samchain/econo-pairs-v1 huggingface dataset:
GDP posted lower annual growth than in the first quarter, but with a configuration where natural-resource-related sectors —particularly mining— showed less favorable performance while other GDP changed little, if anything. The total consumption component of demand continued to grow at around 2.5% in annual terms, while investment posted positive growth, boosted by specific factors associated with imports of machinery and equipment. On the other hand, during the second quarter investment in construction and other works showed a sharper than expected fall, with a still weak real estate sector (figure 8). In this context, this Report’s baseline scenario assumes that GDP will rise between 1.5% and 2.0% this year, considering that the information reviewed for the first half of the year brings no surprise with respect to our June projections. For 2017, a range is projected for GDP between 1.75% and 2.75%, down from expectations in June. Our forecast for 2017 GDP puts in in the 1.75% to 2.75% range, less than we expected in June. Domestic demand minus inventories should post a modest recovery in 2017: 2.1% annually, after growing 1.5% in 2016. In any case, we have upgraded our growth projection for this year from June, because we now estimate a smaller decrease of gross fixed capital formation, in particular because of the performance of the machinery and equipment item in the second quarter. However, this is partly offset by the expected annual fall in construction and other works, where a debilitated real estate sector stands out.

Rodrigo Vergara: Chile's September 2016 Monetary Policy Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Honorable Senate of the Republic, Santiago de Chile, 7 September 2016. * * * The Monetary Policy Report of September 2016 can be found at www.bcentral.cl  Introduction Mr. President of the Senate, Mr. Ricardo Lagos-Weber, honorable senators, ladies, gentlemen, I thank you for inviting the Board of the Central Bank of Chile to present our Monetary Policy Report. As it does in September each year, this issue coincides with the Central Bank’s Report to the Senate, presenting our vision of the recent macroeconomic and financial developments in Chile and abroad, together with prospects and implications for monetary policy conduct. After more than two years above the tolerance range, last July the CPI’s annual inflation descended to 4%. The baseline scenario that I will be sharing with you in a minute assumes, as do private expectations, that it will continue to approach the 3% target in the coming months, to close the year at 3.5%. Why has it been so high for so long? We can blame it on the significant depreciation of our peso, driven by the much needed readjustment of an economy confronted with the end of the commodity price supercycle, the end of a very pronounced cycle of mining investment, and a domestic weakening associated with a decrease in the country’s capacity for long-term growth.
To put it somewhat bluntly, this fallacy can be described as follows: Now that the central banks have done so much to save the economy and the financial system from collapsing, they should be permanently in charge of ensuring sound economic growth, high employment, low interest rates and a healthy real estate market. Such extremely high expectations are exceedingly dangerous. Central banks would be forced into a role in which they had to fulfil tasks for which they neither have the requisite responsibilities nor the appropriate instruments. As a result, other agents could be induced to neglect their responsibilities. While the crisis might be delayed, it most certainly would not be overcome. It may appear politically opportune to put problems on the back burner, rather than working out solutions. In the long term, however, the cost to the economy and to society would be horrendous. What can central banks do to counter such unrealistic expectations? They can, for instance, communicate clearly and emphatically what their role is and where their limits are. With this in mind, I invite you to join me on a brief tour d’horizon. I would like to start by examining a few selected aspects of monetary policy, focusing on long-term effects. I will then look at the area of financial stability. Finally, I would like to use the insights gained in this brief overview to answer the question posed in the title of this presentation about the role of central banks.

It is therefore that much more important that the reforms are well-planned and credible, and that they are implemented consistently, but also prudently. There is also the threat that pressure will build on central banks to compensate a failure to reform with monetary policy measures. Central banks can and must resist this pressure, in order that they can continue to focus on ensuring price stability. Governments, on the other hand, should embrace this deep crisis as an opportunity to implement urgently needed structural reforms. Only then will we be able to say, with certainty, that the end of the financial crisis is in sight. BIS central bankers’ speeches  1
All three of these have contributed to lower real rates over this period, although reduced growth in potential output might be more recent. The aging of the population, increased public saving in emerging countries (including the accumulation of foreign exchange reserves), and increased income inequality within countries are among the factors that have contributed to the increase in the propensity to save. Declining relative prices of investment products and increased uncertainty and risk aversion, particularly during the aftermath of the crisis, have negatively affected the willingness to invest. But how does Iceland fit into this picture? As Chart 1 indicates, developments here have been similar, although interest rates have been – and still are – higher than in larger industrialised countries. This is quite at odds with what could be expected based on some of the discussion taking place in Iceland. The fact is that long-term real rates in Iceland are currently at their lowest for this entire period, apart from a short time in the midst of the economic crisis, when the real policy rate was held very low so as to stimulate the economy and presumably pulled longer-term rates downwards for a while. I have said that monetary policy had little to do with these developments. This does not change the fact that these developments have affected monetary policy, as they reflect in part the decline in short-term equilibrium real interest rates. Monetary policy has therefore responded to this with lower nominal interest rates than would otherwise have been appropriate.

16.07.2020  50th anniversary of the UNAAC Margarita Delgado Deputy Governor  Good afternoon. Thank you very much, Manuel. And my thanks also to Cristina for this invitation for me to speak to you today, on the 50th anniversary of the UNACC. It is a shame that we have not been able to celebrate this anniversary as was originally planned. We are living through strange and difficult times, but we must adapt to them. Yet despite this unique scenario, a 50th anniversary is an event well worth celebrating. Anniversaries, especially those which mark the passage of a decade, not least a halfcentury, are an ideal time to take stock of our achievements. Undoubtedly during this period a great deal has been achieved, but if you will allow me, in my supervisory capacity, I would like to make some mention of those areas where we must continue to improve. Over these 50 years we have been through several banking crises. The picture of our financial system as it stands today is naturally the result of these crises. And one point to note in this “family” photo is the large number of cooperatives which are present. The truth of the matter is that a highly significant number of credit cooperatives, or rather, a highly significant number of yourselves, have overcome these crises.
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. With the progress made in fixing the banking system, this negative should become a positive. Second, it is possible that with the sharp fall in real wages during the recession employees effectively priced themselves into low-productivity work at a time of weak demand. To the extent that this allows skills to be retained and reduces costs of replacing particularly skilled employees as the recovery takes hold, the recovery could generate greater productivity as it proceeds. Third, traditional pro-cyclicalities in productivity growth such as learning-by-doing and economies of scale should begin to operate. Finally, accelerating business investment, evident in surveys and increasingly necessitated by the recovery itself, should increase output per hour. Nevertheless, it appears that the recovery will need to be sustained for a period before productivity gains can resume in earnest. The latest data show that more than a quarter of a million jobs were created in a three-month period – the biggest increase since records began in 1971. As a result, unemployment seems to be falling at a pace that will reach our 7% threshold materially earlier than we had expected. Crucially, unemployment remains above the level that is likely to be consistent with maintaining inflation at the target in the medium term.

In addition, a technology shock also may give a boost to stock prices by raising expectations about future corporate profits. As a result, a wealth effect also may stimulate spending before the economy’s capacity to produce has expanded. To sum up, we know that the funds rate had to increase to contain inflationary pressures, regardless of whether the economy was being dominated by demand effects or supply effects. But the uncertainty arises when we have to decide how much to tighten and when to start. This uncertainty boils down to the question of where FOMC actions should be along the spectrum of approaches ranging from strongly pre-emptive based mainly on forecasts of future developments - to more cautious - based mainly on emerging data. Ideally, policy should tend more toward the pre-emptive end of the spectrum because of the long lags between policy actions and their effects on inflation. If a central bank reacts early and correctly to an inflationary threat, it can alter inflation expectations and cut off the rise in inflation before it gets started. It looks like that’s what happened in the US in 1994. At that time, we were dealing with forecasts of higher inflation that were based not only on increasingly tight labor markets but also on low short-term real interest rates. So the Fed responded by raising interest rates substantially. In that case, inflation didn’t take off, and the economy moved smoothly into the favorable environment we’ve enjoyed in recent years.
Jean-Pierre Danthine: Financial stability developments and the delayed new Swiss banknotes Introductory remarks by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 13 December 2012. *  *  *  In my introductory remarks today, I would like to look at the main developments in the area of financial stability since the publication of our Financial Stability Report in June of this year. Afterwards, I will talk about the postponement of the new banknote series. In the area of financial stability, the improvement in the big banks’ capital situation is particularly noteworthy. The prevailing uncertainties and the risks for the banking sector as a whole remain considerable, however. Prevailing risks remain considerable General economic and financial conditions for the Swiss banking sector remain difficult. On the one hand, the situation in the financial markets has eased since June 2012. This is largely due to various decisions and measures taken by governments and central banks worldwide. On the other hand, the easing of tensions in the financial markets should be interpreted with caution. Should the measures already taken not be effective or should the progress made in restructuring government budgets be slow, we cannot rule out renewed turbulence in the financial markets. The European banking industry is also in a fragile state.

The problems with inflation were then accentuated when the financial markets were deregulated. Prices and wages rose steeply and Sweden was caught in wage-price spirals. The occurrence of price bubbles made investment decisions more hazardous and led to weak productivity. A high level of inflation became a permanent feature of our economy. As monetary policy at that time was focused on maintaining a fixed exchange rate, fiscal policy ought to have been tighter. Bit by bit, there was a growing awareness across party political lines that in the longer run this economic policy strategy was not viable, a perception that had already dawned on most countries in our part of the world in the early 1980s. It was now that low inflation in Sweden came to be seen as a necessary condition for achieving stable and sustained growth and thereby high employment. This was clearly expressed officially for the first time in the Budget Statement in January 1991. Combating inflation was given pride of place on the economic policy agenda. The final policy objectives were the same as before but the perception of the conditions that were needed to attain them had changed. This realignment of stabilisation policy occurred, however, at a time when the earlier policy’s negative consequences had begun to leave their mark. Due to the high level of costs in manufacturing, for example, economic growth in Sweden was weak. In addition, a rising real interest rate coincided with a period when the tax reform made savers and investors more sensitive to interest rates.
In particular, the manufacturing sector has been struggling under the effects of sterling's ongoing strength and the weakening in the world economy which I have already discussed. Manufacturing output today is little higher than it was in March 1998, and employment in the sector has fallen considerably over that period. The difficulties faced by the traded sector are reflected in the UK's relatively weak net trade position, which has reduced GDP growth in 14 of the last 17 quarters. Surprisingly, but encouragingly, manufacturing output rose by 1.4% in August - the largest monthly rise for two years. Whether this pickup will persist is, of course, unclear at the moment. In assessing whether some of these short-term movements are likely to last, the MPC is particularly reliant on intelligence from firms. Like others, we pay close attention to the major industrial surveys. But we are also able to call on our network of regional Agents, who talk each month to a wide variety of companies, including, I know, some of you. It is clear from the Agents' reports that the confidence of many of those they speak to has been hit in the aftermath of the terrorist attacks. Labour hiring and discretionary spending decisions may be deferred for a while, whilst the situation becomes clearer. And investment could be reduced if businesses look for a higher return to cover any increased risk. What does all of this mean for inflation? So-called 'upstream' prices - including raw material costs and factory gate prices - remain very subdued.

Since then, many banks have been benefiting from higher exemption thresholds and have an incentive to take on liquidity via the money market. As expected, this demand for liquidity led to higher trading volumes and a slight rise in SARON and other short-term repo rates in the week following the introduction of the new calculation basis (cf. chart 4). The SNB was active in the repo market from time to time in order to keep SARON close to the SNB policy rate. The Swiss franc repo market functioned smoothly throughout the transition, not least thanks to the state-of-the-art and reliable money market infrastructure. The SNB trades using the same infrastructure as the banks on the interbank market. This is particularly helpful as it ensures that the SNB’s operations are highly effective. Transitioning from Libor to SARON  SARON is currently establishing itself as the leading reference interest rate for financial products in Swiss francs and is replacing Libor. As you know, the UK’s financial regulator will only be supporting Libor until the end of 2021, so it is important that the transition process on the market take place now. Over the last few years, the National Working Group on Swiss Franc Reference Rates (NWG) has put forward recommendations on how to proceed with replacing Libor. Market participants must now act decisively to implement these recommendations. A SARON-based swap market is especially important for the financial markets. Swap markets are used to hedge interest rate risk (e.g.
BIS Review 95/1998  -2-  Clearly, what happens in the EU matters to Hong Kong. What therefore will be the impact of the euro on the participating countries? There should certainly be a number of economic benefits, including in particular: • a huge increase in transparency from the single currency which will make it easier to compare prices across national frontiers. This will boost competition, bring down costs and prices, and improve efficiency; • a reduction in transaction costs, in particular from the elimination of foreign exchange commissions. This will encourage trade and cross-border investment flows; • lower interest rates in individual countries from the elimination from the foreign exchange risk premium. This will reduce financing costs and stimulate investment and output; • the development of larger and more liquid debt and stock markets across the euro zone. This will create a vast new pool of capital for companies, thus giving a further stimulus to investment; • tighter fiscal discipline on the member countries under the Stability and Growth Pact and monetary discipline exercised by the new European Central Bank. Both these should ease inflationary expectations and produce a more stable financial environment for the euro zone. In summary, the single currency should be able to deliver higher economic growth and therefore increased demand for imports by the euro countries. As one of the EU’s major trading partners, this should benefit Hong Kong.

In this context, we will focus in particular on the possible repercussions of dampened growth dynamics, geopolitical developments, exchange rate and energy price developments, and the pass-through of our monetary policy measures. We will be particularly vigilant as regards the broader impact of recent oil price developments on medium-term inflation trends in the euro area. Turning to the monetary analysis, data for October 2014 support the assessment of subdued underlying growth in broad money (M3), with the annual growth rate standing at 2.5% in October, unchanged from September. Annual growth in M3 continues to be supported by its most liquid components, with the narrow monetary aggregate M1 growing at an annual rate of 6.2% in October. The annual rate of change of loans to non-financial corporations (adjusted for loan sales and securitisation) was –1.6% in October, after –1.8% in September, showing a gradual recovery from a trough of –3.2% in February. On average over recent months, net redemptions have moderated from the historically high levels recorded a year ago. Lending to non-financial corporations continues to reflect the lagged relationship with the business cycle, credit risk, credit supply factors and the ongoing adjustment of financial and non-financial sector balance sheets. The annual growth rate of loans to households (adjusted for loan sales and securitisation) was 0.6% in October, after 0.5% in September. The monetary policy measures in place and the completion of the ECB’s comprehensive assessment should support a further stabilisation of credit flows.
22, No. 1 (Winter, 2008), pp. 25–44. 13  Carol Corrado, Jonathan Haskel, Cecilia Jona-Lasinio and Massi miliano Iommi , Innovation and intangible investment in Europe, Japan, and the United States, Oxford Review of Economic Policy, Vol: 29 (Oxford, 2012), pp. 261–6. 14  Carl Frey and Michael Osborne, The Future of Employment: How susceptible are jobs to computerisation? (Oxford, September 2013). 4  BIS central bankers’ speeches  skills in logistics, (re-)programming, and routine or basic maintenance. Are our education systems ready for that challenge? Moreover, what will happen to those who are displaced by new technologies? Economic theory tells us that technological gains raise disposable income and hence create new demand somewhere in the economy. But as the literature on “hollowing out” has shown, technological advances may lead to a polarisation of jobs – at the expense of the middleskilled. 15 And this seems to be evident also in recent employment growth seen in the euro area, with the bulk of the recent employment growth seen concentrated in the lower productivity sectors. 16 So the risk is that the one effect offsets the other: technological advances in some sectors are neutralised by gains in employment in other, lower productivity ones. That might be damaging for social cohesion. This is why the second channel is crucial: across-firm productivity growth. 17 To combine productivity growth with full employment, it’s essential that labour can flow to the most productive firms, rather than being bottled up in the least productive.

But indexation, combined with a failure to anchor inflation expectations, would lessen the effectiveness of monetary policy and lead to greater fluctuations in interest rates, economic activity and employment. We are therefore convinced that allowing higher inflation rates would be the wrong lesson to draw from the crisis. Price stability, i.e. neither inflation nor deflation, is a key public good. It is a decisive factor in achieving sustainable economic growth and prosperity, and not least social stability. Switzerland has had a long and positive experience with low inflation and low nominal interest rates. The SNB is, and will remain, committed to price stability. Its monetary policy strategy gives it the necessary leeway to act decisively against both inflation and deflation. VI. Conclusion  Ladies and Gentlemen, the worst of the financial and economic crisis that erupted in summer 2007 is now behind us. But we will be dealing with the fallout for some time to come. Hopefully, the Swiss economy will return to a sustainable growth trajectory. Until then, the SNB will continue to face major challenges. The Governing Board will approach them with great respect, but also with confidence and conviction. To achieve this, we will once again need to count on the exceptional efforts of each and every SNB staff member. We thank our shareholders for their continuing support and for their interest in the activities of the SNB. BIS Review 59/2010  5