samchain/econo-pairs-v1 huggingface dataset:
However, we can talk in terms of a radical change in the Swedish economy in one important respect with regard to the relationship between growth and inflation. Inflation expectations in Sweden seem to have stabilised around 2%, which indicates that the target for price stability has attained high credibility. During the 1970s and 1980s, inflation amounted to 8% on average. This means that wage-earners, landlords, central and local government and entrepreneurs now calculate with quite different nominal price increases than previously in their budgets and their pricing decisions. However, this is not an expression of a new economy but rather indicates a return to the conditions that existed in the first two decades after the Second World War. Developments during the Korean War clearly show the importance of low inflation expectations for the development of the economy. The well-based expectations made it possible to restore the economy to a rate of inflation of 3% a year after inflation had risen to 20%. The return to low inflation could take place without any dramatic restraint and without mass unemployment. Comparisons between this year’s wage development and wage development during the previous high inflation period are a strong illustration that high nominal wage increases do not have a positive correlation with real wage increases. While real wage increases this year are expected to total around 3%, wage earners have periodically experienced reductions in real wages in the period 1975 to 1995 and on average only slightly over a half per cent increase.

We proceed from the fact that the global economy will be bouncing back faster than we expected in February. This will be driven by a large-scale fiscal stimulus in advanced economies and the mass vaccination of people worldwide. The growth of the global economy will boost the demand for Russian exports. Taking into account this factor and the slower recovery of oil production under the OPEC+ agreements, we have raised our forecast for oil prices from 50 to 60 US dollars per barrel this year and to 55 US dollars per barrel next year. The forecast for 2023 remains unchanged at 50 US dollars per barrel. Accordingly, we have also increased the forecasts for exports and the trade surplus. As domestic demand has been expanding, we have revised the imports forecast upwards. The current account surplus will grow to 56 billion US dollars this year from 34 billion US dollars last year. Now, I would like to discuss in detail risks that are beyond our baseline forecast. Proinflationary risks are primarily associated with increased inflation expectations. As inflationary pressure is stronger and supply-side factors exert additional influence on price growth, inflation expectations may stay elevated for longer time. Consequently, the saving ratio may decline faster, with consumer activity rising above expectations. As always, there are risks related to the external sector, including changes in the geopolitical environment. We have always taken them into account.
There are limits to the size and extent of the shocks that the private sector can manage, at least in the short run, without official assistance. 16. Looking ahead, to minimise the need for government intervention aimed at heading off market failures induced by large and volatile capital flows, we need to build bigger markets and to strengthen the markets we already have. The challenge here – in an age when grandiose government schemes are no longer palatable or feasible – is to find ways of doing this without too much government, including regulatory, involvement. Among the more significant developments in the international efforts to deal with this issue are codes of practice, rather than regulatory impositions, and the promotion of transparency. Increasingly, the focus is not so much on architecture – building something grand and visible to replace the now defunct Bretton Woods system – but on infrastructure: laying down the connections and making sure they work properly rather than building walls and barriers. I shall say more about this in a few minutes. 17. A crucial element in the management of international capital flows is, of course, the question of exchange rate systems, which were a special target of large speculators looking for short-term profit opportunities during the Asian financial crisis. Where there is an exchange rate target against which bets can be laid, the pressures that build up can be quite formidable.

Yves Mersch: Medium to long-term priorities of Capital Markets Union (CMU) for the ECB/Eurosystem Panel remarks by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Eurofi conference, Luxembourg, 10 September 2015. *  *  *  While the Green Paper has set the right overall objectives of CMU and identified priorities for early action and the measures for the medium- to long-term, CMU needs to be pursued through a higher level of ambition to achieve greater capital markets development and deeper financial integration. 1. To bring about its expected benefits, the CMU should foster and result in a high level of financial integration in capital markets across the EU based on an adequate legal and regulatory framework. This would imply more steps towards greater harmonization of 1.  bankruptcy law,  2.  company law and  3.  taxation of financial products  that pose great political challenges. The aim is to ensure that investors have the same costs and equal access to finance irrespective of where they are located in the EU. Ultimately, the supervisory architecture will also warrant revision. The final destination in the path towards CMU will need to include the development of a single rulebook. These elements are key if we are to attain what has been ambitiously coined as CMU. 2. A schedule with clear milestones and deadlines in the upcoming action plan would facilitate implementation. 3. Market-led initiatives to promote capital markets are important but insufficient.
This year’s Current Account deficit will match the March forecast, because the higher copper price compensates for the expansion of domestic expenditure. All in all, between 2020 and 2021, the Current Account balance will turn negative, reflecting the increase in domestic demand. Compared to March, during the three-year period 2021-2023, the world economy will see slightly higher growth rates and the average annual copper price will be 20 to 30 cents above the downsloping trend projected in March. In addition to the recent rise, this correction responds to the higher long-term copper price, which is increased to USD 3.3 per pound, from USD 2.7 previously. Despite the oil price hike over the projection horizon, the terms of trade are, on average, 4 percent higher than we estimated in March (Table 2). The better actual and expected performance of GDP this year leads to an earlier closing of the output gap than anticipated in the March central scenario. This considers that the strong growth in domestic demand, associated with consumption, will boost effective GDP in the short term. Because of this, and despite the second-quarter pullback and the upward correction to potential GDP (which I will touch upon in a few moments), the gap will close during the third quarter of this year, turning positive for a few quarters. It will then fall in 2022 in line with the reduction of stimulus to private spending, oscillating around zero until the end of 2023 (Figure 16).

Actually, in the last year, local uncertainty indicators have consistently outweighed those of economies such as the United States or the United Kingdom, as the decline to their pre-pandemic levels has taken longer. This trajectory clearly differs from what used to be the case before the social outbreak, when the level of uncertainty was not only much lower, but also more in line with other countries (Figure 7). The Chilean financial market has reacted to the overall local developments by decoupling itself from global trends. Thus, long-term interest rates have increased by 30 basis points since mid-April to date (BCP10), while their external benchmarks have not changed much. This has been accompanied by a stock market drop of just over 10 percent, a 2 percent depreciation of the Peso and an increase in the sovereign premium (CDS) of 15 basis points, all despite the significant rise in the copper price. This has coincided with a period of heightened political tensions surrounding the third pension savings withdrawal and a wide range of legislative initiatives on fiscal and regulatory matters (Figure 8). On the external front, world growth has been consolidating the positive outlook for this year and next, which has been internalized by the global financial markets. The evolution of the external scenario is closely linked to the progress of vaccinations and business reopening in developed countries, which has resulted in a rebound and strengthening of consumer and business confidence and activity in the lagging sectors (Figure 9).
So I want to give you some concrete, practical proposals for change. And I want to tell you not only that these should be delivered but that they will be delivered. Individually, none of these reforms may sound like a game-changer. A number lack the pizzazz of a “tar and feathers” strategy. But taken together, I think they amount to the most radical agenda of financial reform for 80 years. Importantly, I also think they will work. First, and perhaps foremost, culture. We are about to undertake structural reform of the global banking system, perhaps the largest since the 1930s. In the US, this is the Volcker rule. In the UK, it is the Vickers proposals. Most recently in Europe, we have had the Liikanen plans. Though different in name, these structural reform proposals contain a common thread. They will seek a separation – or at least a ring-fencing of retail and investment banking activities, legally, financially and operationally. Part of their motivation is to stop some of the riskier parts of investment banking, such as proprietary trading, infecting the indispensible parts, such as deposit-taking and loan-making. The crisis has provided ample evidence of the costs of such cross-contamination, with losses on risky trading portfolios imperilling bank depositors and borrowers. But at least as important is what such a separation might do ahead of crisis. Ahead of this time’s crisis, financial and human resources were diverted away from retail banking services and non-bank activities towards investment banking.

Andrew G Haldane: A leaf being turned Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, to Occupy Economics, “Socially useful banking”, London, 29 October 2012. *  *  *  The views are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Mark Cornelius, Paul Fisher and Varun Paul for their comments and contributions. The theme for tonight is “Socially Useful Banking”. And what better place to discuss it than tonight’s venue – the main meeting hall of The Friend’s House, traditionally the venue for the annual meeting of the Quakers. The Quaker movement famously gave us two of the UK’s largest banks, Lloyds and Barclays. Between them, these banks have almost 600 years of history. For most of that period, no-one questioned their social usefulness. They extended loans to businesses and helped families buy homes. Nationally and regionally, they were part of the social fabric. Today, that fabric is torn. As the CEOs of these two institutions have both recently said, these banks need to rediscover their social usefulness. But this is not only a question for the banks. It is a key issue for wider society too, who have after all felt the financial consequences of banks’ failings and failures. What do we want our banking system to do? And how do we create that system? This is where Occupy enter the picture.
When a robust analysis is completed, the FSB will be prepared to draw lessons from these reviews to refine the regulatory framework. Trust also requires confidence that others are alert to new risks. Initiatives to collect and share data are important – whether it be the hub built at the BIS for sharing data on the balance sheets of cross-border banks, the global aggregation of trade repository data in markets such as derivatives or repos, the global legal entity identifier, or enhanced operation of supervisory colleges and crisis management groups for systemic firms. Those are complemented by initiatives to share analysis, assessment of risks and tools to address those risks, including in shadow banking and other forms of finance. The FSB provides a platform for this. Through shared analysis, authorities can build confidence in each other’s work and trust in the policy responses being applied. This must encompass not just major institutions but also emerging markets that act as hosts to global institutions and that depend on global markets. Building trust is a precondition for openness. It can also be drawn on to regulate the global system as efficiently as possible. Even with agreed common minimum standards, there will always be differences in national approaches to regulation. Such differences can be appropriate, reflecting different stages of development and different economic structures. Efficiency in regulating global institutions and markets will require the development of approaches to defer to each other in the cross-border application of market regulations.

The mandate of the euro area’s central banks is clear on this subject and there is no reason to think that some other stray thoughts would let us deviate from our key goal. It should be stressed that the Governing Council of the European Central Bank is monitoring the economic situation very carefully and will not commit to future decisions in a form that would render the Council a prisoner of their own words. Public discussions include two extraneous arguments, based on which it has been claimed that the hands of the euro area’s central banks are tied and therefore they cannot fulfil their primary goal properly. Firstly, it has been presumed that banks’ situation in Europe is so weak that we cannot abandon the extraordinary monetary policy measures that made money supply easier for banks during the crisis. Secondly, it is claimed that until the fiscal situation of some euro area countries is not firmly under control and the new financial control mechanisms have not been implemented, central banks do not dare to focus on the threat of inflation. I do not wish to underestimate either argument. The situation in global money markets, including Europe, is not entirely risk-free yet and the leaders of Europe’s public financing are struggling to ensure that the amended fiscal framework would help avoid crises in the future. However, upon fulfilling their main goal, the euro area’s central banks are not limited by these concerns to the extent that they could or should ignore the price stability goal.
But when there’s a high degree of uncertainty about forecasts, it could be best to tend toward the more cautious end of the spectrum - because a somewhat delayed action could be preferable to running the risk of tightening when it’s not warranted. Therefore, since most forecasts of output and inflation have been off the mark for several years, it has made sense to place less weight on the forecasts than we normally have in the past. It’s true that we began tightening policy before we saw any upward inflationary trend, and in that sense we were pre-emptive, in part because we knew interest rates would have to go up to some extent regardless of whether a demand shock or a supply shock was dominating. But the tightening phase started only a little more than a year ago, even though many forecasts have predicted rising inflation for several years. Moreover, we’ve been fairly cautious in raising rates by a total of only 175 basis points. I’d like to conclude by touching briefly on the issue of central bank credibility because I believe it’s been an enabling factor in our taking a cautious approach. Over the last twenty years, the Fed has built a reasonably good reputation for containing inflation. This credibility has allowed us some flexibility to delay raising interest rates - despite many forecasts that inflation would soon rise. Without this leeway, we might have faced a jump in inflation expectations with adverse reactions in financial markets.

Going forward, we intend to maintain our credibility by continuing to keep inflation under control. 3  BIS Review 82/2000
BIS central bankers’ speeches  1  identified priority areas, achievements have not reached beyond a settlement of general agreements, but significant progress has been made. Important reforms are expected to be finalized only in the years to come. This is true. for instance for the important field of regulating and supervising the shadow banking system, in which only next year work will begin on setting the details of the respective policies. Also the necessary regulations or legislation to implement the Basel III framework – especially the strengthening of banks’ capital and liquidity standards – will start to be put in place as of January 2013. The full set of regulations will only be phased in by 2019, more than ten years after the recent financial crisis had seen its peak. The G20 leaders at the 2009 Pittsburgh meeting have warned that “a sense of normalcy should not lead to complacency”. Indeed, the first signs of a re-stabilizing global economy has withdrawn the necessary push behind the process of reforming financial regulation. While regulators have correctly adopted the view that it is more important to make regulations right and waterproof, we have to ensure that the financial sector reform is put in place in a thorough but also swift manner. 2. Reforming financial system regulations: a snapshot of the current state  Let me turn to outlining the current state of the financial sector reform and focus in particular on the new international agreement on capital and liquidity standards – known as Basel III framework.

For the year 2009, a GDP loss of about 4 percent was recorded for the OECD countries. There is possibly also a permanent depressing effect on medium-term potential output.3 Governments and central banks took unprecedented action globally in response to the perils originating from the financial market turmoil. Euro area governments, for instance, increased their deficits on average by more than 5 percentage points of GDP in 2010. This was a joint consequence of rescue packages for financial institutions, cyclical stimulus packages and operations of automatic stabilizers. In 2010, Ireland recorded a deficit of over 30 percent, resulting from a one-off support for its banking sector. Debt-to-GDP ratios in advanced economies have increased on average by about 25 percentage points since 2007. Central banks around the world expanded their balance sheets, though to different extents and with different asset-liability structures. It is clear that in our democracies, such measures taken by fiscal and monetary authorities can only be an exception. They are not at all repeatable, neither in nature nor in scale. The disasters that we witnessed in the financial system must not repeat themselves. It all leads to one conclusion: Reforms are urgent! The Basel III framework means some progress on the way towards a more sound and resilient financial system and in my view it is at the core of financial regulation. Nonetheless, to complete the G20 Action Plan, further policy actions need to be taken.
We expect to be able to demonstrate encouraging progress in a number of areas (particularly the provision of seed, start-up and early stage new capital). Closing remarks Much of the focus of today’s conference has been on high-growth, entrepreneurial firms - the gazelles. It is important also to remember the great majority of small firms that are not intent on breaking speed limits and are quite content driving in the middle lane, do not have .com in their names, but are steadily contributing to output and employment. These firms are important. Nonetheless, it is the high growth firms that will continue to remain at the leading edge of the creation of an entrepreneurial economy. Continued public and private sector support for these firms is vital. The Bank of England will seek to continue to play its part, both in maintaining macroeconomic stability and in encouraging the better financing of growing businesses. BIS Review 39/2000  4

One is the risk of lower average rates of future growth in living standards if, for example, rising deficits and debt levels are left on a path that reduces future investment and productivity growth. Another is the risk of higher volatility in financial and economic outcomes, which could also limit future growth in investment and in living standards. What are some of the things policy makers can do to mitigate the risks and challenges on the horizon? Let me begin with monetary policy. In the present context, the Fed’s most important contribution to sustaining the expansion is to preserve confidence that we will act to keep inflation and inflation expectations stable, at low levels. Preserving the credibility of our commitment to price stability is vital. It is important because price stability is critical to giving enterprises confidence to invest in the future. It is more important at a time when we are running very large external deficits, because countries investing their savings here must remain confident that their investments will not be eroded by future inflation. And it is important because confidence in our commitment to price stability affords us more flexibility to act aggressively in the event of future shocks. If the economy follows the present forecast of slightly above-trend growth, then it would be appropriate for monetary policy to continue to move the real fed funds rate higher. The pace at which we move and the distance we move will depend, of course, on how the economy performs and how the forecast evolves.