samchain/econo-pairs-v1 huggingface dataset:
An effective implementation of monetary policy presupposes that there is a high level of private-sector confidence in the central bank with regard to both the inflation target and the monetary policy analysis. It also requires that the central bank is successful in communicating its analysis and intentions. In other words, a precondition for an effective monetary policy implementation is that the central bank is open and transparent. Most central banks use a short-term interest rate as the policy rate to implement monetary policy. However, the actual policy rate in the two months prior to the next monetary policy  BIS Review 29/2009  11  decision plays a very minor role in the economy. Expectations regarding future policy rates, on the other hand, do play an important role. They affect interest rates with longer maturities which in turn are the interest rates that have an impact on the economic decisions of households and companies. The Riksbank and a few other central banks have taken this seriously and publish their own policy rate paths to facilitate the formation of expectations regarding future policy rates and to influence these expectations more effectively. If the central bank is successful in its communication, the market participants should be able to predict rather well how new information or new shocks will affect the central bank's forecast for the policy rate. If the central bank's analysis is credible, the market's expectations regarding the future policy rate should also change in line with the revised interest rate path of the central bank.

We can formalise and specify this reasoning somewhat by saying that it is a case of selecting a policy rate path that minimises a forecast loss function, written as the following common quadratic form:  BIS Review 29/2009  3  2  Evaluation ex ante – given the information available at the time of the decision So, given that a central bank conducts flexible inflation targeting, how should we evaluate the monetary policy the bank conducts? When evaluating monetary policy, as when evaluating decisions in general, we may adopt one of two different starting points. The first option is to base our evaluation on the information that is currently at hand; that is also including the information that has become available since the decision was made. This is, in other words, an evaluation after the fact. We can call this an ex post evaluation. The second option is to put ourselves in the position of the decision makers at the time the decision was made and to try to evaluate the decision given the information that was then available. We can call this an ex ante evaluation. When evaluating monetary policy, the most interesting question is not whether the decision could have been better after the fact. As I said earlier, monetary policy is conducted under conditions of great uncertainty – there is a time lag before monetary policy has an impact on inflation and the real economy and the economy is constantly subject to new shocks.
We must use the gravity of the global crisis to provoke a bold response. We acted together in 2009; we can do so again. 4  BIS central bankers’ speeches

The two recent crises have brought to fore the issue of food insecurity that had been brewing under the surface. Chronic hunger, child and mother malnutrition, and pervasive poverty, always features of poorest members, have been exacerbated by the surge in global food prices that has pushed many more millions into poverty, even in some middle-income countries. The international community has to rise to the challenge. In this connection, we welcome the IMF’s new food shock window as a part of its emergency support facilities that should be accessible to all eligible members in an evenhanded manner and with the same sense of urgency. The sad plight of the Afghan people should not be forgotten. Afghanistan is facing the highest incident of insufficient food consumption in the world, with 90 percent of households, and an even higher percent of households headed by women, are facing insufficient food consumption. Close to 4 million Afghan children are acutely malnourished. It is difficult to imagine how long and how far this situation could continue. Going forward, we all bear responsibility of putting the world economy back on a sustainable and steady track. The expectation is for the AEs to maintain the delicate balance in the inflation-growth trade off, recognizing the significant negative spillovers of policy mistakes, in either direction, as they try to lower inflation and keep inflation expectations anchored. While we will all benefit from lower inflation, we cannot afford an overtightening of monetary conditions when the world is at the cusp of a serious recession.
Once we have received and considered them, we will begin work on more detailed proposals which will be published for consultation in due course. Whilst I hesitate to claim that the finished strong and simple framework will resemble a great cathedral in its beauty – and I can certainly promise you it will not take centuries to complete – it is nevertheless a major building project which will create an important new part of the regulatory landscape. Help us now to lay its foundations and to shape our vision of what it will grow into. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10

It is gratifying to note that applications were invited from all eligible students in various higher institutions of learning around the country. I have also been informed that although only four teams have been shortlisted, the response from the young entrepreneurs was overwhelming with about 75 total applications received. I am certain that the winning team will be worthy winners of the K100 Million Business Loan Sponsorship prize. Further, I have been reliably informed that the competition will become an annual event and prize money will be increased in future years, which indeed is commendable. I am certain that the award will provide a great incentive to our young men and women to be innovative and develop business ideas. The initiative will also improve the level of entrepreneurship in the country which is lacking at the moment. Mr Chairman I once again applaud you and your co-sponsors for this long term commitment to this award programme. Distinguished Ladies and Gentlemen, allow me at this moment to highlight the importance of entrepreneurship in our economy. Entrepreneurship involves developing innovative ideas, taking risk and managing the business in a sound manner. In these turbulent times and with an increasingly competitive global market, it is vital for a country like ours to have a good entrepreneurial base which should contribute to wealth creation and to the country’s economic development. The need for more Zambians to own successful businesses and compliment foreign investments in our country cannot be over-emphasised.
Zdeněk Tůma: Education in the Czech Republic - the case of the missing generation Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, on the occasion of graduation from the EMBA programme at CMC Graduation School of Business, Prague, 4 December 2004. *  *  *  In recent years I have heard many strong statements about knowledge based economy. Today’s graduation is obviously an excellent opportunity for yet another speech on this issue but I fear it would be too general and therefore “empty”. Instead, I would like to contribute with my personal experience and observations. We have almost forgotten that 15 years ago there were not any Czechs nor Slovaks educated in modern economics or business. Economic programs were focused on central planning and marxist theory of socialism before 1990. Nobody - with one exception - was allowed to study abroad since the 1960s. When my friend Martin Kupka returned from Geneva in 1989 from his studies, he brought the textbook on macroeconomics by Dornbusch and Fischer. He told me: “We should translate it into Czech”. At the same time, another group was working on the translation of “Economics” by Paul Samuelson. Later on, we translated the textbook on corporate finance by Brealey and Myers. In other words, we started from scratch. It had two - though interrelated - aspects. First, we had only limited knowledge about what economics and business programs should look like.

• In recent years, in order to meet their price stability targets, many central banks have pursued a very expansionary policy, including low or even negative policy rates, as well as purchase programmes of securities. These policies have attracted criticism, saying they increase inequality, but I disagree. • Given the weak trend in growth in many countries, a less expansionary monetary policy than pursued during recent years would have led to higher unemployment than was the case. In that sense, monetary policy could be argued to have contributed to lower income inequalities, as unemployment could lead to large negative effects on household income. Many of those households, who would have experienced unemployment, would then have fallen to lower income deciles, contributing to higher income dispersion. Most studies that include the labour market effect come to the conclusion that the overall effect of expansionary monetary 1  See Deutsche Bundesbank (2016). 2 See Deutsche Bundesbank (2016). 2 [5]  policy on inequality is that it slightly decreases it. Or in short, the dampening effect of lower unemployment offsets the effects from higher share prices. But the overall effect seems, if any, to be small. • To sum up, the very expansionary monetary policy conducted during recent years in some countries could be argued to have had a positive net effect, albeit small, on equality. The positive employment effect normally seems to dominate over the negative effects 3. • We at the Riksbank don’t per se take equality into consideration when taking monetary policy decisions.
This is because the main reasons underlying the outbreak of the current financial crisis are deficiencies and mistakes in the establishment of economic policies along with the fulfillment of regulatory and supervisory activities. Nevertheless, we all know that the reconstruction of economic balances under normal conditions relies on the proper execution of these functions. Another factor leading to uncertainty is the enforcement of global financial and monetary measures of a size, speed and coordination that has never been witnessed before. This raises ambiguity pertaining to the responses to these measures from financial markets and economies in the upcoming period. In the current conjuncture there is a consensus that the recovery in global economic activity will not be anytime soon and what worries the global community is what will follow the crisis. The question about mechanisms to avert any future global financial crisis similar to the current one will completely occupy the agenda of academics and policy-makers in the near future. Moreover, the extent and pace of the reversion for financial measures and nontraditional monetary policy exercises against the financial crisis on the back of stabilization in economies will top agenda very soon. The global financial crisis has led to a significant slowdown in economic activity in Turkey as in other developing countries. A remarkable tightening in lending conditions and a surge in interest on loans were experienced during the worst period of the financial crisis.

However, I would like to underline once more that economic recovery is expected to be gradual and slow as opposed to the rapid recovery in economic activity after the 1994 and 2001 crises experienced in Turkey and that a significant vacceleration in aggregate demand is not expected anytime soon. Persistent tightness in external financing conditions, the lagged and gradual recovery in our primary export markets and the large share of durables and capital goods exports, which are sensitive to foreign demand, indicate that recovery in the Turkish economy will be different from what we have experienced so far. Distinguished Members of the World Economic Society, Esteemed Guests, It is a widely accepted fact that in modern economics, decision-makers act rationally and their decisions form a dynamic system in the field of economy. While measuring the efficiency of policies, their response to such policies over time is examined within a dynamic framework. As we can see in the conference program, almost every single topic in the economic literature is addressed from a dynamic perspective. We are on the brink of starting a two-day conference during which we will be listening to pioneer studies covering a wide range of topics from game theory to the labor market, from education economics to the functioning of the real estate market. There is no doubt that this is an invaluable experience for economists to catch up with the global economic agenda and to follow recent developments.
Evidently, the attractiveness for investors of issues of green bonds is a sign of the growing concern over the effects of climate change. Yet for the aforementioned transmission mechanisms to work properly, the volume of securities traded on these markets must reach a critical mass and be consistently catalogued. To achieve this, the initiatives developed within the European Commission are essential: these include most notably the taxonomy for determining the activities that contribute to sustainability in environmental terms, and the “ecological” labelling of financial products. We need a common language that can be used both by debt issuers and potential investors, so that these markets may be developed. On this point of financial investments categorised as “green”, it is worth recalling that we as central banks are also active investors in financial markets, both in monetary policy operations and in portfolio management relating to reserves. In this connection, as acknowledged in the report by the network of central banks and supervisors, and as recently indicated by Mario Draghi, we are aware that environmental risks are not yet being built into most of this portfolio’s ratings, whether internal or devised by rating agencies. Accordingly, in the Eurosystem, a thorough review of these risk valuation processes is under way. The aim is to ensure us that all the relevant factors, including environmental ones, for the prudent management of the portfolio held by the central banks are being taken into account.

And we will in this way manage to make the financial sector contribute actively and efficiently to the sustainable transformation of our economy. I trust the following discussions will prove interesting for you. We will talk about the important work by European institutions under way, about how financial institutions are adapting and about the way in which the adverse effects the energy transition may exert should be accommodated, in what has come to be known as the “fair transition” debate. Thank you. 5/5
Furthermore, a fragmentation of the global economy would probably lead to more frequent bottleneck situations, since changes in demand would once again increasingly affect domestic economies and it would be less possible for these changes to be absorbed by the global economy. As a result, inflation and the economy would also become more volatile again. All of this means that monetary policy would have to be focused on tackling inflation more frequently and intensively than in recent years. Moreover, the use of monetary policy instruments could also be affected. Would the traditional instrument of interest rates be used again more often, or would unconventional measures continue to play an important role in countering the impact of adverse disruptions? This primarily depends on whether the neutral interest rate remains low or returns to a higher level. Both of these developments are conceivable. The neutral level of interest rates could rise and the traditional interest rate policy could return to the fore if there were to be a reduction in the investment of savings from the emerging economies in the advanced economies. The neutral level of interest rates would also rise if defence spending and investment in energy infrastructure were to increase government debt or if inflation were to remain high. On the other hand, however, the neutral level of interest rates could also persist at the low level of the past 15 years if there were to be an increase in saving due to the geopolitical uncertainty or if inflation were to decline again.

Thus, euro area GDP is projected to grow at 0.5% in 2023 (3.4% in 2022), rising to rates close to 2% in 2024 and 2025. In tandem, the inflation projections have been successively revised upwards. After average inflation of 8.4% in 2022, the December 2022 Eurosystem projections forecast a much higher rate for 2023 (6.3%) than expected in September (5.5%) and June (3.5%). Inflation is then expected to fall gradually to an average of 3.4% in 2024 (compared with the September forecast of 2.3%) and of 2.3% in 2025. The upward revision to inflation for 2023 and 2024 is the result of recent inflation data reflecting, as I mentioned earlier, a stronger and more persistent inflationary episode than expected, the fiscal measures adopted to soften the impact of inflation on households and firms (which reduce inflation in the short term but increase it when they are rolled back) and the expectations, in line with the latest information, for stronger wage growth. The aforementioned macroeconomic context has also triggered a deterioration in financial stability. The combination of higher inflation and lower-than-expected economic growth, together with rising interest rates, is adversely affecting households' and firms' ability to pay, especially among the most vulnerable segments, which are characterised by low income levels, dependence on energy and food products and, in some cases, high indebtedness.
In addition to these objections to the simple Taylor rule it can be noted that there is a lot of evidence to the effect that instead of being stable, the equilibrium interest rate in the equation varies with the potential growth rate. This is a view that can be traced back to the Swedish political economist Kurt Wicksell’s notion of a “natural interest rate”. A monetary policy based on forecasts I should now like to present some reflections on the forecast-based monetary policy we undertake at the Riksbank. First of all, an inflation targeting policy based on forecasts has several basic characteristics in common with the other alternatives I have been discussing. (This, however, does not apply to the alternative of basing policy solely on CPI outcomes.) One common denominator is the fundamental philosophy and aim of safeguarding the value of money. Monetary policy strives for price stability as a way of providing a nominal anchor for the economy. Another similarity is the medium-term perspective rather than short-term activism. This in turn calls for a forward-looking perspective when the instrumental rate is set. A further resemblance is that in the Riksbank’s strategy, monetary policy reacts systematically, though neither automatically nor mechanically; this helps households and firms to base their expectations of inflation on a monetary policy that is predictable. We have followed our rule of action relatively closely, as is evident from Diagram 1. 4  BIS Review 24/2002  1.

The Bank of Canada already regularly does this, and the Federal Reserve is currently undergoing a review of its framework and strategy.8 Absent such changes, central banks will be severely challenged to achieve stable economies and well-anchored inflation expectations. Outside of monetary policy, there are a number of avenues by which fiscal authorities can enhance the resilience of economies to negative shocks. One is to strengthen the “automatic stabilizers” that provide a boost to the economy during a downturn. A second is to align debt management decisions more with monetary policy. For example, during a downturn, the fiscal authority could choose to shorten the duration of debt issuance to reinforce the effects of central bank quantitative easing. Third, regulatory and supervisory policies that support the resilience of the financial system can limit the economic effects of negative shocks. Finally, fiscal and other economic policies can attack directly the sources of slow growth and low r-star. This includes raising public and private investment in human and physical capital, infrastructure, science and technology, and policies aimed at removing barriers to participation in the labor force and the economy more broadly. Conclusion The facts have changed, and so it is time our change our minds also. It is often said that change is hard. But, experience teaches us that it is better to prepare for the future than wait too long. Ultimately, failure to prepare often means preparation for failure. 1 This is not true for all population groups.
Muhammad bin Ibrahim: Innovative financial inclusion Opening remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Symposium on Innovative Financial Inclusion, Kuala Lumpur, 21 September 2016. *  *  *  While the global economy is still recovering from the Global Financial Crisis, the focus on boosting global growth has never eclipsed the financial inclusion agenda. In fact, policymakers continue to recognise the importance of financial inclusion and have accorded it as a global priority to address the widening income inequality gap, to promote the economic empowerment and protection of low income households and SMEs and to unlock the growth potential of the fast-expanding middle class population. Expanded opportunities to save securely, to invest in productive activities and to protect against unforeseen shocks, would meet the needs of the underserved. This would drive domestic demand, a key engine of growth for many economies. Between 2011 and 2014, the World Bank estimates that 500 million people have gained access to formal financial services for the first time. If our efforts continue, we are on our way to assisting the remaining 2 billion adults that remain financially excluded. A succession of technology breakthroughs combined with the ubiquity of mobile devices present significant opportunities to scale up financial inclusion to an unprecedented level.

There was no time or basis for the banks to provide collateral for borrowing from the central bank, and when the banking crisis became full-blown a few years later the central bank was highly exposed. This gave the banks a strong negotiating position in the first crisis resolution rounds. This time, funding support for banks came from the government’s balance sheet, not as loans from Norges Bank. This provided transparency. Norges Bank could to large extent concentrate on restoring the functioning of the money market. Moreover, the government was provided with sound collateral, while the banks were provided with government securities that they could use as collateral for borrowing or sell in the market. The Norwegian measures were designed in such a way that Norges Bank’s balance sheet has not increased to the same extent as that of a number of other central banks. The measures led to a gradual improvement in Norwegian banks’ funding. So far, drawings on the covered bond swap line have amounted to NOK 225 billion. The swap line soothed the panic among banks and led to a moderation in the tightening of bank lending standards. Since spring, risk premiums on fixed-income securities have declined and activity in money and bond markets has picked up. In recent months, many financial institutions have again procured funding in traditional commercial paper and bond markets.