samchain/econo-pairs-v1 huggingface dataset:
On the positive side, net financial wealth of households has increased by 15 per cent since 2003 – it was estimated at € billion in June. On average, households have considerably more assets than liabilities, which suggests that household debt is within sustainable levels. So do you disagree with claims that we've started living beyond our means? As long as people can manage their finances, if they do not keep accumulating debt and repay their debts to banks, there does not seem to be a problem at the level of households. BIS Review 152/2008  3  At a national level, the picture is different – we still have a tendency to spend more than we earn as evidenced by the current account of the balance of payments and the fiscal position, which both show a deficit year after year. The prospects for changing this behaviour, at least at this point in time, do not seem very encouraging. These days we are seeing a growing chorus of people calling on the government to run an even larger deficit and to increase the public debt further. During a seminar last June, you said that automatic compensation for inflation, especially at the national level, was counterproductive. The government has calculated its COLA at over € a week. What do you make of it? When you have countries with wage indexation schemes that link wages to past inflation, there is always a danger of the two feeding on themselves and the creation of a wage-price spiral.

Lastly, I must add ignorance as another essential cause of improper financial behavior. Even with a well-designed financial education program with meaningful messages and effective delivery channels, financial literacy cannot be achieved if consumers neglect the necessity and benefits of appropriate personal financial management. All in all, desirable financial behavior is sometimes well known, but less likely to be implemented by consumers themselves. It is similar to living a healthy lifestyle. We know that healthy food and exercise are good for us, but we don’t do it. Hence, a solution to the improvement in financial behavior remains a challenging puzzle for many of the policy makers and practitioners to find the right solutions for various groups of people. Ladies and Gentlemen, I truly believe that this seminar would allow an invaluable opportunity for us to learn how to solve these puzzles from honorable speakers who have come a long way to share with us their enriching experiences and lessons-learnt. The achievement of effective financial education and behavioral change would eventually drive the global community towards a more financial- literate and disciplined population who would help ensure sustainable growth and equality in our society. Lastly, I wish the seminar a great success. I also wish to express my sincere appreciation for all of your endless efforts in promoting financial inclusion and financial literacy. Thank you. 2  BIS central bankers’ speeches
Simply ask the following question: If r* were close to its long-run historical value of 2 percent, would we expect to see the economy growing at only slightly above its potential growth rate? The fact that the economy is growing quite slowly despite a low federal funds rate and a very large Federal Reserve balance sheet suggests that monetary policy currently is not providing that much stimulus to the economy. In other words, the gap between r* and the federal funds rate is relatively narrow. Why is r* depressed and how is it likely to evolve over time? In my view, several short-term factors are restraining r*. First, the short-run r* is low because the foreign exchange value of the dollar has risen, reflecting both the fact that foreign economies are growing slowly and as well as an expectation that the monetary policies of the U.S. and other major economies will continue to diverge for some time. If foreign demand picks up and the dollar weakens, then r* would likely rise over time as the persistent drag from the trade sector lessens. Second, short-run r* is low because of the hangover of the financial crisis. For example, mortgage credit availability for households with low FICO scores is still very limited compared to pre-housing boom standards. This is constraining their ability to purchase housing, which holds back the pace of residential investment.

Thus, projections for export-weighted global growth index for Turkey also pointed to a lower pace of growth for external demand (Chart 15). Hence, we based our inflation forecasts on an outlook of weaker external demand compared to the previous period. BIS central bankers’ speeches  7  Chart 15. Export-Weighted Global Economic Activity Index* (2009Q1=100)  * For methodology, see Inflation Report Box 2.1 “Foreign Demand Index for Turkey”. 2010–II,  Source: CBRT, Bloomberg, Consensus Forecasts 2011 October and 2012 January Bulletins. In sum, we revised our output gap forecasts upwards for the second half of 2011 considering the stronger-than-expected economic activity in the third quarter. Meanwhile, due to the deterioration in the global growth outlook, we estimate that aggregate demand conditions will provide a stronger support to disinflation in the medium term compared to the previous reporting period. We also revised our assumptions for commodity and oil prices slightly upwards. Considering the recent developments and futures prices, we revised our assumptions for oil prices upwards from USD 100 to USD 110 per barrel for 2012 and to USD 105 for 2013. Accordingly, our assumptions for import prices were also subject to a slight upward revision (Chart 16). In addition, we preserved our assumptions for the annual rate of increase in food prices at 7.5 percent throughout the forecast horizon. Chart 16. Revisions in the Assumptions for Oil and Imports Prices Oil Prices (USD/Barrel)  Source: Bloomberg, CBRT. 8  Import Prices (2003=100)  Source: CBRT, TurkStat. BIS central bankers’ speeches  3.
The strength of the UK recovery and the fall in its unemployment rate suggest that the equilibrium real interest rate is now rising gradually back towards zero. The Ghost of Christmas Past should not be forgotten. A recovery may be gaining pace but our economies are a long way from normal. Leverage is still high and weak demand for advanced economy exports could persist for some time. The Ghost of Christmas Yet to Come suggests that it is unlikely that equilibrium interest rates will return to historically normal levels any time soon. This prospect puts a premium on macro-prudential policies and financial reforms to manage the associated risks without abandoning the need to keep interest rates in line with the equilibrium level. So while it is unsurprising that the ideas behind secular stagnation are being revived, it would be a mistake to rush to a more extreme macroeconomic response. There is a long history of pessimism in economics, from Thomas Malthus through Alvin Hansen to Robert Gordon. Such worries have proven misplaced in the past and scepticism is warranted now. Don’t forget that the US economy is more than 13 times larger than when Hansen first formulated his ideas. Similar performance must again be possible. Central banks are playing a catalytic role to help deliver it but their contribution will ultimately be limited. The most important drivers of long term prosperity will be measures taken by others to increase the growth of supply, particularly those that reinforce an open, global economy.

This dynamic suggests scope for a strong recovery in which falls in unemployment are much more limited than usual. Potential growth in the UK could also be pro-cyclical but for different reasons. In Britain, the employment rate has fallen only a third as much as in the US (Chart 6). The flipside of that strength has been exceptionally weak productivity growth (Chart 7). Will UK productivity growth pick up alongside demand? The fundamentals are promising. Given the flexibility of its labour market, the continued openness of the economy and the credibility of macro policy, it is hard to think of any reason why there should have been a persistent deterioration in the rate of potential growth in Britain. This hypothesis holds particularly now that the UK financial system is beginning to function more effectively. Until recently, the weakness of the banking system limited the reallocation of capital and labour from less to more productive activities. Indeed, whereas half of all productivity growth at the economy-wide level in the years prior to 2008 occurred through this channel, reallocation appears to have made no contribution to productivity growth in recent years.5 There are other reasons to think that growth itself should bring a supply side improvement. As the economy recovers, investment should pick up and part-time workers should shift into more productive full-time work. With the sharp fall in real wages during the recession (Chart 8), employees effectively priced themselves into low-productivity work at a time of weak demand.
We will need to think about the composition and structure of our balance sheet on both the asset and liability sides.19 This consideration will be important should large-scale asset purchases (LSAPs) become a more standard tool for central banks, which could happen if lower levels of equilibrium real rates imply an increasing frequency of very low overnight rates. Further, some analysts have argued that there might be a role for balance  16  To support the implementation of monetary policy and the analysis of money market conditions, the Federal Reserve began collecting transaction-level data on federal funds, Eurodollars, and certificates of deposits from a large set of domestic banks and agencies of foreign banks operating in the United States on April 1, 2014. In February 2015, the New York Fed announced plans to begin using the new data to calculate the daily federal funds effective rate and to begin publishing an overnight bank funding rate based on transactions in both federal funds and Eurodollar markets. See http://www.newyorkfed.org/markets/opolicy/operating_policy _150202.html and http://libertystreeteconomics.newyorkfed.org/2015/04/the-fr-2420-data-collection-a-newbase-for-the-fed-funds-rate.html. 17  A staff memo from 2008 suggested that in a floor system the level of excess reserves “might be on the order of $ billion but could be larger on some days.” For context, at the time, a number like $ billion would have been held up as an extremely large level of excess reserves, well beyond anything we might have seriously considered as the level of reserves needed to implement a floor on rates. See http://www.federalreserve.gov/foia/files/20080411.IoR.FOMC.Options.paper.public.pdf.

Second, while the Federal Reserve has great confidence that our normalization framework will be effective at allowing us to raise money market interest rates when the Federal Open Market Committee (FOMC) determines it is appropriate, we expect to learn a lot about how money markets react to that framework as we move away from the current very low interest rates with a large amount of reserves in the banking system. We can then incorporate knowledge gained during our post-liftoff experience into our thinking. We have the benefit of not starting from scratch in this effort. There already exists a rich academic literature on monetary policy implementation frameworks, and we saw some relevant examples this morning. This literature dates at least back to the late 1960s, when Bill Poole developed a model that is still being used today.7 Recent developments have revealed that our money markets are not frictionless, and current research incorporates this reality of market segmentation. Some of the papers we have seen today try to contend with the effects  negative rates did not require any changes in these central bank’s respective frameworks for policy implementation, although some legal and operational work was required. 7  William Poole, “Commercial Bank Reserve Management in a Stochastic Model: Implications for Monetary Policy,” Journal of Finance 23, no. 5 (1968): 769–91.
Following the shutdown, a second phase now ensues in which the economy is gradually beginning to recover, in step with the lockdown-easing measures. Some key characteristics mark this second phase. First, uncertainty remains very high. There are still many unknowns as to how the disease will unfold. This uncertainty will adversely affect consumption and investment decisions and international trade. Second, minimising the risk of a second wave of the disease will mean retaining certain restrictions and health safety measures for some time. These circumstances will have a bearing on normal economic activity and will unevenly affect the different productive sectors. Third, we will also be able to see in this phase to what extent, despite the economic policy measures applied, the crisis is causing more lasting damage to different sectors, firms and population groups. Finally, signs are emerging that the pandemic may cause some structural changes, although these are difficult to define at present. In this second phase, the economic policy response must combine two objectives: to support the recovery (which advises not withdrawing the support measures prematurely, as that would increase the risk of economic growth enduring more lasting harm); and to help the economy adjust to the post-pandemic scenario. 1  This extraordinarily complex setting also necessitates the definition of a reform agenda aimed at tackling our economy’s structural challenges, which have become more pressing with the crisis. Lastly, nor should we forget that, after the pandemic, we will have our highest level of public debt in many decades.

Investment grew by an estimated 12.8%, somewhat less than in 2003. GDP growth in the euro area is estimated at 1.9% in 2004 and growth prospects are lean for the years to come. This shows yet again the difference in the economic challenges faced by Iceland and the rest of Europe, since policies there aim at stimulating the economy, whereas Iceland’s problem is to try to prevent overheating. The widening current account deficit is also a cause for concern. Last year it is estimated at 70 b.kr., the equivalent of 8% of GDP. Exports increased by 12% in 2004 after being virtually stagnant in 2003. The strong value of the króna, robust private consumption and stepped-up investments in  BIS Review 22/2005  1  aluminium-related projects are reflected in substantial import growth during the year. Merchandise imports were up by 23% in real terms, the sharpest increase since 1998. Roughly one-third of the current account deficit may be attributed to investments in the aluminium and power sectors. The current account deficit is forecast to widen even further in 2005, but will also peak this year instead of in 2006, as had been forecast earlier. Unemployment declined slowly last year despite brisk economic activity. It was not until the closing months of the year that labour market statistics indicated mounting pressures. Seasonally adjusted unemployment measured 2.4% in February and vacancies have soared. To some extent, growing labour demand was met with imported labour; issues of new work permits almost doubled in 2004.
Dimitar Bogov: Republic of Macedonia – celebrating monetary independence Opening address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the gala event on the occasion of the 20th anniversary of the monetary independence of the Republic of Macedonia, Skopje, 26 April 2012. *  *  *  Honorable President of the Parliament of the Republic of Macedonia, Honorable fellow Governors of central banks, Distinguished guests, ladies and gentlemen, Let me wish you all a very warm welcome and thank you for accepting our invitation to attend this gala event on the occasion of our landmark anniversary – twenty years of the monetary independence of the Republic of Macedonia. On this day, April 26, we recall the numerous challenges that we faced, the numerous difficulties we have gone through in the past twenty years exactly. On this day, we are reminded that the beginnings were not easy and that those beginnings emerged in a period of, I can say without false exaggeration, huge enthusiasm of all individuals involved in creating our own independent state with all attributes that this state should have. In this reminiscence of the persons who were involved in the monetary independence, I especially feel the need to point out the name of the first Prime Minister of the independent Republic of Macedonia, the academician Nikola Kljusev, who played one of the leading roles not only for the monetary independence, but also for many other decisions of that time, important for the completion of statehood.

Finally, I would add that we, at the National Bank, have learned a lot from the mistakes that economic policy-makers have done in the past. But, as confirmed by the history of our institution, monetary independence is perhaps the decision that best helped us to contribute to the improvement of the efficiency of the economic policies, and thus improve the living standard generally, in a state-making, institutional, economic and practical way. Long live this great anniversary! BIS central bankers’ speeches  3
But still, being for the euro is simply a total political non seller. If I were to summarise the arguments against joining, be it on the side of the general public or professionals, they would be roughly threefold: A. The first one is sentimental rather than economic. We have been living with our Czech koruna, or crown, for quite some time and our country has a long history of monetary stability and stabilisation. By the way, we have had the same name for our currency ever since 1892, from the times of the Austro-Hungarian monarchy (the crown is a monarchist name – what a paradox in our republic) and there has never been any reason to rename it. The old adage says: If it ain’t broke, why fix it? If you have low and stable inflation on your own, you don’t need any credibility for your currency from abroad. B. The second argument is more economic. Money matters. And monetary stabilisation matters. If you have shocks in the economy, something has to move to offset the shock. Something has to be flexible. It is easier to accommodate shocks through flexible interest rates or a flexible exchange rate than through wages, unemployment or budget expenditure. We discussed yesterday how hard it can be if you don’t have monetary policy to adjust to shocks. This is a classical argument of monetary economics for the active role of elastic money when you don’t have flexible prices or wages. Simple as that.

Our country was in the midst of solid economic growth and was experiencing a strong inflow of foreign workers. In the first three quarters, year-onyear growth amounted to 2.4%, buttressed by all components of global demand except construction. At the end of summer, however, the situation turned completely. The faltering international credit markets and the mounting uncertainty caused global trade to plummet and prompted a decline in growth in our export markets; indeed, most of our trading partners actually went into recession. In the fourth quarter of 2008, Switzerland’s GDP receded to 1.2% and unemployment, which had reached a low-water mark of 2.5%, started to climb again. In our quarterly assessment of last December, we predicted a 0.5-1% drop in GDP for 2009. In March this year, based on the latest data available, we revised the forecast downwards to a 2.5-3% decline. The SNB’s reaction In autumn 2008, as I said, we experienced an abrupt downturn of the economic cycle and, owing to plunging commodity prices, a spectacular change in the inflation outlook. Whereas inflation had been at 3.1% in July, price stability was entirely re-established from November onwards. This reversal forced the SNB to take rapid and decisive measures to ease its monetary policy. In a series of five steps between October 2008 and March 2009, we lowered the target range for the three-month Swiss franc Libor and brought down the market rate from 3% to 0.25%.
And indeed not only are restrictions still in force in some areas of activity, but it is also proving necessary to reintroduce others as a consequence of the fresh outbreaks of the disease. In this context, the euro area outlook remains highly uncertain and the risks to the area tilted to the downside. At the same time, there are already signs that the pandemic may give rise to certain structural changes, although the full extent of these is, for the time being, difficult to know. In this context, for me the key for economic policies is to strike the right balance between supporting the recovery and spurring economic adjustment to the structural changes that will emerge after the pandemic. This means first maintaining support measures and avoiding cliff-effects. Indeed, after the pandemic many euro area countries will be facing the highest level of public debt in many decades. And facing this challenge will require a gradual fiscal consolidation programme once the economy moves back onto a sound growth path. In the short run, however, the damage caused by the premature withdrawal of support measures would exceed the possible cost of maintaining them until the recovery shows signs of sufficient strength. Notwithstanding, given the significant heterogeneity of the effects of this crisis, in particular in this recovery phase, support measures should be much more focused now and their timing adjusted to the duration of the crisis. In addition, we have to adjust the specific instruments used.

The key difference with previous programmes is that purchases are now conducted in a flexible manner and fluctuations in their distribution will be allowed over time, among jurisdictions and across asset classes, with a view to preventing fragmentation in monetary policy transmission. 1  The volume of purchases initially announced under the PEPP was € billion for the whole of 2020. In June the term was extended up to at least June 2021, and the volume by a further € billion, making for a total of € trillion. The PEPP, together with the new purchases under the Asset Purchase Programme (APP), will increase the portfolio of the Eurosystem’s securities purchase programmes to around € trillion in June 2021. In early October 2020, net purchases of public and private sector assets under the PEPP had already reached € billion since its launch at the end of March, i.e. 42% of the current envelope. Today we can safely say that the PEPP has been clearly successful in curbing financial market deterioration in all euro area countries. This is particularly visible in sovereign yields, which are now close to their pre-crisis levels; but it may also be perceived in other market segments such as that for corporate debt. And, of course, this decline in the cost of sovereign debt has provided policy space for fiscal authorities in all euro area countries, enabling them to take unprecedented measures to sustain the income of households and firms.