as restrictions were loosened, before beginning to rise again gradually following government announcements in September. The fraction of the workforce home-working currently stands at around a third, multiples of its pre-Covid level. Of course, these averages obscure some sharp differences across sectors and occupations. Even before the pandemic, there was a high incidence of home-working in sectors such as information and communication (over 50%), professional and scientific (around 45%) and real estate and finance (about 40%). During lockdown, all of these sectors headed towards a 100% model of home-working. That was not the case, either pre or post-Covid, among a range of other occupations representing between half and two-thirds of the workforce. Many of those were key workers, including in health and social care, dealing with the effects of the pandemic. In this respect, Covid has not only accelerated pre-existing trends towards home-working; it has also widened pre-existing occupational divides between those who can and cannot exercise the option of home-working.4 Surveys of workers and businesses suggest increased home-working is likely to persist, albeit not on the same scale. Around a fifth of businesses say they intend using home-working as a permanent business model.

A number of empirical studies have looked at the effects of home working on productivity.5 Pre-Covid, the lion’s share of these studies suggested home-working improved productivity. As one example, Bloom et al (2015) conducted a randomised control trial in a call centre of a Chinese travel company, randomly allocating some workers to work from home and others to work in the office, before measuring their respective performance. Home-working improved worker productivity by around 13% almost a day’s extra output, a massive gain. Interestingly, after the trial the company allowed everyone who wanted to work from home to do so. That improved company performance by 22%. These productivity effects do not appear to be fixed across different demographics, firms, tasks and sectors.6 For example, studies suggest productivity gains from home-working are largest for creative tasks, perhaps reflecting the benefits of a quieter, less distracting home-working environment.7 It is also worth saying that some of the evidence of productivity gains may be biased upwards by self-selection, with those opting to work from home more likely to be able to do so productively. When it comes to the productivity effects of home-working during the Covid crisis, the evidence – while thinner – points in a different direction.
Jon Cunliffe: Momentum in the housing market – affordability, indebtedness and risks Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at the Worshipful Company of International Bankers dinner, London, 1 May 2014. *  *  *  In 2007, the average house in the West Midlands cost around £ 1 Transactions in that region were running at 10,000 a month. By 2009, the average price had fallen by around 15% to around £ and transactions to around 5,000 a month. And, while prices and transactions bounced back in 2010, prices were subsequently pretty flat in the West Midlands until spring last year. Over the 12-months to March, prices grew by a little under 10% in the West Midlands. The average house in the region now costs around £ – 7% off the peak. Transactions in the region look to have averaged around 7,000 a month in 2013. I mention the West Midlands because the level and growth rate of house prices in that region broadly matches the median for the country as a whole. The point is the rapid growth in the UK housing market is not just a London story. For the country as a whole, prices at the end of March were also up around 10% on their level a year ago, back to where they were in late 2006. For 10 out of the 12 regions of the UK prices grew by more than 5% in the year to 2014Q1.

Regression results using CSI display neither a flattening of the short-run Phillips curve nor signs of nonlinearities. The lower part of Table 1 reports the estimation results using CSI inflation. Starting with the linear specification, the full-sample and early-sample results are very similar to 2/4  BIS central bankers' speeches  those using core PCE price inflation. This is not altogether surprising since the two series track each other closely during the first half of the sample. The big difference is in the later subsample, where the coefficient on the unemployment gap is not that much smaller than in the early sample, and larger than in the full-sample estimation. Moreover, there is little evidence of nonlinearity in the Phillips curve relationship in either the full or later samples. Evidently, both the flattening of the Phillips curve and evidence of nonlinearities depend on including goods and other categories that are primarily influenced by non-cyclical factors. These results suggests that the Phillips curve is alive and kicking when inflation is measured using categories that are cyclically sensitive, rather than buffeted by supply and other shocks. Based on this analysis, the trade-offs between employment and inflation the Fed faces haven’t fundamentally changed. That does not imply there have not been meaningful changes in inflation dynamics—inflation persistence has fallen significantly for the CSI as well. This means that transitory shocks no longer get embedded in inflation expectations, but instead have relatively short-lived effects on inflation.
This demographic trend can be measured using the old age dependency ratio, which measures the ratio of people over 64 to the working age population. An ‘older’ population has a higher old age dependency ratio. Chart 3 shows that the old age dependency ratio in Switzerland, as in many other countries, is rising. Pensioners live off their savings. And an ageing population needs to save more today in order to be able to finance a specific level of consumption in the future. Another cause of the increased supply of savings is the integration of China into global financial markets. Savings in China are high as a result of its ageing society and its rudimentary state pension system. In the current economic situation, uncertainty regarding the future development of the economy in certain parts of the world may also have pushed up the supply of savings. While the propensity to save has increased, the willingness to invest may also have fallen. On the one hand, this may once again reflect heightened uncertainty over future economic conditions. On the other, expectations of lower productivity growth might also be playing a role. Furthermore, industrial economies are being transformed into service economies, with potentially lower capital needs. All these factors have resulted in a relatively low real equilibrium interest rate today – across the world, and thus also in Switzerland. Moreover, global monetary policy is expansionary due to undesirably low inflation and subdued economic growth in the wake of the financial crisis.

In 2017, the Bank of Albania, in cooperation with the Ministry of Finance and Economy and the World Bank explored options for developing the secondary market of Government securities and improving the functioning of the primary market. This project will help in the Government securities trading, increasing the investors’ base, and forming a yield curve that is a representative one for the economy. Such a curve enables a better management of liquidity for all the financial agents, as well as a better monetary policy transmission to financial markets. I would like, however, to underline that the development of markets is a long process, which requires cooperation by all economic and financial agents in the economy. *** Turning to the contribution of the Bank of Albania in the overall improvement of the financial and economic context, I would like to present now our work with regard to safeguarding and promoting financial stability. The main aspects of our work consisted in strengthening the stability 5/9  BIS central bankers' speeches  of the banking system, enhancing its resilience to shocks and adoption of international standards. 3. Financial stability and banking system performance In 2017, the activity of the banking system was stable and supported the safeguarding of the financial stability. As at the end of 2017, the share of its assets stood at 92.5% of the Gross Domestic Product (GDP). The main financial indicators of the banking sector activity improved, and the net financial result of the banking sector grew considerably in 2017.
But it is a fair bet that, if we had, then we would have put the chances of a contraction as large as the ONS’s current estimate of 6% as being virtually negligible. It is worth stressing that we were not alone in thinking a very severe contraction in activity was unlikely. Almost all forecasters were in the same boat. For instance, when we prepare our projections each quarter, we also canvass the views of outside forecasting bodies. Their assessment of the probabilities of various ranges of possible outcomes was very similar to 1 ours. Chart 2 illustrates the same point, but puts it into a broader context. The blue line shows the actual path of four-quarter GDP growth over the period since the creation of the MPC, while the pink line shows the Committee’s central (mean) projection from a year earlier. The green bars show the range of end-year forecasts for the following year produced by about 25 other organisations, together with their corresponding average (the green diamonds). The striking feature is the close proximity of the MPC’s projections and the average of the outside forecasts throughout the sample. For most of the period – one in which, it should be said, growth was unusually stable – those forecasts are close to the subsequent outturns.

The two exceptions are the Great Contraction of 2008–9 and the “phantom” slowdown after the 1997–8 Asia/LTCM crisis, when early vintages of the official data for output as well as business surveys pointed to a slowing in growth that was not subsequently borne out in mature vintages of the official data. And for both these episodes, 2 no forecaster came close to predicting the outcome. The generic point here – which holds true in fuller analyses over longer time periods – is that the big divergences, when they occur, are not between the central forecasts made by different bodies, but rather between those forecasts and the corresponding outturns. And that is as it should be: deviations of outturns from central (mean) forecasts should be unpredictable if those forecasters are using the information that is available to them efficiently. Why then, as the Queen famously asked at the London School of Economics in November 2008, did no-one see the Great Contraction coming? Some economic downturns are broadly predictable in nature. In particular, that is the case when they are deliberately policy-induced in order to squeeze inflation down, though even then it may still be difficult to get the magnitude and timing right, and there will always be other unexpected events that perturb the path of the economy. But downturns associated with financial or banking crises are rather different animals. Rapid growth in credit and asset prices can act as a warning sign of building vulnerabilities, but frequently appear to be validated by developments in underlying economic fundamentals.
Alex Brazier: A macroprudential approach to bank capital – serving the real economy in good times and bad Speech by Mr Alex Brazier, Executive Director for Financial Stability Strategy and Risk of the Bank of England, at the 27th Annual Institute of International Bankers conference, Washington DC, 7 March 2016. *  *  *  I am grateful to Rob Edwards, Jas Ellis and Calum Mitchell for their assistance in preparing these remarks. Your industry has known better starts to a year. Bank stocks down, volatility up, earnings disappointing. All ghosts of crises past. But one ghost has not returned to haunt us. Questions about returns haven’t translated as they’ve done before into questions about resilience. Investors may have real questions about whether some banks can generate adequate return on equity in a difficult global economic and trading environment. They may also be more alert to the risks in and appropriate returns to contingent capital instruments. But when UK bank price-to-book ratios were this low in 2009, senior unsecured debt spreads were over 350bps. At the height of the euro crisis in 2011, they were 300bps. Today, they are just 73bps (chart 1). Underlying that is the transformation of bank capital. In the UK, major banks now have core tier 1 equity ratios averaging nearly 13%. Before the financial crisis they had – on Basel III definitions – just 4.5% (chart 2). Those new levels of resilience are seen in the results of stress tests.

Any hasty short-term reactions, like the ones we have been attesting to over the course of the present year and in the early days of this week, bring about individual financial cost to those undertaking them, as well as financial cost to the economy. No economic agent is stronger than the foundations. The high volatility and uncertainty in the foreign exchange market do not have any real base. The euroisation of the economy is a visionary idea, not only for Albania but for the entire region as well, since its final aspiration is the membership into the European Union. It encourages the domestic and the regional market, and the European authorities, to speed up the convergence process. However, convergence in the Euro area is a derivative of continuous structural reforms and strengthening of financial systems, wherein the stability of  BIS Review 119/2009  1  the currency is of prime importance. There can be no European integration without a longterm equilibrium of the national and European currency. In the long run, the exchange rate will inevitably reflect the sound foundations of the Albanian economy, which are to remain so. The past years’ equilibriums remain real indicators of the potentials of the Albanian economy. In the long run, we remain deeply convinced of the benefits the free floating exchange rate regime brings about. It will be the passport to and the best support to the Albanian economy in its path to European integration.
At the same time, high inflation could become entrenched as a result of increased secondround effects, requiring stronger monetary policy responses in other countries. Finally, there are still important downside risks to growth from the war in Ukraine and the pandemic. Page 2/5  Berne, 16 June 2022 Thomas Jordan  News conference  Swiss economic outlook I now come to developments here in Switzerland. The Swiss economy has continued the favourable development it has shown since the beginning of the year. After modest growth in the fourth quarter of 2021, GDP increased by just under 2% in the first quarter of this year. The signals remain positive for the current quarter. The situation on the labour market has also continued to improve. The war in Ukraine has thus far had comparatively little adverse impact on economic activity in Switzerland. The effect has been most clearly felt in the higher energy prices and in the supply bottlenecks. For 2022, we still anticipate GDP growth of around 2.5%. Unemployment is likely to remain low. This favourable forecast is based, among other things, on the assumption that the global economy continues to grow and that the war in Ukraine does not escalate further. Our forecast for Switzerland, as for the global economy, is subject to large risks. If the energy supply in Europe were to be adversely affected, this could have a serious impact on the Swiss economy. The global supply bottlenecks and further increases in commodity prices could also slow growth.

On the other hand, the uncertainty stemming from the war in Ukraine as well as the coronavirus lockdowns in China are curbing the development of the global economy. That said, unemployment has continued to decline in many countries. In the advanced economies, it is now back around the low levels seen prior to the pandemic. Since March, there has been a further considerable and broad-based increase in inflation in many countries. The war in Ukraine has been a significant factor here, too, in that the prices of many commodities have risen as a result. In addition, persisting supply bottlenecks have led to further price increases for various goods. In our baseline scenario for the global economy, we assume that energy prices will remain high for the time being, but that there will not be an acute energy shortage in the major economic areas. The positive development of the economy should thus continue overall. Owing to the increased prices for energy and food, coupled with the supply bottlenecks, inflation is likely to remain high for some time. However, the importance of these factors should diminish over the medium term. With monetary policy also becoming increasingly tighter in many countries, inflation is likely to gradually return to more moderate levels. Our scenario for the global economy is subject to significant risks. For example, inflation could rise further and thus weigh even more heavily on real incomes and consumer demand.
In fact, the average inflation around the world increased from 3.5 percent in 2006 to 4.8 percent in 2007 and to 5.5 percent in January 2008. In this environment Turkey was able to reduce inflation by 1.3 percentage points in 2007. In fact, this was the sharpest drop among 60 major developed and emerging countries. The disinflation process is even more pronounced in core inflation, which excludes energy and food prices. It stood at 4.36% as of February 2008. The favorable outlook in core inflation indicators despite the surge in energy and food prices has allowed the Central Bank to cut policy rates since September 2007. The cumulative rate cut reached to 225 basis points as of February 2008 bringing the overnight borrowing rate to 15.25% from 17.50%. The timing of further easing depends on developments in global markets, demand conditions, fiscal policy performance and other factors affecting the medium term inflation outlook. According to the forecasts of our January 2008 Inflation Report, the year-end inflation may stay above the target in 2008, but within uncertainty band, due to factors outside the control of monetary policy such as energy and food prices. The mid-point of our forecast for 2008 is 5.5%, whereas the year-end target is 4%. However, inflation is forecasted to converge to the target in 2009 and come down to 1.8-5.5% range with 70% probability at the end of 2009.

The 1998 fall in domestic lending amounted to $ billion in absolute terms, of which over 60% was accounted for by the Japanese and Continental European banks combined. This withdrawal of credit drastically reduced the funding available to Hong Kong corporates and increased their financial difficulties. This in turn has fed through to increased bad debts for the banks. Hopefully, the economy has now bottomed out and economic growth will resume this year as forecast by the Government. The stock and property markets certainly seem to be indicating an improvement in confidence and if sustained this will reverse the negative wealth effect of 1997/98 and encourage a revival in consumer spending that is necessary to take Hong Kong out of recession. However, in the initial stages of the recovery the financial position of many companies will remain under pressure, particularly as the upturn in the economy will increase their need for working capital. In the meantime, an increasing number of companies are going into liquidation. The number of compulsory winding-up orders jumped to 763 in the financial year 1998/99. This is an all-time high that compares with the average of 480 in the previous five years. It is certain that without the alternative of workouts the number of liquidations would have been much higher. The role of the workout is to provide an alternative to insolvency and receivership which will allow commercially viable companies to survive as going concerns, thus preserving employment and productive capacity.
Among emerging economies, the improvement in China’s outlook is worth noting. In the fourth quarter of last year, the Chinese GDP grew 6.8%, so growth for the full year was 6.7%. Conjunctural numbers and financial indicators have been calmer, according to manufacturing output and foreign trade figures. The renminbi is depreciating gradually and the large capital outflows and reserves depletion of 2016 have stopped. Meanwhile, the authorities set the growth objective at 6.5%. Thus, our baseline scenario has revised the Chinese growth forecast upward by 2 decimals. In Latin America, the main economies in the region are still adjusting. In Brazil, consumption and investment are weak, as is manufacturing production in Colombia. Argentina is also undergoing a difficult process and, although more lagging than in other countries, has shown signs of milder deterioration of activity, especially concerning manufacturing output. The Mexican economy could sustain good growth and performance in the labor market until the markets became aware of the potential effects of the US elections on trade and migration. This has resulted in weak investment. In this context, the Mexican authorities have taken steps to strengthen their macroeconomic fundamentals, through policies aimed at consolidating public finances, withdrawing the monetary stimulus to deal with inflationary pressures, and managing the exchange rate to counteract the sharp depreciation that the Mexican peso suffered towards the end of last year. In general, the inflation outlook has continued to improve in the region, opening room for further monetary stimulus.

The challenge will be to ensure that the various insurance and benefit systems provide the necessary basic safety net but still maintain a strong impetus for people to begin work again. It will probably be necessary to make both general changes in insurance and benefit systems and selective measures to raise labour force participation in groups where the potential to increase the work input is considered relatively large. Examples of these groups are younger people, older people and people born abroad. Conclusion Let me finally return to my starting point and the discussion of long-term growth. I have mainly concentrated on the relationship between potential growth and monetary policy. However, we must not forget that long-term growth has significance for all parts of the economy and one of the most important goals for economic policy in general is to promote a high level of long-term growth. Growth is not the same thing as increased wealth, but growth creates a foundation for increased wealth. It creates greater scope not just for households’ private consumption, but also for financing, for instance, education systems of high quality and a good level of care and welfare and provides better opportunities to achieve other political goals. Potential growth sets the framework for monetary policy. Simplified, one can say that the Riksbank’s task is to keep actual output as close to potential output as possible.