samchain/econo-pairs-v1 huggingface dataset:
Its soundness has, moreover, been appreciable in all its components. In the case of investment in construction, growth rates of over 5% have been observed. In this respect, residential investment, along with the non-residential building and civil engineering works segments, were particularly buoyant. In the case of housing, the latest available data suggest that this dynamism might run into 2007. Investment in equipment has not only remained the most dynamic component of demand, but it also moved on a rising path in the first half of the year. This facet of the current growth pattern is, perhaps, one of the most favourable points, since it may be interpreted as a renewed effort by Spanish firms to extend and modernise their productive apparatus at a time at which returns are high and the financial conditions for undertaking such spending are still attractive. Evidently, increased export activity and the improvement in the industrial sector in 2006, which I shall address hereafter, are very closely connected to the momentum of investment in equipment. The dynamism of exports is in fact one of the key features of the current economic situation, as it has served to raise the contribution of net external demand to GDP growth and offset the slight slowdown in national demand. The pick-up in goods exports has been driven by the forceful increase in world trade and by the take-off of economic activity in the euro area countries.

Europe needs a better sharing of private sector risk, in order to channel its abundant savings more effectively towards productive investment. And the equity financing of businesses, across European borders, must be a priority. Europe is lagging far behind in this area: such financing only represents 67% of GDP in the euro area compared with 125% in the United States. The second project, on which we could make progress after the French and German elections that will take place this year, is a collective economic strategy in the euro area. Growth and employment will be stronger in Europe if we combine more structural reforms where they are a priority – in France and Italy for instance –, and more fiscal or wage support in countries with room for manoeuvre – Germany and the Netherlands.In practice, for such a collective economic strategy to exist, the euro area needs to overcome the current sense of distrust; it needs what I would call “a trust deal”. This is why I have proposed, as have others, the creation of an institution to foster confidence, which could consist of a euro area “finance minister”. 5/6  BIS central bankers' speeches  * * * Let me conclude. Jacques Delors, who was President of the European Commission in the late 1980s – early 1990s, used to say that in Europe “we don’t just need firefighters, we need architects”.
There are encouraging signs that these policy actions have been successful and the risk of a severe adverse feedback loop – as households, companies and banks simultaneously try to retrench – has been avoided. The banking system has stabilised. Measures of business and household confidence have recovered significantly. And the most recent ONS estimates for the third quarter suggest that the contraction in consumer and business spending may be beginning to abate. Corporate liquidations and unemployment: better than feared The prompt and large policy actions are likely to be one reason why corporate failures have, to date, not increased by as much as might have been feared. Although output has fallen by more than in either the 1980s or 1990s recessions, liquidations have risen by less than at the same stage of those downturns. Companies have benefited from the fall in debt servicing costs associated with the sharp reduction in Bank Rate and by the Government scheme allowing them to defer tax payments. And by supporting corporate credit markets, the Bank’s asset purchase programme has also helped some firms to bypass banks and access capital markets directly. I fully recognise that the asset purchase programme has not been as of much help to many small and medium-sized enterprises – many of whom are represented here today – who are not able to access capital markets and are largely reliant on bank credit.

Inflation, as measured by the change in the Consumer Price Index, should be 2% at all times. But because interest rates take time to affect inflation, forecasts of inflation are integral to setting monetary policy. And because the MPC’s forecast is a probability distribution, rather than a single number, it is communicated in a fan chart. That depicts the MPC’s view of the probability of a range of different outcomes. Each forecast covers a three year forecast period, because that is the horizon over which we expect the current stance of monetary policy to have the majority of its effect. Here is an example fan chart (see http://www.bankofengland.co.uk/publications/speeches/2010/speech432.pps). It shows the inflation projection published in the February 2010 Inflation Report. Each fan chart is conditioned on a particular path for the Bank’s policy instruments. This one assumes that Bank Rate will follow the path expected by financial markets. The MPC also publishes another fan chart conditional on a different policy assumption, namely that Bank Rate remains at its current level throughout the forecast. We believe these charts have been helpful in communicating the big picture that the MPC needs to get across. The fan chart works by showing what the Committee believes would happen to inflation if today’s economic circumstances were repeated on 100 occasions. In any given quarter in the future, CPI should lie somewhere in the red shaded area on 90 out of 100 occasions: 10 times in the darkest red band, and 10 times in each pair of lighter red bands.
We have also developed over the years and have been equipped with a broader and more in-depth surveillance that now covers household, financial, and real estate sectors. This is important for early detection of imbalances and enables preemptive policy action to prevent costly bursting of bubbles. Importantly, the process of monetary policy decision itself has been institutionalized, and independent from political influence. I therefore have no concern today whether who will become the next governor since a good system for policy decision making is already in place. Going forward, one of the important policy challenges facing us is the sizeable and volatile capital that flows to emerging economies, including Thailand. This is due to their better growth prospect and earlier policy normalization vis-à-vis G3 countries. Apart from the policy measure to try to shield ourselves from the adverse impact, the private sector also needs to remain vigilant about risk by not building up excessive risk exposure and by employing more risk protection tools as well. I turn now to the third part of my presentation that is what we can possibly do more to enhance Thailand’s resiliency over the medium term. On this issue, I would like to reiterate briefly what I said earlier in my annual statement regarding the urgency to elevate Thailand’s  BIS Review 94/2010  3  fundamental strength to cope with the changing structure of the global economy. Specifically, there are three issues that should be considered priorities.

After the introduction and the keynote, the conference explores four directions of thought on the topic of monetary unions in history. A panel is devoted to each of them. The first panel will explore the link between monetary unions and economic integration by offering a glimpse in their history. The second session will focus on twentieth century monetary unions following the great and continuous economic stress of the First World War. The third panel will examine monetary unions as facilitating tools for greater customs and economic integration within the Comecon and the Austro-Hungarian Empire. Finally, the last session will address the question to what extent the political relations transcend in the monetary unions as well illustrated by the Great Britain and the member-states of the European Union. This program will break for a discussion between leading academics and policy-makers on the issue of the parallel currencies in history. I would not crowd out the precious conference time by dwelling on each piece of research to be presented and discussed today. Let me pause here, to give way to interesting and open exchange of opinion and deliberations which I believe this conference will stimulate. And once again – welcome to Sofia and enjoy your stay in Bulgaria! Thank you. 2/2  BIS central bankers' speeches
But to calculate the annual inflation rate at that point, we have to compare with the April 2022 bill, which had already risen significantly. Because of this base effect, even if the bill itself goes up to a higher level, it goes up by less over a year than it did in October. The annual inflation rate therefore falls sharply from 96% to 52%. The contribution to consumer price inflation from the energy bill will nearly halve. Chart 2d: Typical household energy bill Smaller of Ofgem energy price cap and Energy Price Guarantee  Page 8  Looking further ahead, say to April 2024, the outlook is more uncertain. Wholesale energy prices have come down markedly over the past few months. If they develop as futures prices now suggest, it is likely that Ofgem’s energy price cap will fall below the Energy Price Guarantee. The numbers shown here are guesstimates, but they illustrate that we might expect household energy bills to start falling. This means that annual inflation in the typical bill will eventually turn negative as the bill drops below what it was a year earlier. Energy bills will start to drag directly on overall annual consumer price inflation. But as you can see, this does not mean that we should expect household energy bills to come down to previous levels any time soon. And from a cost-of living perspective, it is the level of what people have to pay that matters.

While not the focus of my remarks today, this feature of the UK labour market is an important backdrop to our monetary policy decisions. And if we do too little with interest rates now, we will only have to do more later on. The experience of the 1970s taught us that important lesson. But equally – second – we have to monitor carefully how the tightening we have already done is  Page 12  working its way through the economy to the prices faced by consumers. Our outreach events make clear that we need to calibrate monetary policy with great care to return inflation to target sustainably. That is the best contribution monetary policy can make to a fair society. Thank you for listening  In light of all this, let me conclude with some final thoughts on how we approach the months ahead. At the Monetary Policy Committee’s February meeting, we made a very deliberate change to the way we described our view of the outlook. We moved away from what had effectively been a presumption at our previous meetings that further increases in Bank Rate would be required. In the Committee’s forecast, headline consumer price inflation was projected to fall sharply over the rest of year, more so in the second half. We recognised, however, that further tightening would be required if there were to be evidence of more persistent inflationary pressures.
In this context, various risk-rating agencies have downgraded the sovereign ratings of oil exporting countries, and further revisions for other commodity exporters – Chile included – cannot be ruled out. Our rating being unchanged is certainly good news, but let’s not forget that this is a dynamic process and we must never let go. The risk exists and it is up to our own policies to mitigate it. On the domestic front, as I just said, local interest rates are low from a historical perspective, reflecting monetary policy and external financial conditions. Thus, the downsloping trend of long-term rates continues to encourage investment in medium- and long-term mutual funds, which have reached high stock volumes. Accordingly, a significant increase in long-term interest rates poses the risk of these agents becoming a magnifying channel if they react by hastily selling off the assets in their portfolios. As for the financial situation of companies, diverse indicators confirm the weakening described in previous Reports. As of the first quarter of this year, the debt-to-GDP ratio remained near 120 percent, which is relatively high compared to other emerging economies, although at the margin it has stabilized and even declined a little (figure 11). The financial indicators of companies reporting to the Superintendency of Securities and Insurance (SVS) presented no big changes at the close of 2015. However, by historical patterns, the debt level is high and profits are low. Still, exchange rate mismatch indicators continue to show a limited exchange rate risk (figure 12).

Thus, in an OECD comparison, Chile is in the lower part of this ratio’s distribution (figure 16). Although the current capital levels are sufficient to absorb a possible severe stress scenario, gaps have narrowed. While every bank’s CAR exceeds the 8-percent regulatory minimum in the stress scenario, the share of banks having a CAR above 10 percent in such a scenario has dropped in recent years, to less than half the system’s assets in the latest test (figure 17). Let me conclude with some final thoughts. Concluding thoughts In the past several months the macroeconomic scenario has brought no big surprises, but that does not mean that challenges have been absent. Inflation has dropped in line with expectations, but remains above the tolerance range. Our projections indicate that in a few more months it will return to that range to then decline towards the 3-percent target. If this is so, we will have ended quite a long period during which inflation was at or above 4 percent and monetary policy-making has been particularly complex, as we have had to deal with a significant depreciation of our currency and the ensuing rise in prices, aside from the economic slowdown. Still we have been able to keep inflation expectations over the projection horizon well anchored to the 3-percent target. In the short term, there are obvious inflationary risks, which could again push back this convergence.
Stefan Ingves: What is a useful central bank? Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Norges Bank Symposium, Oslo, 18 November 2010. *  *  *  Thank you for inviting me to this event in the honour of my colleague of many years, Mr Svein Gjedrem. The programme of the symposium raises several highly-relevant issues for central bankers. In my presentation, I would like to talk about crisis as a momentum for change, both in what we do and how we do it. I will start from the Swedish banking crisis of the 1990s and its implications for the development of the Riksbank. I will then proceed by looking at the present situation and what conclusions we and other central banks may need to draw from the recent global financial crisis. My focus will be on nexus between monetary policy, financial stability and macro-prudential regulation. In common with all leaders, central bank managers face the fundamental issues of ”Where are we going?” and ”How do we get there”? As in most other sectors, central banking experiences changes over time and, also as in other sectors, the momentum for change is never stronger than in the aftermath of a crisis. Today, I would like to illustrate this by describing the Riksbank's thinking after our previous crisis, the changes this led to, and how we should use the current momentum for change (that is following the latest global crisis) to create a useful central bank in the period ahead.

According to an assessment by the IMF Mission that visited Samoa earlier this month, about a quarter of the tourism sector’s capacity was destroyed by the tsunami. Beyond tourism, the IMF Mission noted that the widespread damage to physical infrastructure implies that other sectors such as commerce, transport, and communication have also been directly affected. In the seven months to end January 2010, tourist arrivals increased. On the surface, any increase is good news. However, a significant number of the visitors were volunteers and overseas personnel who came to assist with the tsunami emergency and recovery efforts. Many of these people stayed in makeshift camps in the tsunami affected areas, resulting in a reduction in paid hotel accommodation. This, combined with a general decline in the other categories of tourist expenditures, saw total tourism earnings in the period under review fall 5 percent to $ million. Private remittances, which is one of the major sources of income for our people, was also affected by the recession and tsunami. In the early months of the current financial year, private remittances were well on their way down, due to the global recession. However, the huge inflows following the tsunami outweighed the earlier reductions resulting in an overall increase to $ million, in the first 7 months to end January. 2  BIS Review 49/2010  Exports rose slightly in the period under review, reflecting increases in exports of fish, coconut oil, copra meal, nonu fruit and bottled water.
Therefore, the inflation outlook in two years may be viewed as a derived objective in monetary policy. In some situations, where unexpected events lead to an inflation rate that is too high, it may be appropriate to apply a longer time horizon than two years. For example, reducing inflation to 2½ per cent within this time horizon may be associated with unnecessary real economic costs. A precondition for applying a longer time horizon is that there is clear evidence of strong confidence in low and stable inflation over time on the part of economic agents. Gradually, as we gain experience with setting interest rates according to an inflation target, the possibilities for placing emphasis on stability in the real economy will probably increase. Low and stable inflation is a necessary precondition for stability in the foreign exchange and financial market and the property market. However, there have also been episodes where bubbles have accumulated in these markets, in the form of sharp increases in asset prices, while inflation has been low. Price increases in property and financial markets may have a considerable impact on wage growth and consumer price inflation after a period. When the bubbles burst, the result may be an economic downturn. In this way, developments in financial and property markets may be a source of a more unstable inflation environment. In principle, it would be appropriate to use the interest rate to counter this. In practice, however, it is difficult to assess whether price trends in property and financial markets are sustainable.

The model seeks to take account of many of the important relationships in the Norwegian economy. The model combines and takes account of empirical and theoretical knowledge of these relationships as they have functioned in the past, and contributes to a more consistent analysis of the interaction between them. It takes time for structural changes to be captured in the model. It may therefore be useful to analyse the effects of any structural changes in previously existing relationships. For example, it may be useful to ask whether the effects on consumer prices of changes in the exchange rate are different now that the exchange rate fluctuates more than it did in the past. In our experience it is not possible to make forecasts that prove to be accurate in all respects. By revealing errors, we provide a basis for improving the analysis. Our projections are therefore evaluated regularly. Analyses of forecast errors have been presented four times in the journal Economic Bulletin. Excerpts from these evaluation articles are also presented in the Inflation Report once a year. Concluding remarks In all countries with which it is natural to compare Norway, the setting of interest rates, the most important monetary policy instrument, is delegated to the central bank. A number of factors help to explain why the exercise of this authority is delegated.
Improved competitiveness indicators, in particular declining unit labour costs and the relatively robust export performance, point to a more lasting effect of the structural reforms undertaken so far. The framework of the European Semester and the macroeconomic imbalance procedure have provided additional tools to secure further progress in terms of structural adjustments in the euro area that will put the euro area in a position to make a positive contribution to global growth and employment creation. 2  BIS central bankers’ speeches

Before proceeding to a more in-depth analysis of the topic, allow me to clarify an issue that was subject to previous public debate. The National Bank of Romania has nothing against wage hikes. Quite the opposite, we might say. The Romanian economy could only benefit from an increasingly fast rise in wages, in order to enjoy a higher living standard, surmount the historical disparities that separate us from the Western economies and put a stop to labour force migration. Nonetheless, we must analyse with a clear mind and assert bluntly that a mismatch between pay rises and labour productivity gains is unsustainable. Wage hikes in excess of labour productivity are not likely to bring about a higher living standard, but on the contrary, they may lead to a lower living standard, given that, sooner or later, the disparity between the two fundamental indicators will entail a fast-paced rise in prices, the weakening of domestic currency, external indebtedness. All this has a negative influence on  BIS Review 162/2008  1  investment and delays the achievement of real convergence of the economy rather than speed it up. Over the past few years, annual productivity gains came in at impressive 10% and beyond each year. Multiple factors stood behind this performance, such as the initial low level, the significant decline – even if not always illustrated by statistical indicators – in the population working in agriculture and, highly important, the strong increase in investment.