samchain/econo-pairs-v1 huggingface dataset:
3 While Norges Bank seeks to maintain the sum of the reserves in the banking system around NOK 35 billion, the sum of banks’ quotas is NOK 45 billion, so that banks as a whole can always deposit the reserves outstanding in the banking system at the key policy rate. Should the volume of reserves exceed the sum of banks’ quotas, some banks would have to hold reserves at the reserve rate. That would push down the overnight interbank rate towards the reserve rate. But for that to occur, Norges Bank would have to stop withdrawing surplus liquidity through market operations. There are no plans to make such a change to our liquidity policy. The reserve rate in Norway is now at a negative 0.25 percent. But this will not lead to negative money market rates. With normal liquidity management, which ensures that there are no excess reserves in the system, the key policy rate – not the reserve rate – determines  1  Similar quota systems are in use in Denmark, Switzerland and New Zealand. For a more general discussion of liquidity management systems, see Syrstad, O. (2011): “Systemer for likviditetsstyring: Oppbygging og egenskaper” [Liquidity management systems: design and features], Norges Bank Staff Memo 5/2011 (Norwegian only). Banks’ feedback on the current liquidity management system, introduced in October 2011, is discussed in Norges Bank Papers 4/2014: “Banks’ assessment of Norges Bank’s liquidity management system”.

10, 11 We can conclude that, all in all, the aim of quantitative easing has been achieved to a certain extent. Yields have fallen and securities prices have risen. But using strong medicine over a prolonged period also has side-effects. Returns on low-risk securities have been pushed down to a very low level. Investors facing a required nominal rate of return may have invested in higher-risk projects than they would otherwise have chosen. As growth prospects improve and monetary policy normalises in the US and Europe, capital flows may be reversed. This may result in increased volatility and wide swings in financial asset prices. When and how central banks will be able to return to more normal monetary policy is thus an open question. Effects on the real economy Chart: Nominal and real interest rates Internationally, monetary policy has moved into unknown territory, employing instruments that have rarely been used before. The theoretical framework is being developed as we gain experience of using these instruments. The need for deleveraging is restricting household and company spending behaviour, adding to uncertainty about the effect of the new monetary policy measures on inflation and employment. At the same time as the post-crisis deleveraging may have weakened the effect of policy rate cuts, advanced economies are facing structural changes that influence the long-term growth picture. It is likely that the level of interest rates that would have a neutral effect on the economy has fallen.
The solution was what might be called a shift in stabilisation policy regime, where the tasks of both monetary and fiscal policy were essentially redefined. We were given a clear division of roles in economic policy. Previously, fiscal policy had often been overly expansionary and contributed to high inflation. Now it was subjected to requirements for long-term stability and sustainability in the public finances. A floating krona meant that the main task of monetary policy was to directly act to ensure inflation remained at a low and stable rate. In January 1993 the Riksbank specified this task as ensuring that inflation remained at two per cent a year. This target would formally begin to apply with effect from 1995, but monetary policy would also be aimed at directly steering inflation during the interim period without intermediate goals, such as the money supply. This created a new norm for monetary policy and Sweden then became one of the first countries in the world to conduct monetary policy with a floating exchange rate and a specific inflation target. One interesting fact in this context is that Sweden actually had a specific target for prices during one period in the 1930s - this was the first and as far as I know the only time a country has attempted this.

The target is for the annual rate of change in the CPI to be 2 per cent, with a tolerance for deviations of plus/minus 1 percentage point. The decision to define the target for monetary policy in terms of a specific figure was of course partly due to the desire to create a nominal anchor that everyone could recognise and base their expectations on. However, another important reason was that a specific target would facilitate assessments of the Riksbank’s activities and make it easier to hold the Riksbank accountable, which was important when it had been granted so much independence. Inflation can be measured in many different ways. The Riksbank chose the CPI as target variable partly because it is a broad price index that represents typical purchases made by consumers and the index is familiar to the general public. But the development of the CPI cannot always indicate what monetary policy is needed at a particular time – no single inflation measure can do this. The Riksbank therefore uses various measures of underlying inflation to describe the trend rate of inflation and to justify the monetary policy conducted. Our most commonly used measure, with the not so pronunciation-friendly name UND1X, consists of the CPI adjusted for certain items that are very directly affected by fiscal and monetary policy. So, there are educational gains with using measures of underlying inflation.
The maturity composition of the Treasury portfolio, not shown in the figure, would be different from what it was before the financial crisis. On the liability side, at normalization, non-reserve liabilities in the median scenario would be considerably larger than they were pre-crisis. Some of the growth in the reverse repo programs we have observed since the crisis might be a second-round effect stemming from the growth in reserves, and therefore some decline in this category is possible as the overall balance sheet size declines. However, my overall read is that much of the increased demand for non-reserve liabilities, particularly currency in circulation, is likely to be persistent past normalization, and indeed demand for reserves is also likely to be higher.7 But what is the longer-run appropriate size for the balance sheet?

I am also confident that the Federal Reserve is well prepared, both operationally and analytically, to identify, understand, and address unforeseen circumstances over normalization as directed by the FOMC. Finally, by accomplishing all these things, I am confident that the FOMC’s policy normalization plan should help promote the ongoing economic expansion. Clearly, the 2013 taper tantrum should leave any observer cautious in assessing a central bank’s ability to normalize its balance sheet smoothly. Those of us who work at the Federal Reserve certainly were. I believe the FOMC’s plan carefully takes into account the range of potential explanations for the taper tantrum, in particular through its emphasis on gradualism and predictability. Early signs on this front are encouraging, with financial market volatility around recent balance sheet announcements quite modest relative to what we saw in 2013. It’s much too early to declare success. However, should this stability continue, I believe the FOMC’s approach may offer useful lessons to other central banks which anticipate reaching a time of transition in their policy stance. In particular, the FOMC has aimed to provide as much transparency as it can in an effort to underscore its intent to achieve an uneventful normalization of the balance sheet. I believe that this level of transparency has been of great importance. 1 I would like to thank James Egelhof for his assistance in the preparation of these remarks, Adam Biesenbach  and Romen Mookerjee for their assistance with data, and colleagues in the Federal Reserve System for numerous insightful comments and suggestions.
The continued international price pressure, combined with an expected appreciation in the krona mean that import price increases will remain low throughout the forecast period. The high productivity growth will also contribute to keeping down companies’ labour costs and thereby inflation (Figure 13). However, these inflation-dampening forces are thus expected to lose strength further ahead. All in all, one can say that we see a favourable and not overly dramatic development of the economy before us. Essentially we see an economy where the wheels are turning at a good pace and things are generally going well. It is natural in such an economy for monetary policy to become less expansionary to ensure the good development continues for a long period. It is difficult to say how quickly the interest rate increases should be made. The inflation forecast we publish today shows that inflation is expected to be slightly below target two years ahead. This is partly due to the fact that energy prices are expected to fall slightly and thereby hold down inflation. When the restraining effect of the energy prices abates, inflation will rise. At the same time, the economy is expected to develop strongly during the forecast period. To ensure that inflation is close to the target and to contribute to a balanced development of the real economy, we decided yesterday to raise the repo rate by 0.25 percentage points. It may in conclusion be worth emphasising that forecasts are always uncertain and that many things may occur to change this picture.

It is a “currency without a state”, in which a group of fiscally sovereign countries shares a single currency and a single central bank issuing fiat paper money, yet evidently lacks a clear monetary hegemon. So the euro is not just a different version of the gold standard, as Balczerowicz, de Soto and many others argue. Not least because of the fact that unlike any commodity standard, the euro lacks anything resembling an ultimate numéraire. And more importantly, within the eurozone Germany is not a monetary hegemon anymore. Yes, the German mark and the Bundesbank were clear monetary hegemons in Western Europe in the pre-euro era. And remember, it was argued that the euro would become “the German mark for the whole of Europe” in the many public debates that went on in Germany prior to its introduction. Yet it is evident that it could not and cannot function in this way. Yes, monetary unification in Europe does not make much sense without Germany. This is still true. But my definition of a clear hegemon is: it should have the right to set the rules and to force others to behave accordingly, the right to enforce the rules. And it has to have the right even to breach the rules itself and still not allow the others to breach the very same rules. But this is not true for Germany after the introduction of the euro.
Charles L Evans: Thoughts on accommodative monetary policy, inflation and financial instability Speech by Mr Charles L Evans, President of the Federal Reserve Bank of Chicago, at the Credit Suisse Asian Investment Conference, Hong Kong, 28 March 2014. *  *  *  Introduction Thank you, Mr. Naqvi. It is truly a pleasure to be here today at the Credit Suisse Asian Investment Conference, and I thank the organizers for including me in this impressive program. Today, I would like to make three points concerning the U.S. economy and accommodative monetary policy. First, the U.S. economy continues to improve, and accommodative monetary policy will remain a strong support for this recovery for quite some time. Second, although highly accommodative monetary policy can lead to increasing inflation risks today, inflation in the United States is too low. And this is true throughout much of the world. Third, while low interest rates could lead to financial exuberance in principle, monetary policy is not the best tool to mitigate this risk. Instead, macroprudential policies are more appropriate tools to address the risk of financial instability. Before turning to the details of these three points, I need to note that, as always, the standard Fed disclaimer applies: I will be giving my personal perspective, and that is not necessarily shared by my colleagues on the Federal Open Market Committee (FOMC) or in the Federal Reserve System.

The recession after the credit bubble burst and oil prices fell in 1986 was deep. The recession was deeper than would have been the case if we had maintained a larger and competitive manufacturing sector. Norwegian industry lost export market shares in the late 1980s in spite of the booming conditions abroad and substantial capacity slack at home. It was recognised that a substantial revision of economic policy would be necessary and that the problems created by inflation had to be taken seriously. The exchange rate was chosen as the nominal anchor in 1986. A fixed exchange rate was an intermediate target for achieving low and stable inflation. Inflation fell gradually to 2-3 per cent in 1991-1992. We had to abandon the fixed exchange rate policy in 1992. An important reason was the weakness inherent in the fixed exchange rate regime in a world with free capital flows and deep financial markets. The krone exchange rate showed, however, little change to begin with and rapidly found a new range. A formal inflation target for monetary policy was introduced in the spring of 2001. The operational target of monetary policy as defined by the government is inflation of close to 2.5 per cent over time. Many countries had already gained many years’ experience in operating such a system. New Zealand was the first in line towards the end of the 1980s. Canada followed shortly thereafter.
Of course, a true Bayesian would assume that people would be able to construct subjective probabilities, and their behaviour would be governed by those beliefs. But Keynes (1936) made much of the pervasive nature of uncertainty in his explanation of business cycles because of the instability of those subjective probabilities. Occasional sharp changes in expectations could, and did, result. That is exactly what happened in the Autumn of 2008, with the sudden and synchronous collapse in business confidence around the world. So the behaviour of economies depends in part upon the beliefs about future events held by the various players: consumers, businesses and governments. Outcomes are endogenous to beliefs about the likelihoods of the outcomes. And in some contexts there may be selffulfilling equilibria. Sudden shifts in beliefs are particularly relevant when many decision-makers interact. The behaviour of a bank’s depositors has many equilibria, each of which depends upon beliefs about whether other depositors are likely to run on the bank. Changes in perceptions of uncertainty may be transmitted rapidly, and amplified, with the potential to affect behaviour in a coordinated way. 4 A restaurant may be much busier than an identical competitor if the first customers of the evening dine there and the next customers suspect the first may know something they don’t, and so follow, with others subsequently joining the herd. The reverse may occur on the following evening. Disentangling the incremental role of shifts in beliefs is often difficult.

At the heart of debates about climate change, the Chilcot Inquiry into the war in Iraq, and the speed of the necessary fiscal consolidation of our public finances, lie questions about how to evaluate and respond to considerable uncertainties. At that seminar in 2005, we discussed three questions. First, in modelling the phenomenon of interest, what is the right balance between simplifying assumptions and technical rigour? Second, how open should we be about what we don’t really know? Third, in communicating uncertainty, how can we prevent the intended audience from focussing excessively on one or two parameters of the underlying distribution at the expense of the whole picture? The discussions compared the Bank of England’s fan charts for the outlook for inflation with the Met Office’s plume charts for forecasts of temperature. This paper updates that discussion, and presents some new ways of communicating uncertainty which are under evaluation by the Monetary Policy Committee. Reference to economics and meteorology is not just because the interests of some of us span both. They are two disciplines united by a common need to grapple with complex systems and communicate forecasts to a wide audience. It is not enough to explain only to experts. Much of the value of forecasts is in their being understood – in all their subtleties – by the general public, or at least sub-groups such as the agricultural industry in the case of meteorology and those involved in wage bargaining in the case of economics.
Ksenia Yudaeva: National debt – vice or virtue? Statement by Ms Ksenia Yudaeva, Deputy Governor of the Bank of Russia, at the Gaidar Forum 2016 “Russian and the world – looking to the future”, panel discussion “National debt – vice or virtue?”, Moscow, 13 January 2016. *  *  *  Before starting the discussion I would like to say a few words about the current market situation. Following the 2008–2009 crisis, bursts of volatility can occasionally be observed in global markets. The reasons are different: debt crisis in the peripheral eurozone countries, changes in the US Fed’s policy, changes in the structure and strategies of the oil market players or, as in the past six months, the situation in the Chinese market. Anyway the bursts of volatility relate to the adjustment of global imbalances, which have been piling up for years, and they are inevitable to a certain extent. This is a part on the new reality we are living in. Given the situation, the Bank of Russia’s main task is to stabilise the Russian economy amid external shocks, create conditions for its quick adaptation to the new environment while retaining high price stability, and macroeconomic and financial stability in general, and henceforth maintain basic conditions for economic growth. If we turn to the situation in the Russian markets, we can see that recently it has been rather stable despite global volatility. There are no problems with liquidity and other risks to financial stability.

Ravi Menon: Allianz and Singapore – growing a specialist insurance hub in Asia Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the launch of Allianz’ Regional Centre, Singapore, 18 September 2013. *  *  *  Mr Manuel Bauer Dr Dieter Wemmer Dr Maximilian Zimmerer Dr Christoph Mascher Distinguished guests, ladies and gentlemen, Good evening. I am pleased to join you this evening at the official opening of Allianz’s new regional centre in Asia Square. Allianz and Singapore This marks a major step forward for Allianz in Singapore and in Asia. For the first time, we will see Allianz’s 450 staff across 11 entities coming under one roof. This new centre will strengthen synergies across business units, enabling Allianz to better serve the needs of its 20 million customers in the region. In a way, Allianz’s story reflects Singapore’s own development as a specialist insurance market. Just ten years ago, the insurance industry in Singapore was focused on writing pure domestic risks. Singapore has now developed the capacity and expertise to underwrite large and complex risks across Asia. With the opening of Allianz’s new office here, Asia Square is also shaping up to be Singapore’s own version of London’s Leadenhall Street, where many prominent insurers and brokers are located. Such physical co-location will help to promote greater exchange of ideas and collaboration, and create an insurance marketplace that is committed to deliver customised and innovative solutions. Mitigating Asian risks The prospects for Asia’s insurance market are bright.
Perhaps a more neutral, if less catchy, description of these trends is needed. In terms of their economic impact, these trends have had the effect of making work more “divisible” than in the past. The fall in unionisation has made workers more divisible at the level of the profession, sector or firm. Wage bargaining 1  See, for example, Abel et al (2016). IMF (2017). See www.gov.uk/government/groups/employment-practices-in-the-modern-economy 4 Solow (2015). 5 For example, Hook (2015). 6 Hudson-Sharp and Runge (2017). 7 Chapman (2017). Also see OECD (2017) for some discussion of ‘job quality’. 2 3  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  is less likely to be collective, and more likely to be idiosyncratic, these days. Similarly, the rise in self-employment and part-time working has made work more divisible at the level of the individual worker. People are more likely these days to be paid by the task or the hour. In short, these shifts have meant work and workers may have become more diffuse, more granular, more divisible than in the past. This increased “divisibility” of jobs and work potentially raises a number of important issues, economic and social, about the relationship between employee and employer, many of which are being tackled by the Taylor Review. I want to explore just one dimension - the extent to which they may have influenced wage-setting in the economy.

The City of Bradford is itself normalising, after a long period of painful adjustment. It has shown real resilience and an indomitable spirit during those lean years. There are now reasons for optimism about the City’s future, as civic and commercial investment return and confidence among businesses and residents builds. Those characteristics – resilience, spirit, optimism, investment, confidence – are ones the UK economy has also had to exhibit of late. They are ones it will continue to need over the next few years during what is likely to be a bumpy ride. Thank you. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Annex  Chart 1: Successive Inflation Report forecasts of wage growth from 2012 Four-quarter wage growth, per cent  7 6 5 4 3 2 1 0 -1 -2 -3 -4  2001  2003  2005  2007  2009  2011  2013  2015  2017  Data  Sources: ONS and Bank of England calculations. Notes: ‘Data’ refers to whole economy total pay (average weekly earnings). Other lines show forecast vintages. Chart 2: Fitted and ‘inexplicable’ component of wage growth Four-quarter wage growth, per cent  8 6 4 2 0 -2  -4 -6 2010  2012 Residuals  2014 Data  2016 Explained by equation  Sources: ONS and Bank of England calculations. Note: ‘Data’ refers to private sector total pay (average weekly earnings).