samchain/econo-pairs-v1 huggingface dataset:
For money to be a generally accepted medium of exchange, it must be possible to use it to buy goods or services not only today, but also tomorrow, and the day after, and so on. Money can therefore also be used as a store of value. However, money is not the only means of holding and growing wealth, and it is often not the most profitable. Although it does offer security and flexibility, unlike risky financial investments it generates little or no return. So what constitutes sound money? My answer is unlikely to come as a surprise: money is sound if it fulfils its functions as well as possible. And this depends on its value being stable. Only if this is the case will it be broadly accepted as a medium of exchange over the long term. Furthermore, as a unit of account, money that is stable in value makes it possible and easier to plan and calculate, and it is also suitable as a store of value. However, the importance of money that retains its value goes far beyond these three narrowly defined functions. Sound money contributes to preserving the real value of financial claims with fixed nominal amounts, such as savings deposits, bonds, employment contracts and pensions. It thus creates security and trust, which in turn promotes social harmony and cohesion. Money is therefore sound if it neither depreciates nor appreciates, i.e. if there is neither inflation nor deflation. But how can we measure the development of the value of money over time?

The European Central Bank has therefore been fulfilling its mandate, which is to keep inflation below, but close to, 2% over the medium term. BIS Review 156/2010  1  With all the challenges we have faced since 1999 – the cash changeover, the oil price spikes, the internet bubble, the turbulences in the aftermath of 11th September and, of course, the global financial crisis – maintaining price stability is a notable achievement. What is more, looking ahead, inflation projections and inflation expectations are well anchored in line with price stability. The launch of the ESRB My main topic for today is macroprudential oversight and the new body that the European Council and the European Parliament have decided to create: the European Systemic Risk Board or ESRB. The legislation has been finalised yesterday and the ESRB will soon become reality. I am honoured to speak to you today not only as president of the ECB but also in my future role as Chair of the ESRB. The new European body will be part of the new European System of Financial Supervision and it will be located here in Frankfurt. The city can therefore be proud to host three European authorities: the ECB, the European Insurance and Occupational Pensions Authority (EIOPA) and the ESRB. The function of the ESRB will be to provide macro-prudential oversight of the European Union’s financial system.
Last year the previous Riigikogu issued the central bank with a clearer mandate than ever before for macroprudential supervision in Estonia, and we have started to act on this mandate. Macroprudential supervision aims to increase the resilience of the banks and the rest of the financial system to systemic problems and to restrain the accumulation of major risks. •  The first measure introduced by Eesti Pank was the requirement for commercial banks to hold a 2% systemic risk buffer. The systemic risk buffer is needed to manage the banking risks that are specific to a small and open economy. The introduction of the buffer did not imply any major changes for the banks operating in Estonia, as their capitalisation levels were already above that required. The measure was a precautionary step by the central bank to guard against possible risks in the future. •  The second step was taken three months ago when requirements for housing loans were applied to the commercial banks by the central bank with the aim of pre-  BIS central bankers’ speeches  3  empting possible credit booms in the future. The requirements do not have any noticeable effect on the loan market as things stand, as the banks are in any case currently acting conservatively. Both of these measures are precautionary steps taken against any significant future increase in the risks in the real estate market should competing banks start to take on excessive risk.

Ardo Hansson: European and domestic economic challenges for Estonia in 2014 Speech by Mr Ardo Hansson, Governor of the Bank of Estonia (Eesti Pank), to the Riigikogu (the unicameral Parliament of Estonia), at the presentation of Bank of Estonia’s Annual Report 2014, Tallinn, 26 May 2015. *  *  *  Honourable President of the Riigikogu, Distinguished Members of the Riigikogu I am here today to give you a summary of the year 2014 at Eesti Pank. I will speak on the economy in the euro area and on monetary policy, and I will discuss the Estonian economy and the work of the central bank last year. The euro-area economy, monetary policy and fiscal policy In 2014 the economy of the euro area as a whole grew, but the situation varied a lot between different countries and overall growth was slower than had been forecast. Data from the start of this year suggest that economic activity in the euro area is staging a modest recovery. The competitiveness of the euro area has improved during the recovery from the crisis, but again the situation varies between countries. There are countries that have successfully introduced reforms, but there are also those where reforms have stopped or even gone into reverse. •  Here I must emphasise that long-term economic growth can only be built on reforms that raise economic competitiveness.
The first was the crisis in the early 1990s as Head of the Swedish Bank Support Authority, colloquially known as the “banking ER”, which was responsible for the state’s support measures to banks. Then, it was a question of guaranteeing the solvency of banks. The second was the financial crisis in 2008‒2009 when the Riksbank took action and basically guaranteed to supply the banking system with all the liquidity required to ensure it continued to work. I now have reason to say this for the second time as Governor of the Riksbank. But the crisis this time is different. To begin with, it is not a financial crisis in origin but a crisis that has arisen due to a total collapse in demand and restrictions on the supply side. This time it 4 [5]  is a question of the state bridging over in different ways so that companies can survive. The Riksbank, together with Finansinspektionen, the Swedish National Debt Office and the Ministry of Finance, has so far taken forceful measures and we have supplied large amounts in order to ensure that credit supply continues to work. The Riksbank stands ready to do more if and when necessary to help the Swedish economy get through this economic crisis as well. We may need to do even more if necessary, and do it again and again until we all see the light at the end of the tunnel. And this we are prepared to do. 5 [5]

We must allow innovation and the adoption of new technologies – to harness their benefits while managing their risks. We must step up our efforts and cooperation to combat the growing threat of cyber risk. A common theme emerges when we look back as well as look forward. The choice is not between light regulation and hard regulation, or between less regulation and more regulation. What we must collectively seek is smart regulation – regulation that achieves resilience with efficiency, stability with growth, safety with innovation. We will then have a financial industry that is systemically sound and also serves the needs of the economy and society. It is a vision worth working for, together. Thank you. 1 Ollivaud & Turner, “The effect of the global financial crisis on OECD potential output”, OECD Journal of  Economic Studies, 2014. 2 8/9  BIS central bankers' speeches  2 See for instance, David Luttrell, Tyler Atkinson, and Harvey Rosenblum, “Assessing the costs and  consequences of the 2007–09 financial crisis and its aftermath”, Dallas Federal Reserve, September 2013; and US Government Accountability Office “Financial regulatory reform: financial crisis losses and potential impact of the Dodd-Frank Act”, January 2013. 3 FSB, “Report on implementation and effects of G20 reforms”, August 2016. 4 Thomson Reuters, “Cost of Compliance 2016” 5 Daniel Tarullo, “Departing Thoughts”, 4 April 2017. 6 William Dudley, “Principles for Financial Regulatory Reform”, 7 April 2017. 7 Christopher Giancarlo, “CFTC: A New Direction Forward”, 15 March 2017.
Table 1 shows peak levels of the primary fiscal deficit in the UK during the global financial and Covid crises. The degree of fiscal support has plainly been materially larger – more than twice as large. And relative to the size of the economy’s output gap, which is smaller than at the time of the global financial crisis, this degree of fiscal support has been larger still and multiplies of the output gap. Table 1: Peak Fiscal Deficits in the Global Financial and Covid Crises Peak primary balance (a)  Peak output gap (b)  Global Financial Crisis  -8.3  -4.2  Covid Pandemic  -18.0  -3.1  Source: OBR and Bank of England Note: (a) % of GDP. (b) % of potential GDP. Fiscal numbers for pandemic are based on OBR November 2020 forecast for FY 2019-20. The appropriate degree of fiscal support to close the output gap has recently been a source of debate in the United States. 21 There, the fiscal response is prospectively larger than in the UK, and the output gap smaller, meaning the upside risks to demand and inflationary are likely to be larger. 21  For example, see Olivier Blanchard here. 21  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  21  (e) Psychological Scarring A final potential difference from the past concerns the degree of psychological scarring of risk appetite among household and companies as a result of crisis.

This means in turn that it is reasonable to assume that wages will rise more quickly (slide 8). And the agreements signed so far support this picture. The new agreements will make an impact in 2008, and the labour shortages will also become more marked then. We are therefore counting on wages increasing more during next year than in 2007, by around 4.5 per cent. Labour costs per hour are also expected to increase. How this affects companies’ costs for the goods they produce will in turn depend on how productivity develops. Productivity growing more slowly and labour costs increasing If one looks back at the past decade, productivity in the Swedish economy has improved significantly (slide 9). This meant that production could increase more quickly than costs. It also contributed to employment showing fairly weak development over a long period, despite good growth. But more recently employment has increased, while productivity growth has been lower. We believe that the slower productivity growth is to some extent temporary. There can be several  BIS Review 132/2007  5  reasons for this. One reason is probably that new persons are being employed in the companies and that it quite simply takes time before they are fully productive. Another could be that new groups are entering the labour market. For instance, the service sector normally increases fairly late in an economic cycle and then the productivity measured is slightly weaker.
In the years ahead, the multilateral trade system is at risk of being undermined, which may leave us with a more fragmented system. This may adversely affect small countries in particular. In that situation, it would be injudicious for Norway to compromise its current agreements with Europe. Climate change requires structural adjustments The world needs more cooperation, not less. We are facing a climate crisis that can only be addressed by engaging in a common global effort. Last year’s report from the UN climate panel was alarming. If work to reduce greenhouse gas emissions is not intensified, global warming could spin out of control. A warmer planet will have serious consequences. Major changes in production methods and consumption patterns are needed in order to mitigate global warming. Measures taken must lead to concrete reductions in global emissions and should be cost-efficient. Emissions pricing is essential to reducing greenhouse gas emissions. The polluter must pay. The consequences of not having applied this principle at a global level are now coming into evidence. To quote one of last year’s Nobel laureates in economics, William D. Nordhaus: “The result is too much burning of fossil fuels, too much climate change, and too many harms to humans, wildlife, ecosystems, and more.”2 It is a demanding task to put into place adequate measures. The gains from lower emissions are shared by all - also by those who do not contribute. This creates a free-rider problem both at the global and national level.

When ‘imbalances’ arose and countries were depleting or building their official reserves, a key feature of this system was supposed to be that both the creditor and debtor countries were obliged to adjust their imbalances. In practice, the obligations on creditor and debtor countries were asymmetric, and in part that explains why the system proved unsustainable. One drawback of the system was that it did not allow countries to smooth their expenditure in the face of fluctuations in their income. The role of the IMF was to facilitate some smoothing, by lending pooled reserves. Alternatively, changes in exchange rates would be sanctioned by the IMF for those countries judged to be in "fundamental disequilibrium". In doing this, the IMF fulfilled its purpose to help achieve orderly world growth. The history of the United Kingdom illustrates these features of the Bretton Woods system. Britain faced repeated challenges in achieving external balance during the Bretton Woods era. Sterling was devalued twice and four IMF lending programmes were necessary. Yet in 11 of the 17 years between 1955 and 1971, the UK ran a current account surplus, and its current account deficit peaked at around a mere 1% of GDP in 1964. Over time countries realised that restricting their ability to save and invest overseas was a significant limitation on their wellbeing. Opening up capital accounts broke the link between current income and current expenditure, and enabled countries both to smooth consumption and to diversify risk.
This stock of vacant homes will shrink when fewer are foreclosed upon and more of these homes are sold or rented out. 2  BIS Review 137/2010  On the sales side, even though low mortgage interest rates and falling home prices have together boosted housing affordability to its highest level in 40 years, the current pace of sales is quite sluggish. Impediments to home sales include tight lending standards, a weak job market and continued uncertainty regarding the future path of home prices. The large decline in home prices that occurred between 2006 and 2008 is also important. This decline reduced the amount of equity that owners have in their homes, making it difficult for people to come up with the funds needed to “trade-up” and move into better homes. In addition, the steep decline in home prices put many families at risk of mortgage delinquency and, ultimately, losing their homes to foreclosure. With lower home prices, many families now owe more on their mortgage than their home is worth. This means that they cannot refinance or sell their homes easily if they experience a financial crisis, such as a job loss or a serious illness. Recent developments on foreclosures have been mixed. While RealtyTrac reports that foreclosure completions in the United States exceeded 100,000 for the first time in September, it is important to remember that foreclosure is a lengthy process in most states.

Home prices have generally stabilized across upstate New York, with some parts, such as Buffalo, Rochester and Syracuse, even experiencing price increases over this period. However, home prices have continued to decline in the greater New York and New Jersey area. By contrast, the number of home sales have generally increased throughout the region over the past year. But the pattern has been erratic because of various policy changes. In particular, the introduction, initial expiration and subsequent extension of the home buyer tax credit introduced volatility as it boosted, slowed and then boosted sales again. With the final expiration of this tax credit, the recent rise in home sales across New York and northern New Jersey may well be short-lived. Regional housing trends: focus on New York City I’ll end with a few remarks about New York City’s housing market – a very large market that stands out as unique in many respects. Let me remind you of some of these key differences:   Compared with the rest of the region, and with the rest of the country, New York City has an exceptionally large share of rental housing: 67 percent of homes citywide versus 33 percent for the United States.   The market is dominated by multi-family structures, especially in Manhattan and the Bronx. When these units are owner-occupied, they are more likely to be co-ops than condominiums, and, thus, to have comparatively low leverage rates.   New York City has very high housing prices and long construction lags.
At times when there is a broad consensus this may not be a problem but if there is a difference of views the reports do not always clearly convey the extent of this difference and how many people are in the various camps”. Such comments reflect the inherent difficulty of communications by a committee with individual voting. It is important that everyone understands the distinction between those forms of communication which focus on individual views, such as the minutes, and those which present a collective viewpoint explaining decisions of the Committee as a whole, such as the Inflation Report. As I said in my lecture to this Society five years ago, “it should be clear that there are both benefits and costs to a group decision-making process. The transparency and accountability of individual views helps to make better decisions. But it also complicates the communication of the decision to a wider audience, whose expectations of inflation matter for economic behaviour. The avoidance of confusion requires some forbearance by individual members of the Committee, and a clear understanding of which forms of communication are appropriate to explain individual views and which forms are suitable for explaining the reasons for a collective decision”. Or, as Alan Blinder has put it in a discussion of individualistic policy-making committees, “a central bank that speaks with a cacophony of voices may in effect have no voice at all”. The results of the survey are broadly consistent with the propositions I put forward in my Mansion House speech last year.

available  at:  King, M A (2005), “Monetary Policy: Practice Ahead of Theory”, Mais Lecture at the Cass Business School, London, Bank of England Quarterly Bulletin, Summer 2005. Lombardelli, C, Proudman, A J and Talbot, J (2005), “Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making”, International Journal of Central Banking, 1, 5. 12  BIS Review 43/2007  Svensson, L E O (2003), “The Inflation Forecast and the Loss Function”, in Mizen (ed. ), Central Banking, Monetary Theory and Practice: Essays in honour of Charles Goodhart, London: Edward Elgar. Taylor, J B (1979), “Estimation and Control of a Macroeconomic Model with Rational Expectations”, Econometrica, 47, 5. BIS Review 43/2007  13  14  BIS Review 43/2007  BIS Review 43/2007  15  16  BIS Review 43/2007
The reason, of course, is that there is no simple, direct, link between our essential instrument - the short-term interest rate - and our objective, the rate of inflation. BIS Review 23/2002  1  Interest rates essentially affect the demand side of the economy. They do not directly influence the supply side, which depends upon a whole host of structural characteristics of the economy which are largely beyond the direct reach of monetary policy. What we have to do in managing short-term interest rates is to keep overall demand growing broadly in line with the underlying - sustainable supply-side capacity of the economy as a whole to meet that demand. In other words we are trying to maintain overall, macro-economic, stability in a much broader sense, in the medium- and longer- and not just the short-term; and the Government's inflation target is the criterion against which our success, or otherwise, in achieving that broader macro-economic stability is to be measured. Our problem is that we don't know with any great precision or confidence exactly what is happening on the supply-side - that's to say precisely what rate of growth we can hope to sustain. We don't know precisely either what is currently happening, or what is likely to happen, looking forward over the next couple of years or so, to overall, aggregate, demand. And we don't know precisely what the full impact of a change in interest rates will be on aggregate demand, or how long it will take before that full impact is felt.

More  11  The impact on the physical capital stock would be compounded to the extent that the recession also weighed on the growth in human capital. In particular, employees ability to “learn by doing” on the job or through job related training is likely to have been reduced as a result of the decline in average hours during the recession. Weale (2010) suggests that the learning by doing channel could eventually reduce aggregate labour productivity by around ½%. 12  “Investigating the characteristics of patents and the businesses which hold them”, Thomas, A., Economic and Labour Market Review, April 2011  BIS central bankers’ speeches  5  generally, the amount of management time devoted to raising finance and managing banking relationships has increased very substantially, diverting attention from the search for new products and new markets. It is impossible to quantify with any precision the effect that strains within the banking system have had on the growth of productivity over the past few years. But evidence from previous periods of financial turmoil suggests that the effect might be material. In particular, research by the IMF suggests that persistent falls in TFP growth following banking crises can account on average for around one third of the loss of output seen following such episodes (IMF 2009). So where does all this leave us? As I warned you upfront, I don’t think there is a single, simple explanation for the recent surprising weakness of productivity. Some of it may well get revised away.