samchain/econo-pairs-v1 huggingface dataset:
Our most recent inflation forecast indicates that inflation will approach the target a couple of years ahead, on condition that the repo rate is gradually increased. However, forecasts are of course uncertain. In addition to the usual uncertainty regarding developments in economic activity, it is very difficult to determine the durability of this type of structural change. Is, for instance, the upswing in productivity we have seen in recent years only temporary or is it a more permanent improvement? There is a discussion that inflation could remain low over a long period of time, as a result of structural changes in a globalised economy 2 . The question is what the consequences would be if we were to respond to such a development by conducting a very expansionary monetary policy over a long period of time to bring inflation back on target. What would happen to economic activity, the exchange rate, domestic inflation, asset prices and household and company balance sheets? Probably, such a situation would lead to risks in both the real economy and the financial economy, resulting perhaps in overheating in the economy, high domestic inflation and rapidly rising asset prices. However, if we on the other hand were to allow the inflation adjustment to take a long time, how would this affect confidence in the inflation target? How long can inflation deviate from the target without this affecting confidence and without the inflation target being perceived as meaningless? These are difficult considerations that I assume many of you have also reflected on.

A more gradual change in the interest rate can also be justified by the uncertainty of the forecasts and statistics. Monetary policy is normally aimed at attaining the inflation target within two years. This horizon is justified by the fact that monetary policy's impact comes after a time lag, but also by the desire to contribute to subduing fluctuations in activity in the real economy. By aiming to allow some time before the inflation target is attained, the Riksbank can contribute to stabilising the development of the real economy, but at the same time we must safeguard confidence in the inflation target. Taking into consideration developments in the real economy must not mean that the price stability target is set aside. The two-year horizon provides scope for flexibility but at the same time sets a limit for how large the deviations from target can normally be. The fact that we have chosen to specify an exact target for inflation is an expression of our desire to be clear and open. This is also why we have explicitly stated that inflation will normally be returned to target within two years. Similarly, the deviation interval around the inflation target aims to explain that monetary policy cannot, and does not, attempt to exactly attain the target all of the time. The deviation interval thus also emphasises that there must be scope for temporary deviations from the target, which may be justified with regard to avoid unnecessary fluctuations in growth and employment.
But systemic risk will depend on both the vulnerabilities that accumulate internally in the banking system and the sources of risk outside the banking system. The interest rate may only have a dampening effect on the build-up along some of these dimensions. In the March issue of the Monetary Policy Report, we wrote that the consideration of guarding against the risk of future financial imbalances that may disturb activity and inflation somewhat further ahead suggest that key policy rate should be increased in the near future. The consideration with regard to financial imbalances is thus part of the basis for setting the interest rate. At the same time, there are limits as to how many considerations the interest rate can bear. The interest rate also has effects on other assets prices, such as the krone exchange rate. A monetary policy that aims at bringing down the value of domestic assets can easily push the value of the krone in the opposite direction. In interest rate setting we can never lose sight of the primary objective of monetary policy, which is low and stable inflation. In assessing the different considerations, monetary policy must adhere to the operational mandate – low and stable inflation. Without results that show that the inflation target is actually attained over time, there is a risk that monetary policy will lose credibility. We therefore need more targeted instruments to dampen the build-up of risk in the financial system.

The financial system – including banks and other financial intermediaries, equity markets, and debt markets, solves these problems by agglomerating capital from many smaller savers, allocating capital to the  BIS Review 149/2010  1  most important uses, and monitoring to ensure that it is being used well. At the same time, the financial system transfers, pools, and reduces risk, increases liquidity, and conveys information. Ladies and Gentlemen, let me also highlight the importance of financial markets and how they inter-relate with firms and contribute to economic growth and enhance social welfare. Whether financial systems are relatively simple or highly complex, they perform the same broad functions and share the same key characteristics. Their primary role in any economy is to mobilize resources for productive investment. An efficient financial system channels resources to activities that will provide the highest rate of return for investors. These resources stimulate economic growth, provide enterprises with the ability to become more productive and generate new jobs. Clearly effective financial markets are indispensable to the pursuit of sustained, broad-based economic growth. Unfortunately, financial markets development is one of the most complex areas in the development field.
For this reason, we believe that it will be necessary to maintain the monetary stimulus for a prolonged period of time, in order to ensure that inflation approaches its 3% target and prevent it from stabilizing undesirably below that target. The latest decision of the Central Bank Board and its recent effects are proof that the monetary policy has effective instruments to continue applying the monetary stimulus even with the MPR at its minimum. Again, I am grateful to the Finance Commission of the Honorable Chamber of Representatives and its President, Representative Mr. Julio Dittborn, for letting me share with you our visions. The transparency with which we conduct our monetary policy is crucial in the uncertain global environment we are still enduring. Thank you very much. BIS Review 105/2009  3  Figure 1 Expectations for the MPR (1) (percent) 9  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0  Jul. 09  Jul. 10  Jul. MPR  Sep.' 08 Report  EES July' 09  Current forward (2)  11  Jul. EES Sep.' 08 Report  (1) Weekly averages used for the forward curve. (2) Forward curve at 21 July 2009. Source: Central Bank of Chile.

BIS Review 105/2009  5  Figure 5 Volatility and risk premium (basis points, percent)  Quarterly survey on banking credit (balance of responses, percent) Credit approval standards (*)  900  115  800  Demand for new credits (*)  75  75  75  75  100  50  50  50  50  700  85  25  25  25  25  600  70  0  0  0  0  500  55  -25  -25  -25  -25  400  40  -50  -50  -50  -50  300  25  -75  -75  -75  -75  200  10  -100  -100  -100  Jan.08  Jul.08  EMBI  Jan.09  VIX  Jul.09  Jun.05  Jun.06  Jun.07  Jun.08  SMEs  Jun.09  Consumer  -100  Jun.05  Jun.06  Jun.07  Jun.08  Jun.09  Housing mortgages  (*) Average responses per quarter. Negative figures denote tigher conditions than in the previous quarter. Fuentes: Central Bank of Chile, Bank Lending Survey; Bloomberg. 6  BIS Review 105/2009
I would like to convey my sympathy to our colleagues of the IFS, 10  who had the opportunity to work in close collaboration with him, and to the academic community in general for this loss. Finally, let me express my gratitude to the organisers for making this conference possible and to all of you for attending. I wish you a very productive meeting and a pleasant stay in Madrid. Thank you very much for your attention. 11

So for many reasons, I focus my attention primarily on how we are progressing and expect to progress relative to our dual mandate objectives. In this context, simple policy rules are an input, but my judgment also is informed by the economic environment and what we learn about the responsiveness of the economy to monetary policy. Nevertheless, it is possible to translate my assessments into a language that would be more familiar to those who think in terms of a Taylor-type rule. Recall that in a Taylor Rule framework, five major parameters can be adjusted:   The inflation objective and the estimated output gap.   Different weights can be placed on deviations of output relative to its potential and inflation relative to the Fed’s objective.   The estimate for the neutral real short-term rate of interest. Thus, while the Taylor Rule generally is viewed as a fixed formula, its underlying framework is sufficiently flexible that such a rule could be modified to reflect certain types of new information. What values should we use? In the United States, the inflation objective is well specified – a 2 percent annual rate for the personal consumption expenditures deflator.6 The FOMC has formally committed itself to this objective. In contrast, there is disagreement among FOMC participants about how far the U.S. economy is operating from potential. Our staff forecast at the New York Federal Reserve estimates that the long-term unemployment rate is about 5 percent.
The operating tools that the Federal Reserve has developed will allow us to tighten monetary policy when the FOMC determines it is appropriate to do so, but I have no doubt that we will continue to learn more about how these tools interact as we normalize policy and make adjustments over time, just as we have done in the past. We will also learn from and share our experiences with other central banks that are undergoing similar transitions. Thank you. BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches

(2001), “Independent Review of the Operation of Monetary Policy in New Zealand: Report to the Minister of Finance”. Sveriges Riksbank (2001), Inflation Report 2001:3. Sveriges Riksbank (2004), Inflation Report 2004:2. 12  BIS central bankers’ speeches
Jürgen Stark: Taking stock – where do we stand in the crisis? Speech by Mr Jürgen Stark, Member of the Executive Board of the European Central Bank, at the BMW (Bayerische Motoren Werke) Stiftung Herbert Quandt, Washington DC, 15 April 2010. *  *  *  Ladies and gentlemen, Introduction: macroeconomic developments and outlook In autumn 2008, the world economy entered the worst financial crisis and the deepest recession since the Great Depression. Both monetary and fiscal policies responded vigorously to this exceptional situation and contributed to the emergence of a recovery in the course of 2009. Hence, after falling last year, global activity is expected to grow by around 4% this year, while global trade is expected to grow by almost 6% (IMF January WEO update). Strong growth in emerging market economies in Asia is a major driving force behind these figures, while growth in many advanced economies is forecast to be weak. Questions can be raised as to whether such an uneven pattern of the recovery will prove sustainable. In the euro area, recent information indicates that the recovery has continued to expand in the first few months of this year. Looking forward, euro area growth is expected to remain moderate, owing to ongoing balance sheet adjustments in the private sector, weak prospects for the labour market and low capacity utilisation. Available growth forecasts for 2010 put it at, on average, around 1%.

In Europe, in particular, economic activity will be extremely weak on account of the financial and debt crisis. Switzerland will experience a significant economic slowdown over the rest of the year. Only because of the unexpectedly strong winter half-year does the SNB now expect growth of around 1.5% for 2012. The risks for the Swiss economic situation remain exceptionally high. The uncertainty about future developments in the euro area has again risen. If global activity proves disappointing or the turmoil on the financial markets increases, downside risks will again emerge for the economy and price stability in Switzerland. The imbalances in the Swiss residential mortgage and real estate markets increased further last quarter. Consequently, the SNB welcomes the Federal Council decision to make available a countercyclical capital buffer which can counter adverse developments on the domestic credit market. Global economic outlook Let us examine the economic outlook and the inflation prospects in a little more detail. In the first quarter of 2012, the global economy continued to grow at a moderate pace although this varied considerably from one region to another. The emerging economies were still making a major contribution to global growth. By contrast, overall momentum in the advanced economies was subdued, although here, too, differences from one country to another were considerable. Japan experienced strong growth in the first quarter due to a catch-up effect. In the US, momentum was moderate. In the euro area, a number of countries are in deep recession, while in Germany, GDP continued to expand strongly.
Also, because of the way we’ve done this regression – for the sake of simplicity it’s been estimated in one go, using the entire 20-year sample – we’re implicitly  5  As I said, there are potentially hundreds of detailed occupational descriptions from which LFS respondents can choose. The ONS’s standard scheme then makes high-level classifications – “high skill” occupations, for example, whose job creation rates are plotted in blue in Chart 7, are defined as “managers, directors, professional, associate professional and technical”; “low skill” refers to sales and “customer services, process and plant operatives, elementary”. 4  BIS central bankers’ speeches  assuming that changes in each of the characteristics have constant effects over time6. But there’s a substantial economic literature explicitly devoted to explaining changes in some of these coefficients, notably the labour-market returns to better qualifications (the “skill premium”). I’ll come back to this point later. Second, the estimated compositional effects have been driven mainly by changes in the mix of people, and their individual characteristics, not by shifts in employment across sectors. Pay clearly differs across industries, even controlling for those characteristics. And on occasion sectoral shifts can matter for average earnings. In Chart 7 the marginal contribution of changes in employment across industries is in red. Thanks mainly to disproportionately large job losses in the financial sector, where pay is higher than average, these were negative in 2003 and 2009.

Here in the Federal Reserve’s Second District, many households in both our urban and rural communities are vulnerable financially. And since the onset of the pandemic, access to quality, nutritious food has been greatly impeded. After many businesses were forced to shut down in the spring of 2020, food banks were quickly overwhelmed. In addition to an abrupt increase in need, there was also the challenge of distribution. I’m sure many of you remember the long lines to food pantries that stretched through neighborhoods. And many of our schools shifted from providing free lunches to students to offering grab-and-go meals to entire families. Now, we are facing another economic challenge: higher food prices. Transportation and labor costs—along with supply-chain disruptions—are driving up the price of many staples, such as beef, poultry, eggs, peanut butter, and produce. Food is not only becoming far more expensive for families, but also for food banks—which, at the same time, are reporting fewer donations. The result of all of this is that food insecurity is becoming more widespread—and more difficult to resolve. The ripple effects expand across the economy, as food insecurity drives economic inequality, which in turn is a barrier to cultivating a healthy workforce. And a healthy workforce is what we need to keep our economy strong. At the New York Fed—and across the Federal Reserve System—one of our key areas of focus is to better understand the economic drivers and social determinants of health.
BIS Review 81/2009  3  movements in various measures of economic slack have played a fairly modest role in the inflation process in the euro area in recent years. 6 The same Phillips curve analysis suggests that changes in inflation expectations play a major role in shaping inflation developments, anchoring inflation and potentially mitigating the harmful outcomes resulting from temporary shocks. In such a setting, expectations pin down the level of inflation in the long run, while changes in the output gap lead to short-run accelerations or decelerations of inflation around that level. There are many caveats to using a Phillips curve framework to relate inflation developments to economic slack – for instance, measures of both inflation expectations and the output gap are subject to considerable uncertainty, non-linearities may arise, and the relationship may change over time. Moreover, the actual impact of slowing real economic activity on inflation depends crucially on the nature of the economic downturn, the types of shock hitting the economy, their magnitude and duration. Wage and price rigidities may also contribute to help to moderate inflationary responses to changing economic conditions in the short run. Overall, the current weakness in real economic activity would be expected to dampen inflationary pressures in the euro area but not to lead to outright deflation. The approach underscores that while economic slack may contribute to movements of inflation in the short run, well-anchored inflation expectations are a crucial determinant in the inflation process. 2.

We will, in any event, reassess the value of each portfolio component before making the transfer to the special purpose vehicle. The lowest valuation will be applied. To secure initial financing for the operation, we will obtain US dollars through a Dollar-SwissFranc swap with the Federal Reserve. Thereafter, we will turn to the market for refinancing. The SNB will therefore not incur any currency risk. Since the entire operation will be effected in US dollars, it will not affect the National Bank's monetary policy in any way. Reasons for operation This operation is nevertheless unprecedented with regard to the reasons for it. In carrying it out, we are making a contribution to an essential element of the Swiss financial system, at a time when financial markets have been in turmoil for some months now. A better functioning of the financial markets – in particular the banking sector – is essential so that our country will be able to weather the economic difficulties resulting from the anticipated global economic slowdown in the months ahead. It is therefore preferable that we go ahead with this operation now, in an orderly fashion, despite the fact that the markets have regained a certain degree of optimism in the past few days – rather than at a later point under potentially more adverse conditions. The Federal Council and the Swiss Federal Banking Commission have been kept abreast of the preparations underway and our negotiations with UBS. BIS Review 125/2008  1
Over the next several months, the industry's focus needs to be on the remediation of legacy contracts well before the cessation of LIBOR, so we don't have a last-minute rush. Once we complete this final stretch of the transition, we can say good riddance to LIBOR. Even when the transition from LIBOR is complete, the ARRC's work will continue to shape the future. The ARRC has laid out best practices for the use of reference rates grounded in overnight SOFR.1 Importantly, this envisages only limited use of term SOFR, which doesn't share overnight SOFR's foundation in the deep and robust Treasury financing markets. It's incredibly important that financial institutions consistently act in ways that are aligned with these best practices so that we don't have to come back and clean up another mess. Unlike with Star Trek, the last thing anyone wants to watch is the sequel, "LIBOR: The Next Generation." The LIBOR transition is tangible proof of what can be accomplished when all stakeholders-public and private-work together and persevere, against all odds. That sense of purpose, collaboration, and accomplishment gives me hope for the main topic of the conference today: Treasury market resilience. And yes, there is much work to be done.

The baseline scenario reflects those events believed to be the most likely to occur with the information at hand at the closing of the Reports. There are risks, however, that, if materialized, could reshape the macroeconomic outlook and thus alter the course of monetary policy. About the external scenario, it is still early to know how the policy rate increase in the United States will affect the global economy. A first look shows that the markets have taken it calmly, stock prices rose and the dollar lost some value against the other currencies. Of course the way this process will unfold is an important source of risk, especially because of existing differences between what market expectations suggest and Fed’s statement about how fast and how far it will raise the rate. Plus there is divergence in the monetary policy among the developed countries and its potential effects on the global value of the dollar. To the extent that this continues, the pressures for a more appreciated dollar will persist, affecting commodity prices and our own currency. In China, an abrupt adjustment is now less likely, but doubts remain about how its economy will contribute to the recovery of global activity and commodity prices, especially now that they are rebalancing growth toward consumption and services. Finally, the complex situation in Brazil and the need for further tightening in some Latin American economies continue to pose a major risk. A worsening of the economic outlook in the region would affect external demand and possibly financing conditions facing Chile.