samchain/econo-pairs-v1 huggingface dataset:
Over time, and as long as inflation is on average in line with prior expectations, the change in the ratio of debt to GDP (b) is given by (r – g)b – d, where d is the primary deficit. This is stable – for given d it tends over time to revert to a steady state level (b* = (g-r)/d) – only if the term multiplying b is negative, i.e. g > r. With risk-free real interest rates comfortably below zero in developed economies this condition seems to be fulfilled at the moment, though that’s not always been the case. When r > g the debt ratio is no longer stable – unless d changes accordingly, small changes in r or g would put b on an unstable path. For more on the implications of g > r see Blanchard (2019) and Mehrotra and Sergeyev (2019). 12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12  The blue line in Chart 8 depicts the results of a stylised experiment in which inflation rises permanently, and without any warning, by 1  Chart 8: Surprise inflations can reduce public sector debt though when g > r the effect is ultimately temporary  percentage point (from 2% to 3%). There’s a corresponding rise in inflation expectations, and therefore nominal interest rates and bond yields as well, but only at the time inflation itself goes up.

At the same time, in the context of the forthcoming establishment of a Single Resolution Mechanism in Europe, national Governments may consider it warranted to make some adjustments to the current institutional settings. Indeed, the new European resolution framework will bring a transfer of competences to the Single Resolution Board and, more importantly, a smaller role for taxpayers’ money as a consequence of the bail-in requirements specified in the BRRD and the availability of a resolution fund, which will be fully funded by private contributions from the industry. Indeed, if the bail-in clauses in the BRRD had been enforceable in 2012 and the SRM had been established – including the availability of a fully funded Single Resolution Fund – the banking crisis in Spain could have been fully resolved with very limited contribution from the Government. Then, since taxpayers’ money is likely to be required only in relatively rare situations, this will strengthen the case for delegating resolution actions and decisions to an independent body, such as the central bank or an ad-hoc agency, as already occurs in many jurisdictions. Frankly, I believe that – provided the public budget is not significantly involved – banking resolution should be subject to an institutional setting similar to that of banking supervision, in which delegation to an independent prudential authority has long been successful in most jurisdictions.
If the rules proved to be flawed, they should still be enforced, for credibility’s sake; but later changes should be made to the rules. BIS central bankers’ speeches  1  •  Animating spirit of ‘prudential supervision’ is completely different. Impossible to write down a complete (or even adequate) set of binding rules on the financial health of a bank (or on the substance of the professional competence of bankers). Instead, things like capital ratios or liquidity ratios are really indicators of financial health. •  This is reminiscent of an old debate in monetary policy. Thirty-odd years ago, policy was meant more or less mechanically to follow targets for broad or narrow monetary aggregates. It didn’t work: the economic world was not sufficiently stable. Since we adopted inflation targeting, central banks have had an eclectic approach to indicators. We are constrained by a clear medium-term objective (2% CPI target), but do not use a set of supposedly fool-proof core intermediate indicators. •  No more can we write down hard and fast rules on bank balance sheets. •  Nor, consistent with Parliament’s wishes, is the Prudential Regulation Authority seeking to achieve a zero failure regime. The failure of individual firms has to be an acceptable outcome so long as they can be wound down in an orderly way.

Caleb M Fundanga: Corporate social responsibility - challenges that the private sector in Zambia should overcome Key note address by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Mufulira District Advisory Committee’s 2006 Business Forum, Mufulira, 18 March 2006. *  *  *  CHAIRPERSON, YOUR HONOUR THE MAYOR OF MUFULIRA MUNICIPAL COUNCIL, THE DISTRICT COMMISSIONER, THE TOWN CLERK, DISTINGUISHED INVITED PARTICIPANTS, LADIES AND GENTLEMEN On behalf of the Bank of Zambia and indeed on my own behalf, allow me to thank you for this invitation to Mufulira. It is an honour to be invited to this important Forum to share a few words with the business community on the issue of Good Corporate Citizenship. In view of the growing role of the private sector as a partner in economic development in Zambia, this topic could not have come at a better time than now. In fact, when I was invited to come here by the Municipal Council, I took a bit of time to reflect on the challenges good corporate citizens face. On the outset, it is imperative to realise that despite the moral ethics that come with being a responsible and good corporate citizen, advantages can also be exploited by strengthening the synergies between private sector growth on the one hand and social, economic and environmental development on the other. In view of this, I prepared my address within the context of the underlying theme “Corporate Social Responsibility: Challenges that the Private Sector in Zambia Should Overcome”.
This will require the approach to be comprehensive, meeting the highest standards and in close collaboration with the industry so that the learning solutions will continue to remain relevant. The breadth of talent development solution Human capital development needs to be comprehensive and holistic in meeting the requirements for all levels. The horizon of talent development solutions has to be widened towards attracting, developing and retaining talents with required skills and expertise for the industry. It must also meet the specific requirements of the workforce career progression, from the pre-employment stage, during employment and up to the leadership positions. Talent development solutions must also be for beyond the circle of the financial services community, to include other business communities, such as legal fraternity, Government officials and IT solution providers. The advancement of the industry is also dependent on these parts of the private and public sector. Their training needs must also be met through structured training programmes to facilitate their understanding of the specificities of Islamic finance and its value propositions. Raising standards of training and education programmes The education and training programmes in Islamic finance also needs to achieve the highest quality, be credible and globally recognised. The qualifications developed need to fulfill the expectations of the industry. To ensure the standards, the required infrastructure for standard setting and accreditation for Islamic finance training and education has now been put in place.

In total, more than 51 billion coins had been minted and around 16 billion banknotes printed at the end of 2001. The second phase of the operation involved putting the new currency into circulation and withdrawing national banknotes and coins, an operation that impacted the 300 million inhabitants of the euro area and many more outside it. Things worked out well because of good preparation: advance planning, communication, co-ordination and thorough follow-up and control have all been vital. It is worth mentioning the success of the slogan “the euro. Our money”, which reached a worldwide audience through television and newspaper advertisements, web pages, starter kits, and the 200 million leaflets written in a total of 38 official European languages, regional languages of European countries and other world languages. On 1st January 2002, the reception of the new currency was surrounded with confidence and, even, an element of enthusiasm across the euro area. The mandate of the ECB The citizens of the euro area received the new currency with a sense of confidence. But since the euro was not created in an institutional vacuum, it is important to recall which factors have enabled us to make the euro a credible currency which was immediately adopted. I would name here, most importantly, the institutional framework of Economic and Monetary Union. The Maastricht Treaty has written in stone that monetary policy is to be conducted with the aim of maintaining price stability and that the ECB is fully independent.
The desire to guarantee the purchasing power of our currency underpinned the link established in the past between the franc and gold, and it was this same concern that led Switzerland, in 1973, to abandon the fixed exchange rates of the post-war period, which were undermined by widespread lack of discipline. The objective of price stability is now inscribed in law, which reinforces its legitimacy. Our monetary system is thus now as clearly defined as it used to be under the gold standard. We define price stability as an annual rate of inflation of less than 2%. We were able to maintain such stability in the course of the past year, and I am pleased to note that this objective has been reached in each of the past ten years - an unparalleled achievement internationally. It is a modest, but highly important, contribution to the prosperity of our country. Our history has shown that inflation - or deflation - can have damaging effects that often cause suffering to the most vulnerable members of our society. One of Switzerland’s traditional values is this concern for price stability. It is a significant achievement that the National Bank will endeavour to preserve in the years to come. The new Act also stipulates that we must take due account of the development of the economy in setting any course of action. There can be no doubt that monetary policy has short-term repercussions on economic activity.

While consumer spending has held up well in the past two years, it is expected to gain momentum as the economic environment brightens. Consumption will thus continue to support growth, though it will probably cede pride of place to more cyclical components such as capital expenditure and exports. It will benefit, in particular, from the gradual improvement that will be seen on the labour market. At this stage of the economic cycle, of course, we must first expect gains in productivity, which means that unemployment will only decline slowly. Nevertheless, here too, the medium-term outlook is now good. The scenario for a recovery that I have presented is, needless to say, full of imponderables. The risks are everywhere. They may take the shape of an uptrend or a downtrend. We can thus not rule out the possibility that the international economy will show more robust growth than anticipated. A swift build-up of inventories, for example, would appreciably accelerate the cycle. But the downside risks could also be triggered at any time by new political disorders. Given the significant internal and external imbalances throughout the world, such unrest could fuel greater volatility on the currency and equity markets. The strength of the recovery is also uncertain. In the United States, the economic recovery, which has been driven largely by tax breaks, is not yet firmly in place; households, labouring under a heavy debt burden, may be frightened by the slow pace of job growth.
Another consideration is that notwithstanding the low growth of demand, inflation has been surprisingly high. These forces have acted with varying strength on the Riksbank’s inflation forecasts in recent months. Roughly speaking, when economic activity is slowing — with a given potential growth rate — after a time inflation falls back. A weak exchange rate pulls in the opposite direction, however, and can lead to higher price increases: directly through rising import prices and indirectly by stimulating production for export. In addition, abrupt exchange rate movements are liable to affect inflation expectations, a problem that is accentuated when inflation is springing unpleasant surprises. The krona’s weakening in the early summer, after the Riksbank had presented this year’s second Inflation Report, probably had to do with a combination of slackening export activity and portfolio adjustments. Moreover, inflation outcomes in the late spring had been surprisingly high. If higher inflation expectations are allowed to take root and also show up in time in a currency depreciation, public confidence in monetary policy’s systematic commitment to a rate of inflation in line with the 2 per cent target may be shaken. The weakening of the exchange rate in that period was an isolated Swedish phenomenon, which made it particularly serious. The krona also weakened in the aftermath of the terrorist attacks on 11 September but the circumstances then warranted a different interpretation. General uncertainty in the financial markets was accompanied by extensive portfolio adjustments after the terrorist attacks.

BIS Review 86/2001  1  In connection with increasing signs in August of a more marked economic slowdown in the rest of the world as well as in Sweden, share prices started falling again. For the krona, which had appreciated in July, this was a negative factor in the same way as it had been during the spring. Early in the autumn the picture of an international economic slowdown became even more accentuated. A number of indicators pointed to a worsening of demand in the United States even before the terrorist attacks. The uncertainty stemming from the attacks was liable to subdue demand in the rest of the world even more. After the U.S. Federal Reserve and other central banks had cut their instrumental rates on 17 September, on the same day the Riksbank decided to lower the repo rate 0.5 percentage points. An increased risk was perceived of inflation two years ahead being below the target, mainly because business and household confidence in the future might weaken and lead to a slowdown that was deeper and more protracted. The terrorist attacks led to great uncertainty in the financial markets. From what I have now said it will be clear that in recent months monetary policy has taken its cue from declining economic activity. GDP growth has slackened from a level of 3 to 4 per cent in recent years to a rate of between 1 and 1.5 per cent. Meanwhile, since last year the krona has depreciated by around 15 per cent.
As always, the views presented here are my own and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.1  Money-like assets versus safe assets Money-likeness and safety, although closely related, are not completely overlapping concepts.2 Safety refers to an asset’s lack of actual and perceived exposure to risk, including credit risk, counterparty risk, interest-rate risk, and market risk.3 Money-likeness refers to an asset’s lack of information sensitivity, such that, when it is used in transactions, economic agents need not worry about its future value, at least in the short term and in most states of the world.4 Because of this, money-like assets are usually short-term, liquid assets with no credit or counterparty risk, promising a fixed payment in nominal terms.5 In normal states of the world, investors tend not to distinguish too carefully between and among money-like and safe assets. However, in non-normal states of the world, where investors have heightened perceptions of risk—partly because of underlying credit or counterparty issues, but also critically because of uncertainty about the actions of other investors—investors tend to view directly-held liabilities of the official sector as substantially safer than those of the private sector. In these non-normal states of the world, central banks have the unique ability to quickly produce large quantities of assets that are both safe and money-like.

François Villeroy de Galhau: What responses to terms of trade shocks in poor and vulnerable countries? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Bank of France-FERDI (Fondation pour les Etudes et Recherches sur le Développement International) conference, Paris, 24 January 2017. * * * Good morning and welcome to all in the auditorium of the Banque de France. It is a great pleasure to welcome you here with Patrick Guillaumont, President of FERDI and coorganiser of this conference, to whom I extend my warmest greetings. I would also like to welcome Jan Gunning, Professor Emeritus at the Free University of Amsterdam, as well as all the speakers who honour us with their presence. The Banque de France has established research partnerships with several foundations and universities: the Paris School of Economics, the Toulouse School of Economics and the Fondation nationale des Sciences politiques. The partnership with FERDI (Fondation pour les études et recherches sur le développement international), which we are pleased about, focuses on extending and enriching discussions and research on monetary and financial issues related to development, including: the financing of development, in particular the mobilisation of domestic and international savings, the competitiveness of African countries and exchange regimes and strategies, regional integration in Africa, which was the theme of our first conference in 2014, the “curse” of commodities in low-income countries, and the management of the Dutch syndrome and the terms of trade cycles, i.e.
Such a scheme would have a strong impact on trust and contribute to increased risksharing, insofar as it is designed as a fully fledged mutualised EDIS. Contributions to EDIS taking into account bank-specific risks could limit the risk of permanent crosssubsidisation and would also help deal with the sovereign-bank nexus. This would contribute to reducing the link between national governments and banks and preventing destabilising cross-border flights to safety in the event of difficulties. Moving towards a Capital Markets Union The other key initiative to increase the integration of Europe’s financial markets and to facilitate risk-sharing capacity in EMU is the Capital Markets Union project. The project aims at providing firms with the same funding opportunities, and households with the same saving opportunities, irrespective of the member state in which they are located. 7/11  However, inconsistent regulations, as well as varying market practices and industry standards across EU countries, prove to be key impediments in developing a truly pan-European capital market. As a result, country savings and investments are still highly correlated, a fact known as the Feldstein-Horioka puzzle. This correlation has subsided over time in the case of the European Union but is still sizable, which is more bewildering in the case of the currency union. A departure from perfect capital mobility has important economic implications, as it might be leading to lower aggregate investment, a higher home bias in investment decisions and a lack of portfolio diversification. The Capital Markets Union project has received a stronger push over the last few months.

The sustainability and continuity of effective policy management depends on the performance of public institutions that have sound policies and governance processes that are formalised in a clear, structured and well-defined framework. Equally important is the accountability. In this aspect, the institutionalisation of policies and processes, which culminates in sound governance serves to preserve good practices and imposes the necessary discipline for objective policy making. The gaps in the market infrastructure in the emerging economies however increase the vulnerability of our respective economies to external shocks. Such shocks have increased in frequency and magnitude, with the risk of prolonged implications on our economic growth. With its important role in the management of domestic macroeconomic and financial stability, Central Banks in this changing environment also need to be strengthened in order to enhance its effectiveness in facilitating conditions to support economic development. My remaining remarks this afternoon will focus on institutional building and economic development from the perspective of Central Banks in emerging economies. In particular, on the role of Central Banks in supporting the development agenda and as an institution building agent.
This will result in unsound investments and wider fluctuations in the economy. It is also important to avoid deflation, a fall in prices, because this often accompanies and can amplify a downturn. Low and stable inflation provides households and enterprises with a clear indication of changes in relative prices. This makes it easier to make the right decisions and contributes to price stability in financial and property markets. This is the best contribution monetary policy can make to economic growth and stability. A number of studies have looked at the effects of high inflation on the real economy, see for example references in Qvigstad and Røisland (2000). We have had four periods of very high inflation over the past 100 years: during the two world wars; the Korean War and a 15-year period from the first half of the 1970s to the second half of the 1980s. In Norway, very high inflation is a wartime phenomenon and a 1970s and 1980s phenomenon. Substantial real economic losses and financial instability have followed in its wake. Inflation was a costly affair. BIS Review 59/2002  1  The fourth period of high inflation was unlike the three previous periods. In the 1970s and 1980s, inflation accelerated gradually. It was not as high as during the two world wars, but it took a long time for the level to fall. The fixed exchange rate system of the post-war period, the Bretton Woods system, broke down in 1971.

Interest rates are changed more gradually with less impact on output than under a strict inflation target, and inflation is allowed to deviate from the target over a somewhat longer period. This is called flexible inflation targeting. (See for example Svensson (2000).) Flexible inflation targeting both provides the economy with a nominal anchor and contributes to smoothing fluctuations in output and employment. In the countries that normally figure in our comparisons, the responsibility for monetary policy has now been delegated to a central bank. The first and most widely known examples of independent central banks are the Bundesbank and the Federal Reserve. The delegation of monetary policy decisions to an independent central bank also finds support in economic theory. It contributes to securing credibility, confidence and consistency because an independent central bank must adhere to its mandate. This increases the scope for monetary policy to contribute to stability. For a discussion of central bank independence, see Hylland (2000). The benefits of autonomy are related to the way in which it induces economic agents to look ahead when making decisions. They take into account economic policy as they expect it will be tomorrow and the day after. It is thus important that the authorities do not sow doubt, but on the contrary act in a predictable manner within a long-term framework. The authorities must be credible and inspire confidence. There must be consistency between the stated objectives of economic policy and what is actually done to achieve them.