samchain/econo-pairs-v1 huggingface dataset:
Alternatively, the difference might reflect the disparity between the subjective probability distributions of the marginal investor and the average survey respondent – and therefore measure the dispersion in beliefs between the two. Under this interpretation, the marginal investor in the futures market was much more pessimistic – in other words, placed more probability on low rate outcomes – than the average survey respondent in December, while by January the average survey respondent revised her beliefs downward. Note that the marginal investor in the futures market likely changes over time, and this change can be an additional source of fluctuations in the gap between market-implied rates and mean projections. Unfortunately, we have no direct measure of the beliefs of the marginal investor. But we can obtain evidence on whether the dispersion in beliefs fell from December to March by looking at the dispersion of beliefs among survey respondents. One measure of such dispersion in beliefs is the extent to which the KLIC varies across respondents. A high (low) KLIC means that the respondent’s forecast distribution requires substantial (little) tilting to deliver the market-implied rate. Slide 14 shows, in the bars outlined in light blue, the KLIC distribution  53  Brodsky et al. (2016b). 54  Note that this distribution is constructed by tilting the average of respondents’ probability distributions. Alternatively, we could have tilted the probability distribution for each respondent and then averaged across these tilted distributions. While the two approaches do not, in general, deliver the same answer, in this case they almost do.

We have taken the option though that central banks should be trying to put up a good system for people to operate in rather than having another prime function of catching thieves and criminals, and in this legislation therefore a new independent government office has been put up dedicated solely to the pursuit of the articles of the legislation. We sit on the committee under the legislation as I have just said, and cooperate wherever we can to make sure its execution is effected and effective. This is another occasion where central banks contribute directly to peace in that criminal activities which by nature are not peaceful is kept to a minimum. Speaking of criminal activities, vote buying in an election is also a criminal activity and although legislation makes it difficult for us to tackle this problem, we cooperate with the Neutral National Election Commission in tracking down movement of funds and we have assigned an assistant governor to directly coordinate with this Commission. The banking laws in Thailand at present though is that banking activity is secret and this inhibits us from doing as much as we could to help in curbing this criminal activity.
3  The concept of a “risk-taking channel” was introduced by Claudio Borio and Haibin Zhu in “Capital regulation, risk-taking and monetary policy: a missing link in the transmission mechanism?” BIS Working Papers No 268, 2008. This paper also reviews the different mechanisms the risk-taking channel consists of. 4  The banks’ assessment of risk can in turn affect the size of the leverage they allow. Variations in leverage also affect the price of the asset and are an important driving force in what are known as the “leverage cycle”; see  2  BIS Review 164/2010  instance, that they make a more optimistic assessment of the expected default frequency. This channel can be said to function as a form of multiplier in the sense that it reinforces the effects of interest rate changes on the economy. Finally, the central bank’s communication can also contribute to increasing risk taking. This may occur, for instance, if the participants in the economy perceive that the central bank is acting asymmetrically, to the extent that it reacts strongly once a crisis occurs, but remains passive during the period while the risks are building up. Such action may be interpreted as a form of insurance that allows agents to take greater risks than they would otherwise have done, as they rely on the central bank always being prepared to intervene and resolve the situation if things go wrong.

One can briefly say that the first area concerns monetary policy sometimes having unexpected effects, the second concerns it having much less effect than normal and the third concerns monetary policy receiving support from, but sometimes possibly also being counteracted by, measures that are primarily aimed at maintaining financial stability. I will run through these areas one by one and explain in more detail what I mean. But first I would like to clarify something. The fact that I am raising these issues should not be interpreted as my trying to make a point about how the world looks with certainty. Although some of the ideas are in line with my own reasoning in the monetary policy discussion, others are relevant from a more general perspective. These are simply issues I think are of current interest and which I believe will be discussed in the coming period. BIS Review 164/2010  1  Can expansionary monetary policy increase risk taking in the economy? A central component in the financial crisis was what has sometimes been called a North Atlantic property bubble. 1 In the United States and a number of other countries, such as Ireland, Spain and the United Kingdom, property prices had increased substantially over a number of years, accompanied by a large expansion in credit. Property prices then fell drastically in the crisis. There is no individual explanation for this development – it is due to a number of interacting factors.
The other explanation as to why inflation in Sweden is remaining close to the target despite the low resource utilisation is that there are other factors than resource utilisation which exert upward pressure on prices. One such factor is that unit labour costs have been increasing by around 5 per cent a year during the period 2007-2009. Slightly higher wage agreements, but above all falling productivity, have contributed to pushing up unit labour costs, something that will change in the future as companies reduce their workforces. Another factor that is underpinning inflation is the weak krona. Given this, the assessment I made at the most recent monetary policy meeting was, as I recently mentioned, that there was no reason to worry about either deflation or high inflation during the forecast period. Resource utilisation is not so low that it could lead to deflation, but it is sufficiently low to prevent inflation from becoming too high. The second question I would like to take up is the limits for stabilisation policy. There are limits as to what stabilisation policy can achieve with regard to alleviating the consequences for the Swedish economy of such a powerful and global economic recession as the one we are undergoing. For fiscal policy the limits are set by what is considered compatible with a long-term sustainable development in public sector finances. Monetary policy is to some extent limited by the fact that there is a floor under which the repo rate cannot be cut.

It can be used to assess whether the letters convey a clear and consistent supervisory message to firms. For example, it is possible to compare the strength and content of these letters with the Bank’s internal assessment of firms’ strengths and shortfalls. Are the two, and the Bank’s supervisory messaging, consistent? In general, the research found they are. This approach can also be used to assess how the style of supervision has evolved over time. For example, how has it changed since the transition in supervisory models from the Financial Services Authority (FSA) to PRA? The research finds that supervisory messaging has become more forward-looking, formal, and content-rich comparing the two regimes, consistent with the PRA’s new supervisory model. This exercise is, I think, a good example of a new technique (random forests) being applied to an entirely new database (the Bank’s supervisory assessments) in a policy area virtually unexplored previously by researchers (financial firm-specific supervision). It reaches conclusions that have a direct bearing on policy questions. As such, I think it highlights nicely the promise of Big Data. 43 44 45  Notable examples include Schonhardt-Bailey (2013) and Goldsmith-Pinkham, Hirtle and Lucca (2016). Haldane and McMahon (forthcoming). Bholat et al (2017). 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  My final example uses not newly-created but old data. Nonetheless, I think it provides a good illustration of how new techniques can also be used to understand the past.
1) Percent 10 9  10  Equities Fixed income  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1 0  0 1999-2009  2010-2019  1) At 30 September 2019. Source: Norges Bank  The rise in equity prices has largely been driven by a fairly small number of companies. US corporate profit margins have increased markedly. The big earners have been the tech giants, which typically operate in markets where there are substantial profits to be gained as the dominant company. Their profits have drawn growing attention from competition authorities and higher taxation is under discussion internationally. Current valuations are based on expectations of sustained profit growth. This entails a downward potential. 6  Developments in the fund’s value over the past decade must also be seen in the context of the decline in global interest rates over time. The interest rate decline reflects the expansionary monetary stance prevailing since the financial crisis. Central bank policy rates were reduced to very low levels in many countries in order to stimulate economic activity. Several central banks have also engaged in substantial asset purchases, which has pushed down long-term interest rates further. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  But low interest rates also reflect other driving forces such as population ageing, high saving in emerging economies, growing inequality and a general decline in productivity growth.

Percent 400  400  350  350  Projected value of GPFG in 2020 in different national budgets  300  300  250  250 Present value of remaining oil revenues  200  NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  200  150  150  100  100  50  50 0  0 2012  2014  2016  2018  2020  2020  Source: Ministry of Finance  The conversion has reduced the sensitivity of government revenues to oil price fluctuations, but has increased our exposure to global financial market volatility. The fund has built up a diversified portfolio of investments worldwide, which allows it to reap the gains from an upturn wherever it may occur – and means it is shielded from negative events in individual markets. But the fund is not immune to a broad-based downturn. As a small, open economy, Norway has always been exposed to global economic developments. The substantial foreign assets we have accumulated mean that our economy is even more closely intertwined with the world economy. It is then unfortunate that the rule-based order for world trade since 1945 is losing ground. Bilateral and regional agreements are gaining ground at the expense of multinational cooperation. This contributes to uncertainty about the outlook for the global economy. The value of the natural resources we found the first traces of 50 years ago has in large part accrued to society as a whole.
321–349 Kashyap, A, Rajan, R and Stein, J (2002), “Banks as liquidity providers: An explanation for the coexistence of lending and deposit-taking”, The Journal of Finance 57, 33–73. Lainà, P (2015), “Proposals for Full-Reserve Banking: History and Critique from David Ricardo to Martin Wolf”, Department of Political and Economic Studies, University of Helsinki, Finland. Lowe, P (2015), “The transformation in maturity transformation” speech given to Thomson Reuters’ 3rd Australian Regulatory Summit, Sydney, 27 May 2015. National Savings and Investments (2008–09), Annual Report and Accounts available at http://nsandi-corporate.com/wp-content/uploads/2014/02/13428-Annual-Report-Web.pdf Pennacchi, G (2012), “Narrow banking”, Annual Review of Financial Economics, Vol. 4, pp. 141–159, 2012 Rogoff, K (2014), “Costs and benefits to phasing out paper currency”, NBER Working Paper No. 20126 Shafik, M (2016), A New Heart for a Changing Payments System, speech given at the Bank of England. Simons, H, Cox, G, Director, A, Douglas, P, Hart, A, Knight, F, Mints, L, Schultz, H (1933): “Banking and currency reform”, Manuscript. [Reprinted in Samuels, Warren (ed.) (1990): Research in the History of Economic Thought and Methodology. Archival Supplement, Volume 4. Greenwich, CT: JAI Press.] Tobin, J (1987),”The Case for Preserving Regulatory Distinctions”, Federal Reserve Bank of Kansas City, 1987, pp. 167–183. Walport, M (2016), “Distributed ledger technology: beyond block chain”, Council for Science and Technology. Wolf, M (2014): “Strip private banks of their power to create money”, Financial Times, 24 April 2014. Yermack, D (2013), “Is Bitcoin a real currency? An economic appraisal”, NBER Working Paper No. 19747.

And if a private-sector digital currency uses the technology to substitute for a third-party clearer, the central bank counterpart would do the opposite. The aim would be to widen access to the central bank’s balance sheet, beyond commercial banks. There’s no rigid correspondence here: in principle, one could introduce the technology and preserve the current arrangements, under which it is commercial banks that hold central bank deposits; it’s also possible to increase the number of counterparties without it. But the distributed ledger would probably make it easier to do so. That might mean adding only a narrow set of counterparties – perhaps a wide range of non-bank financial companies, say. It might mean something more dramatic: in the limiting case, everyone – including individuals – would be able to hold such balances. So although they might share the same technology, and the same name, the private and central-bank versions of a digital currency are actually rather different. The one would expand what the other seeks to replace. BIS central bankers’ speeches  1  As far as its economic effects are concerned, my guess is that much would depend on how exactly a central bank digital currency (CBDC) is designed – and in particular the extent to which it competes with the main form of money in the economy, commercial bank deposits. As individuals, we already have the ability to hold claims on the central bank, in the form of physical cash.
I am "cautiously optimistic" that the overseas environment will improve as we move through the year, and that by this time next year we here in the UK will have seen a return to somewhat stronger and better balanced growth, with unemployment not far above its recent lows, and with continuing low inflation. If that is indeed how things turn out, we will have weathered the international storm as well as anyone could reasonably have expected. So it is in the hope - and indeed the expectation - of improving prospects for the internationally exposed sectors of British manufacturing that I ask you all now to rise and to join me in a toast to the Engineering Employers Federation, and it's President, Mr Paul Lester. BIS Review 10/2002  3

Richard W Fisher: Monetary policy and an annual Texas economic review Remarks by Mr Richard W Fisher, President and Chief Executive Officer of the Federal Reserve Bank of Dallas, before the Dallas Business Club, Dallas, Texas, 3 December 2014. *  *  *  The charts can be found at the Federal Reserve Bank of Dallas’ website The views expressed by the author do not necessarily reflect official positions of the Federal Reserve System. Thank you, Alden [McCall]. I feel right at home in a room full of MBAs. As many of you know, I am not a PhD economist like the majority of my colleagues sitting on the Federal Open Market Committee (FOMC). I admire my colleagues tremendously for their intellectual capacity and their well-trained insights into the dismal science of economics and the arcana of monetary policy, but I am proud of just being an MBA. I was privileged to attend all those schools Alden mentioned: the Naval Academy, Harvard and Oxford. But I feel that the MBA program at Stanford Business School prepared me best for my career as a banker, a money market operator, and for the past decade, a policymaker at the Federal Reserve. (Though plebe year at Annapolis probably best equipped me for the sleep deprivation and the pressure we operated under during the financial crisis). So Alden, I begin with a tip of the hat to the MBAs you have assembled this evening.
Finally, I would like to mention the necessary action by government, in at least two areas of its competence. The first is fiscal policy. One of the major advantages of the fiscal consolidation drive during the long period of expansion of the Spanish economy is that the government budget mechanisms, known as automatic stabilisers, can now operate fully. These mechanisms act rapidly, promoting confidence and facilitating agents’ formation of expectations. However, the activation of fiscal policy measures of a discretionary nature must be prevented from jeopardising budget stability in the medium and long-term, since this would entail costs far exceeding any potential benefits that might be had in the short-term. The second area of action is that of measures of a structural nature aimed at improving the functioning of certain markets, increasing the flexibility of wage and price formation mechanisms and expediting the reallocation of factors across sectors of the economy. For this task to be successful, the responsible co-operation of the social partners is also crucial. To go into these matters in depth would need a whole conference in itself, so I shall conclude on this point, but not before reiterating once again the main idea I wish to leave with you today. The Spanish financial system has not participated in the causal factors of the current international financial turbulence and this, together with its financial soundness, puts it in a favourable starting position.

Where many earlier forms of crypto-assets, such as bitcoin, have proved unsuitable for widespread use in payments, stablecoins, and particularly global stablecoins, aim to do just that. Not all stablecoins are 5  Bank of England data. These figures exclude Giants and Titans (i.e. higher value notes used as cover for the note issues of banks in Scotland and Northern Ireland). 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  intended for use in making payments. Some stablecoin proposals may be used to facilitate investments. However, where a stablecoin is used to facilitate the transfer of ‘money’ for buying goods and services and the settling of debts, then it may become widely used a means of payment and store of value. Global stablecoins seek to apply new technology, stemming from the world of crypto-assets, as well as changing some of the fundamentals of the underlying payment chain. They change not only how you pay but what you pay with – rather than a transfer of money between bank accounts, stablecoin systems transfer the asset itself – the stablecoin – from one person to another. Stablecoins could offer some useful benefits. For example, they could further reduce frictions in payments, by potentially increasing the speed and lowering the cost of payments (particularly if global stablecoins were to be established). Stablecoins may offer increased convenience, including via integration with other technology, such as social media platforms or retail services.
One reassuring point is that the major UK banks and building societies were tested against precisely this scenario by the Bank of England in 2015 and demonstrated they had the resilience to weather such a shock and carry on lending to the UK economy. Conclusion Looking back over the last two years, I think that the slow healing story can still explain where we are and provide a guide to our future prospects. But the story has to be adapted in the face of more UK and world weakness than I had expected and this weakness might be signalling that there are deeper structural factors at work. Nonetheless, my central projection remains that the UK economy will continue to grow solidly and that inflation will return to target over the next few years. But, as always, policymakers need to be alive to the possible meaning of disappointments, to be very sensitive to the possibility of changing temperatures around them, and to the risk of unfortunate events. We have a range of tools at our disposal and should be ready to use them whichever risk materialises. BIS central bankers’ speeches  7

Although there is a considerable stock of equity in owner-occupied housing, with banks tightening the supply of both secured and unsecured credit, consumers will find it more difficult to borrow to finance spending. So in 2008 it is likely that a less buoyant housing market will go hand in hand with slower growth of consumer spending. Tighter credit conditions mean that, as a nation, we are likely to save more of our income this year than in the recent past. In the short run, that will slow economic activity, possibly quite sharply. And there is a risk that weaker activity and lower asset prices could result in another round of losses for banks and a further tightening of credit conditions. The adjustment which not only the British but the world economy is experiencing is necessary as the imbalances, between spending and saving and between domestic demand and trade, unwind. As part of a longer-run rebalancing of the UK economy, an increase in our national saving rate, both private and public, is necessary. The low level of national saving is apparent from the current account deficit – our new net borrowing from overseas – which in  2  BIS Review 8/2008  the third quarter of last year was, relative to GDP, the biggest in the past fifty years and the largest in the G7. It is possible to run a current account deficit for a considerable period. Australia, for example, has done so in every year since 1974.