samchain/econo-pairs-v1 huggingface dataset:
He attributes this not to the effect on the fiscal position but to the direct pressure of the extra spending on economic resources: in order to keep aggregate demand in line with supply real interest rates, including those at longer maturities, needed to go up to “crowd out” private spending. In general, however, swings in demand will tend to have less impact on forward rates – and therefore on longer-term bond yields – than on current, spot interest rates. 8  For more on the countercyclical impact of monetary policy, see for example Christiano et al (1999), Boivin et al (2010) and Ramey (2016). 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  In addition, capital markets are now very open and the UK a far smaller part of the world economy  Chart 7: Global factors much more important determinant of changes in gilt yields than domestic events  than it once was. So at least as far as real bond yields are concerned, it’s the future of the global economy that matters more than that of the UK specifically. Changes in real bond yields are tightly correlated across developed economies (Chart 7); news about the world economy has a greater impact on gilt yields than news about the UK specifically9. The fact that international capital markets are now very open – and that the UK is now only a small part of the world economy – also has a bearing on  12-month changes in 10-year yields.

15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  On the other hand, the documents of the time make it clear that the government’s opposition to the sorts of rises in interest rates that would’ve controlled inflation stemmed from more than a parochial concern with its own finances16. Nor did some in government believe such rises to be necessary to begin with (inflation was often blamed on an unlucky sequence of cost shocks17). What’s certainly clear, looking at the longer run of history, is that there’s no simple measure of the fiscal position – the ratio of government debt to annual GDP, for example – beyond which inflation is bound to pick up. In 1970 public-sector debt was 60% of GDP, the lowest it had been since the eve of the First World War. Yet what followed was the most rapid inflation, over any 10-year period, in British history. Going much further back in time, government debt was higher than this in every year of the half-century before the French revolution in 1789 – higher still relative to the general level of taxation – yet the gold standard remained intact and inflation quiescent. Throughout, people were free to convert Bank of England notes into gold at a fixed price. In the 1790s, when war against the new French republic began, two things changed. One was the  Chart 11: The Bank of England’s balance sheet during the Napoleonic wars  scale of the resulting rise in government spending.
Tarisa Watanagase: Financial globalization and market turbulence Opening remarks by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the Bank of Thailand’s International Symposium on “Financial Globalization and Emerging Market Economies”, Bangkok, 7 November 2008. *  *  *  Professors, Distinguished Participants, Fellow Central Bankers, Ladies and Gentlemen, It is a great pleasure for me to welcome you to the BOT International Symposium 2008 on “Financial Globalization and Emerging Market Economies”. This symposium is the third in a series of International Symposia organized by the Bank of Thailand. From its first meeting eight years ago, this symposium series has been a gathering of prominent academics, policy-makers and market participants to discuss current issues on both monetary and macroeconomic policies from an international perspective of either emerging, regional, or global economies. Over the past several years, a common theme for us as the organizer has been the focus on inflation targeting and its implications on monetary and financial sector policies where appropriate. Through this series of symposia, a body of knowledge has been timely accumulated to be put to great tests from the increasing trend in financial globalization and the accompanying turbulence in recent years. When the topic for this year’s symposium was chosen prior to this current market turmoil, it was not apparent at the time that the turbulence would indeed turn out to be one of the most challenging events since the Great Depression.

EU-Singapore FTA (EUSFTA) Finally, as we seek to maintain an open economy and to stay relevant, Singapore will work on deepening our engagement beyond the Asia Pacific, for example, with the EU. BIS central bankers’ speeches  3  Negotiations on the EU-Singapore FTA were recently concluded. This is the first FTA which the EU has concluded with an ASEAN country. The EU-Singapore FTA can serve as a pathfinder FTA for EU’s on-going bilateral FTA negotiations with other ASEAN countries, such as Malaysia and Vietnam, and it signals the EU’s interest to engage with the region. When implemented, the EU-Singapore FTA will enhance Singapore’s attractiveness as a gateway for EU companies seeking to tap the opportunities in our region. Conclusion So ladies and gentlemen, to summarise, Singapore is pursuing a strategy of broader and deeper economic integration with major economies through multilateral agreements, such as the RCEP, TPP and EU-Singapore FTA. In addition, we are enhancing our role as a trusted and modern financial hub by expanding into new services, such as offshore Renminbi trading. These initiatives will help investors and companies based in Singapore to “open doors” and “unlock value”. Let me once again express my appreciation to Deutsche Bank for holding the annual Deutsche Bank Access Asia Conference in Singapore and bringing together thought leaders, investors and policy makers together to find ways to tap the opportunities that are being created by Asia’s economic growth. I wish you all a very fruitful conference. Thank you. 4  BIS central bankers’ speeches
For example, FOMC minutes have a reading grade score of around 17, compared to around 14-15 for MPC minutes. Nonetheless, in common with the Bank, there is a material reading grade gap between central bank and external publications, of around 5 years with mainstream newspapers, 8 years for political speeches generally and 13 years for election campaign speeches by President Trump. They are 11 years ahead of the average Elvis song. If we look at a selection of other central banks’ English language publications, we see the same pattern. Reading scores are around 14, well above the levels of external publications (Chart 16). Taken at face value these scores are interesting, if perhaps not altogether surprising. After all, central banks occupy a technocratic space with its own technical language. Nonetheless, it is worth reflecting on the costs at which this complexity comes. For example, what fraction of the general public are central bank publications excluding because of their language? Given data on the distribution of literacy rates across the population, linguistic complexity metrics allow an estimate of that fraction. Using data from the US national adult literacy survey, we can estimate the penetration rate of various publications, central bank and external (Chart 17). 61  This suggests that a campaign speech by President  Trump is accessible to around 70% of the US adult population, an Elvis song around 60%, political speeches a little less than half and the mainstream US press when discussing monetary policy around 20%.

At its start, there were fewer than 20 recognisably “central banks” operating globally (Chart 1). Their responsibilities were typically heavily circumscribed by custom and practice, by law or by the state. In the Bank of England’s case, it was all three. In these early days, the role of central banks was often to act as an operational arm of government: buying and selling foreign exchange to preserve a currency peg; distributing central bank liquidity to financial institutions, in normal and crisis times; serving as banker to the government and to commercial banks; and issuing banknotes to the public to serve as the ultimate medium of exchange. 8  th  As the 20 century unfolded, central bank numbers swelled. By its mid-point, they had risen more than twofold, to around 60. By its end, they had risen a further threefold to not far off 200. Today, there are roughly as many central banks as there are countries in the world. Some of this ascent was simply the arithmetic consequence of a rising number of independent nation states. But that is not the whole story. The fraction of nation states with a central bank rose from around  7  My friend and former colleague Minouche Shafik recently made many of these points in her final speech as Deputy Governor (Shafik, 2017). 8 Capie et al (1994). 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  th  one-quarter at the start of the 20 century to close to one by its end.
As Jean Monnet said, “we need a Europe for that which is essential … a Europe for what nations cannot do alone.”[1]  Sovereignty in an interconnected world On the whole, European citizens appear to welcome the benefits brought about by economic integration through the EU. [2] The free movement of people, goods and services – that is, the Single Market – is routinely seen by citizens as the EU’s most positive achievement. In the euro area, 75% of people are in favour of the euro and Monetary Union, and 71% of Europeans support the EU’s common trade policy. Yet at the same time, public attitudes towards the EU’s political structures seem to be hardening. Average trust in the EU stands at 42%, down from 57% in 2007. This decline has taken place against the backdrop of a general loss of faith in public institutions. Trust in national governments and parliaments has dropped to just 35%. This tension between economic integration and political cooperation is fuelled by a powerful belief that there is an inherent trade-off between EU membership and the ability of countries to exercise sovereignty. In this way of thinking, if citizens want to be able to exert more control over their destinies, they have to loosen the EU’s political structures. But this belief is wrong. It is wrong because it conflates independence with sovereignty.

Most countries would no longer benefit from local currency invoicing, which would exacerbate the effects on inflation if they undertook large exchange rate devaluations. And they would be more exposed to monetary policy spillovers from abroad – not least from the ECB itself – which could constrain their domestic policy autonomy. In recent years, Denmark, Sweden, Switzerland and central and eastern European economies have been affected by spillovers from our policy measures. [13] In fact, spillovers from larger economies were one reason why the euro was created in the first place. Under the European Monetary System that preceded the euro, most central banks had to follow the policy of the Bundesbank. After more than a decade of disappointing, if not devastating, experiences, it was deemed preferable to regain monetary policy sovereignty by launching the single currency together. [14]  Cooperation and economic policy The second way in which globalisation constrains sovereignty is by limiting countries’ capacity to set laws and standards that reflect their social goals. Global trade integration tends to reduce that capacity, because as production fragments through value chains, there is a greater need for countries to agree on common standards. Those standards are mostly set not within the World Trade Organization, but by large economies with dominant positions in the value chain. Smaller economies tend to end up as rule-takers in the international system. [15] Global financial integration can likewise reduce individual countries’ power to regulate, tax and uphold labour standards.
Since then the appreciation of the Swiss franc against the euro has ceased and its volatility with respect to the European currency has diminished considerably. Let us now proceed to an examination of monetary conditions in terms of volume – in other words, in terms of credit and monetary aggregates. Overall, credit is still growing at an annual rate of more than 3%. However, this general figure is composed of a number of  2  BIS Review 77/2009  different movements in opposite directions. Mortgage lending has been increasing more and more rapidly since November. The growth rate rose from 3.6% in December to 4.2% in April, an advance related to the fall in the Libor. Other credits for all currencies, by contrast, began falling in April (–0.8%), as might be expected in this phase of the economic cycle. Other credits granted in Swiss francs, however, continued growing at a rate of 1.2%, despite the fact that they were already at a relatively high level. Loans granted to private companies grew at a rate of 10.2% in the first quarter of 2009 as compared to the first quarter of 2008. Thus, we do not perceive the slightest indication of any credit crunch in Switzerland. Clearly, with the decline in the quality of certain borrowers during a recession, it is inevitable that a cyclical tightening of loan conditions will occur, but this cannot be termed a credit crunch.

Many other changes have also been implemented, such as the central clearing of standardized over-thecounter (OTC) derivatives contracts, which should help make the global financial system more resilient and robust. While these efforts remain a work in progress, I think they will reduce the risk of repeating the mistakes of the past decade, and enable us to take a more proactive stance toward addressing potential future vulnerabilities. Of course, we at the Fed are not alone here. Since the financial crisis, central banks worldwide have been engaged in a broad rethinking of how better to fulfill their mandates. Let me close with a final thought. Adam Smith in the Wealth of Nations introduced the concept of the “invisible hand.” Smith argued that individuals acting in their self-interest can collectively promote the public interest. This concept, I believe, also often applies to international monetary policy.2 The biggest problems that countries create for others often stem from getting policy wrong domestically. Recession or instability at home is often quickly exported abroad. Equally important, growth and stability abroad makes it easier to set policy at home. Central banks, therefore, by individually acting on their domestic economy mandates, can collectively promote the global economy. Thank you for your kind attention. 2  6  There are important exceptions of course. Two noteworthy exceptions include “beggar-thy-neighbor” policies in which countries engage in unilateral competitive currency devaluation and trade protectionism. BIS central bankers’ speeches
Thus, according to the IMF, we deal with a global investment drought 10 , considering the fact that during the five years following the Asian crisis of 1997-1998, the  8  A series of articles on the topic was commenced with the work of M.Dooley, D.Folkerts-Landau and P.Garber „An Essay on the Revived Bretton Woods System“, NBER Working Paper 9971, September 2003. 9  A hypothesis of a global savings glut was formed for the first time by Ben Bernanke in March 2005 in his speech at a meeting of Virginia economists’ association. 10  For example in speeches by the IMF Managing Director Rodrigo Rato and the IMF Research Department Director Raghuram Rajan in January and February of 2006. BIS Review 19/2006  3  level of investments was about 7 percentage points lower than during five years before the crisis. Therefore, an appropriate recommendation for these countries is not limiting their savings rate but enhancing their investment climate. According to other hypotheses, the major factor behind the global imbalances is the low level of savings in the US household and public sectors 11 , i.e. the fact that Americans spend more than they earn and that the budget deficit, from a substantial surplus in the year 2000, turned into a level estimated at 4.7% of the GDP in 2004.

The papers to be presented by Luca Dedola from the European Central Bank and Óscar Jordá from the University of California-Davis are part of a very active literature that studies the determination of nominal exchange rates incorporating insights from recent developments in the theory of financial markets. On line with developments on financial markets theory, the paper to be presented by Craig Burnside shed lights on a central discussion on the exchange rate dynamics theory. Along with his coauthors they offer an explanation for the forward premium puzzle in foreign exchange markets, their analysis is also consistent with opportunities of profitable carry trade strategies. Given the importance of the nominal exchange rate for an open economy like Chile, these papers are also a very important and relevant contribution. As you can see this promise to be a very interesting conference and I invite you to engage in the discussion and seize the opportunity to learn from this very excellent group of researchers. BIS Review 104/2010  1  Finally I would like to thank Miguel Fuentes, Diego Saravia and Felipe Labbé for organizing what promises to be a very interesting workshop. Thank you. 2  BIS Review 104/2010
Financial stability is a precondition for monetary policy being able to work as intended, while monetary policy can affect financial stability. It is therefore rather natural to take the risk of financial imbalances into account in monetary policy. However, there must be a reasonable connection between alternative regulations and monetary policy. Regulations can be described as an indirectly-targeted means of raising or lowering interest rates in a certain social sector. If the regulations deviate significantly from the monetary policy that is being conducted, distortions and contradictory messages will arise after a while in the financial sector. New control problems will emerge, for example through the appearance of shadow banks or through excessive borrowing abroad. As is so often the case, it is a question of finding the right balance. A low repo rate is justified, but how low? The economic situation over the last 12 months, that is the weak development of economic activity abroad and the low inflationary pressures, has made it necessary to gradually lower the repo rate in order to enable inflation to rise towards the target of 2 per cent and to normalise resource utilisation (see Figure 1). This means that we have a very low repo rate today, which is also reflected in lower interest rates for households and companies (see Figure 10). Determining how low the repo rate should be entails balancing many different factors against each other.

These generally did not foresee the periods of strong house price increase in the first half of the 2000s. This suggests that there could have been some offsetting error, and in terms of the underlying assumptions used by the MPC one candidate is a frequent overprediction of  6  Bank of England (2000). 7  Harrison et al (2005). 8  Hills et al (2005) sets this issue out fully. BIS Review 27/2010  3  growth in earnings. It would not be right to suggest that this had automatically led to a systematic overestimate of inflationary pressure, since, as explained above, the published projections are also based on overall MPC judgements. But it is notable that despite frequently-expressed concerns by the MPC about periods of higher inflation leading to higher wage inflation, the relationship between earnings growth and RPI has become weaker over time. Chart 2 does not suggest a consistent relationship. Indeed, since 1995 the correlation between RPI (lagged by one quarter) and average earnings has been just 0.3, compared with 0.8 over the 1977–95 period. These comments on the past, however, clearly do not exhaust the range of potential uncertainties about the size and interpretation of the output gap. These include mismeasurement in the data, incorrect calibration of the relationship between demand and supply, and changes in the implications for inflation of any particular estimate of excess capacity. How might these difficulties affect the outlook at the present time?
First, they demonstrate the Fed’s strong commitment to prevent lasting damage to the economy. Second, the scale and reach of the response is an indication of the gravity and unique nature of the situation we are facing. Although the facilities differ in important ways, reflecting the specifics of markets and sectors, they all share the goal of keeping credit flowing to households, businesses small and large, and other key segments of the economy. Since the announcements and rollouts of the various facilities, we have seen a significant improvement in the pricing and availability of credit.6 2/4  BIS central bankers' speeches  Somewhat paradoxically, despite the clear effect that these facilities have had on the availability of credit, actual take-up of the facilities has been relatively low. But this is in fact a measure of success—the existence of the facilities, even in a backstop role, has helped boost confidence to the point where borrowers are able to access credit from the private market at affordable rates. It’s worth noting that the Federal Reserve does not act alone. As my colleague Chair Powell says, “The Fed has lending powers, not spending powers. "7 Sound healthcare policy and the ability of fiscal authorities to put cash directly in the hands of Americans are both essential for the economy to endure this devastating episode.

Markets for Treasury securities and agency mortgage-backed securities, which are normally highly liquid and form the bedrock of our financial system, nearly buckled under the strain of massive flows of funds in response to the pandemic.3 It’s easy to think of financial markets as somewhat divorced from the real economy—most people will never need to worry about a spike in the repo rate or liquidity in the Treasury market. But the reality is that like the events of 1907—and more recently 2008—turmoil in financial markets can have a devastating impact on the wider economy. If credit isn’t flowing, people can’t finance the purchase of a home, businesses can’t invest, and nonprofit organizations and municipalities can’t keep essential services going. This is why safeguarding the functioning of financial markets is essential for the health of the broader economy. In response to the extraordinary volatility caused by the pandemic, the Fed greatly expanded its repo operations and began purchasing sizable quantities of U.S. Treasury securities and agency mortgage-backed securities. These actions to provide massive liquidity have proven successful. They restored market functioning and averted what could have been a much more severe pullback from markets and the flow of credit to households and businesses.4  Deploying Our Tools In addition to the repo operations and asset purchases, we have established a number of programs to support the flow of credit to households, businesses, and state and local governments.5 I won’t go into detail about all of the facilities, but I will emphasize two important points.