samchain/econo-pairs-v1 huggingface dataset:
In the March Monetary Policy Report, we projected a pronounced rebound in activity in the Norwegian economy in the second half of 2021 as a large proportion of the population is vaccinated, and a continued upswing into 2022. Unemployment was projected to fall in pace with the rise in activity. At the same time, inflation was expected to moderate ahead, to somewhat below the inflation target, before moving up again. We projected that house price inflation would be dampened as a result of a gradual rise in lending rates, a normalisation of household consumption patterns and an increase in residential construction. With regard to fiscal policy, we have assumed that public spending – in line with the fiscal rule – would be reduced as and when the situation permits. Conclusion Let me conclude. When I was here last year, the economic outlook was gloomy. We had just set the policy rate lower than it had ever been, and we were highly uncertain about what lay ahead. Since then, we have been through several waves of higher infection rates and strict containment measures. Nevertheless, economic activity has rebounded strongly from the trough in spring 2020, and many of those who became unemployed have fortunately re-entered the workforce. We are now pleased to note that infection rates are heading downward and that the reopening of society is underway. There is still uncertainty about the road ahead, but we can see the light at the end of the tunnel. Thank you for your attention.

Unemployment rose to very high levels. The stringent containment measures led to a sharp decline in private consumption. There was also a shift away from services and towards goods consumption. Travel plans had to be put on hold, and much of the cultural sector was shut down. The pandemic and the measures to contain it also dampened the willingness and ability of mainland firms to invest. Petroleum investment fell on the back of lower oil prices and greater uncertainty. Reduced travel resulted in a fall in both exports and imports. After the decline in March and April, economic activity picked up towards summer, and the recovery continued through Q3. Unemployment declined. Through autumn, infection rates increased in Norway, and new containment measures were introduced. Activity slowed in the first months of this year, and in March and April we saw a renewed rise in the number of furloughed workers. Recently, infection rates have fallen. A gradual reopening of society is underway, and a large portion of the adult population in Norway will likely be vaccinated by the end of summer. This suggests that economic activity will pick up through 2021. Following a rise over the past three years, wage growth slowed again slightly in 2020. The moderation in wage growth must be viewed in the light of a sharp rise in unemployment caused by the Covid-19 outbreak and a marked decline in business sector profitability. Inflation has varied quite markedly over the past year.
The main stylized facts revealed by this analysis (Table 3) of Chile’s labor force show an increase in the participation of women and a reduction in that of the youth, which is consistent with the increased coverage of college education for the new generations. Also, human capital has grown significantly, but lags behind developed countries in terms of coverage and especially quality. The return on the  7  working experience of Chilean workers is low by international standards, with marked differences across individuals with different levels of education. About the characteristics of the labor market, we observe that although informal work has decreased in Chile it is still high (around 30% of total employment), well above the standards of developed countries. At the same time, our labor market is very dynamic, with a high turnover relative to other countries and with a significant incidence of fixed-term jobs. Meanwhile, salaried employment is increasingly concentrated in big companies. Real wages have grown strongly for all income levels, but high dispersion persists. The wage differences are correlated with differences in the duration of employment (turnover). Finally, the aggregate unemployment rate shows a downward trend, partly due to the fall in the relative participation of younger workers, and the hours worked have fallen systematically during the last twenty years. Regarding female employment, the data confirm that women receive a lower pay for the work than men, even controlling for such characteristics like education, specific occupation and expertise.

Ball, L. and N. Sheridan (2005), “Does Inflation Targeting Matter?” in B. Bernanke and M. Woodford (eds. ), The Inflation-Targeting Debate, University of Chicago Press. Blanchard, O. and J. Gali (2007), “The Macroeconomic Effects of Oil Price Shocks: Why are the 2000s so different from the 1970s?” Working Paper Series N°13368, NBER. Blanchard, O. and J. Simon (2001), “The Long and Large Decline in US Output Volatility,” Brookings Papers on Economic Activity, (1) pp. 135-164. Bernanke, B. (2004), “The Great Moderation”, remarks by the Governor at the meetings of the Eastern Economic Association, Washington, DC. Betancour, C., J. De Gregorio and J. Medina (2008), “The Great Moderation and the Monetary Transmission Mechanism in Chile,” BIS Papers No. 35, Bank of International Settlements, pp. 159-178. Cavallo, E. (2007), “Output Volatility and Openness to Trade: A Reassessment”, Working Paper No.604, Inter-American Development Bank. Cecchetti, S., A. Flores-Lagunes, and S. Krause (2005), “Sources of Changes in the Volatility of Real Growth,” in C. Kent and D. Norman (eds. ), The Changing Nature of the Business Cycle, Proceedings of a Conference held at the H. C. Coombs Centre for Financial Studies, Reserve Bank of Australia. De Gregorio, J. (2007), “Defining Inflation Targets, the Policy Horizon and the OutputInflation Tradeoff,” Working Paper N°415, Central Bank of Chile. De Gregorio, J., O. Landerretche and C. Neilson (2007), “Another Pass-Through Bites the Dust? Oil Prices and Inflation,” Economía, Volume 7, Number 2, Spring, pp. 155-196.
But the pattern is again uneven, with the largest gains in London (47%) and the South-East (25%), whereas in Wales the gains are smaller (8%) and in the North East there has been a small fall in wealth. With  9  6  In other words, this is a standard “Benthamite” (Bentham (1789)) social welfare function of the form : 𝑆𝑆𝑆𝑆 = ∑𝑖𝑖 ln 𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖 where 𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖 is gross value-added for region i See, for example, Sen (1970). Other forms of social welfare function – such as those proposed by Rawls (1974) and Sen (1973) – place greater weight on those with lower initial levels of well-being. They would suggest weaker profiles for social welfare than those shown here. BIS central bankers’ speeches  wealth in the former regions already higher than in the latter, the upshot has been a widening in the regional distribution of wealth. As with income, these wealth data can be translated into a measure of social welfare. Chart 14 plots that relative to aggregate wealth since 2007. The well-being benefits from higher wealth have been roughly half as large as would have been the case had these gains been evenly distributed regionally. This evidence goes some way towards reconciling the macro data and the micro stories from my regional visits. Whose recovery? To a significant extent, those living in London and the South-East of England. (b)  Income distribution  A different lens on recovery comes from looking at how income gains are distributed across households.

This delaying effect is likely to be greatest for those spending decisions which are largest, lumpiest and most difficult to reverse. There is already some evidence of this delaying effect among companies’ lumpy decisions. Surveys conducted since the referendum, including by the Bank of England’s regional agents, suggest a significant number, perhaps even a majority, may be pausing or trimming their hiring and investment plans. A great many others are still huddled around their board tables, rethinking their strategic plans. There is no sense of slash and burn. But there is a strong sense of trim and singe. Meanwhile, among households there are signs of a significant slowing in both confidence and in the housing market, which are often inter-twined. The latest survey from the Royal Institute for Chartered Surveyors (RICS), covering the period since the referendum, showed the weakest three-month-ahead house price expectations balance since 2010 and the sharpest fall since 2004. This feels like a market braced for disappointment. And where housing leads, the economy often tends to follow. Third, counterbalancing to some degree this downdraught to domestic demand, there has been a sharp fall in the sterling exchange rate of around 9% in trade-weighted terms since the referendum. This will provide a shot in the arm to the UK’s net exports. And, through higher import prices, it will also help the process of lifting inflation back towards its 2% target, from its current level close to zero.
T1  T2  T3  T4  2004  Banking system financing  7.2  4.2  3.6  5.0  20.0  - Bank of Albania  1.9  1.9  1.9  1.9  7.5  - Commercial banks  5.3  2.3  1.7  3.1  12.5  The Bank of Albania financing is assumed to be the same throughout the four trimesters, providing thus the financing performance from commercial banks according to the demand forecasted by the government. However, the allocation of the Bank of Albania financing may undergo potential changes depending on the liquidity performance of the banking system from one trimester to the other. 3.2.3  Credit to the economy  The business needs for borrowing to support their businesses have been growing in these recent years. The same tendency is expected for 2004, too. Credit to the economy for the next year is forecasted to increase by Lek 16.5 billion. Compared to the credit balance increase in 2003, this one is nearly Lek 3.6 billion, or 28 percent higher. The credit to the economy forecast is based on its performance during the last nine months. Albeit the high-level of liquidity during this year, the credit balance increase was lower than in the previous years. In the next year, the credit balance increase in Lek is expected to keep the same rates, marking an annual increase of Lek 2 billion in absolute value.

That of course is cold comfort to the manufacturing businesses that were most affected, and to the regions - including the North West, where there is a relatively high concentration of manufacturing business. And you were severely affected last year too by the impact of Foot and Mouth Disease on agriculture and tourism. The frustrating thing for us has been that there was very little that we at the Bank could do through monetary policy - or indeed that the Government could do - to address the problems at source. That’s fairly obvious when we’re talking about the weakening of demand in the other major economies. Some people have suggested that we might have done more to weaken the exchange rate particularly against the generally weak euro - by cutting our interest rates more aggressively, but it really isn’t as simple as that: exchange rates don’t respond predictably to relative interest rates certainly in the short term; if anything in recent conditions cutting them further could even have had a perverse effect. What we were able to do, given that inflation was under control, by cutting interest rates as we did last year, was to try to compensate for the external weakness by stimulating domestic demand growth here in the UK. Given the weakness of business confidence, and therefore investment, reflecting the external pressures, that meant essentially stimulating consumer demand.
In May, this realisation led to RePowerEU, a plan that set two fundamental goals: to reduce, by the end of 2022, dependence on Russian energy to one-third of its pre-war level (as a prior step towards becoming fully independent by 2030) and to raise gas storage levels to 80% of total capacity by 1 October. In addition, in July the European Commission presented a plan to reduce Europe's gas consumption by 15% next winter. The degree of compliance with the two plans is relatively high. First, Europe has partially replaced gas with other sources of energy. Second, it has increased the geographical diversification of its gas imports, with more gas coming from Qatar, the United States and Norway. It should be borne in mind that there are limitations on the replacement of gas supply sources, since a significant part of the new imports must come by sea in the form of liquefied gas, while the process of increasing current regasification capacity takes time. In addition, this supply channel faces gas market integration problems, since the main  7  Wage settlements in the euro area – excluding the most volatile elements, such as special payments – have accelerated to 2.6% (a figure similar to that in the collective agreements registered in Spain to August, with wage settlements in the newly signed collective agreements of 2.9%). A further rise is expected in 2023, although the increases currently projected would, in principle, be moderate once trend productivity growth is taken into account.

In addition to the rising cost of bank loans, credit standards for approving loans to households and firms tightened across the board in 2022 Q2, according to the latest edition of the Bank Lending Survey. Looking ahead to Q3, in June banks expected a further contraction in the supply of credit, especially in the case of financing to SMEs. The tightening of financial conditions could increase the financial pressure borne by some firms. Short-term and floating-rate loans make up an important part of corporate bank financing, and the increase in market interest rates therefore passes through relatively swiftly to the average cost of debt. For Spain, it is estimated that, given the increase in market rates, the median indebted firm’s ratio of financial costs to profits before interest will rise by between 2.5 pp and 5.6 pp in the short term, depending on the percentage of debt and loans that are refinanced in the short term. In the case of households, it is estimated that the proportion that have a high net interest burden will rise by nearly 4 pp in Spain. This effect would be more pronounced among indebted households between the 20th and 40th percentiles of the income distribution. Meanwhile, the steep rise in the public debt-to-GDP ratio seen since 2007 also means that public finances are more sensitive to interest rate movements.
London’s position has developed gradually and the statistics rarely separate the group of wholesale financial markets and supporting legal, accounting and other services that make London special from a broader group including retail banking and insurance and business services. But there is some evidence that all three factors are at work. The story seems clearest with the specific factors of production. The cost of commercial property in London, for example, has grown rapidly. According to Jones Lang Lasalle Research, in the City average capital values are over $ per sq.m, above both Paris and New York. And the costs in the West End, the main home of the new hedge fund industry, are almost twice as high. There is no doubt that the success of London’s financial centre is helping to fuel demand for office space from Canary Wharf to Mayfair. And of course it is not just commercial property in London that has been booming. House price inflation in London has outstripped the rest of the UK (Chart 1), and in Kensington and Chelsea average house prices have risen by almost 40% since the start of 2005, compared with 20% for Greater London as a whole. ECA International published a survey comparing average monthly rents for a 70-square metre unfurnished flat in the largest cities and showed London over € 2,100, compared with New York around € 1,750 and Paris below € 1,500.

That will tend to reinforce the trends of recent years with: •  a continuing shift of resources into the financial markets and into London itself,  •  a continuing pressure for higher rents and rewards for those with the right combination of talent and experience, but also  •  a strong cycle in profits, pay and employment. 4  E George, "Before the Millennium: From the City of London", 7 December 1999. 5  Even for a footballer, being at your peak at the right time and place is critical to earnings. But with football like athletics, it is obvious that the best have outstanding talent. It is harder to believe the all the high earners in the City are intrinsically more intelligent or determined than others whether in universities, hospitals or factories. But the demand for the best paid reflects not just talent but experience. There may be many people who could run a trading floor given the right training but there are inevitably only a few who can demonstrate current success in doing so. Experience, like status and talent, is a “positional good”. BIS Review 73/2007  3  Implications for economic policy That leads straight on to the first implication for policy makers. As London strengthens its position in financial markets, the cycle in international finance will have direct effects not just through the shifts in interest rates and asset prices but through jobs and pay in an important sector of the London economy.
This reflects first that unlimited liquidity facilities provide banks with a buffer against liquidity shocks and thereby contribute to financial stability. Second, it however also reflects the need for sound credit risk management by the central bank, which argues against unsecured lending, in particular at overnight and longer maturities. This framework – of unlimited access to intraday and overnight central bank credit against eligible collateral – implies that collateral availability becomes the ultimate liquidity issue for banks. As long as banks have sufficient eligible collateral for overnight or intraday credit, they have a buffer against liquidity shocks. Once a liquidity shock exceeds the eligible collateral, a major liquidity issue arises, and the bank may fail to fulfil its payment obligations, with all the serious consequences that this has for the bank itself and, via knock-on effects, potentially for the entire financial system. This is what makes collateral availability so important today as a contribution by central banks to financial stability – again, both intraday, i.e. for payment purposes, and for overnight credit. Let me now turn briefly to the recent financial market developments, which involved, as you know, partially a shortage of credit, but eventually also a significant drying-up of liquidity. It was not a failure of the payment system, as all payment systems worked smoothly. Nevertheless, let me say a few words here.

If you are the treasurer of a bank and plan for the end-of-day settlement of your accounts, uncertainty about whether expected incoming payments will actually be received is obviously a major issue. It does not make an immediate difference if expected incoming payments are at risk for payment system reasons, or because the payments may not have been initiated. In both cases, the treasurer will need to look for alternative funding, and if there are no internal buffers, will turn to the interbank market for overnight funds. There, the treasurer will be ready to pay a premium and will thus bid up rates. If uncertainty about incoming payments generally increases and affects all banks, be it for payment system or other reasons, banks will all tend to enter the interbank market on the buy side and will bid up the overnight rate accordingly. This is a monetary policy issue and will imply the need for the central bank to inject excess reserves into the system to bring interest rates down again. While payment system disruption may hence potentially have an impact on monetary policy, central banks have found ways of safeguarding price stability, while at the same time ensuring the smooth functioning of the payment system. This is achieved by drawing a clear line between providing intraday liquidity for payment system purposes and providing credit for monetary policy implementation. Let me therefore turn briefly to these two types of liquidity provision by central banks.
We are seeing the benefits of being open to new ideas, open to new entrants and open to developing our own capabilities at the Bank of England. These developments hold the promise of integrating new firms and new consumers, such as the SMEs we believe could benefit from greater and safer access to finance. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  International  However, I want to turn now to an area where in my view we have seen less cause for optimism. At the international level, we have not yet seen the same benefits of growing openness and markets that are more integrated. In her incoming speech, IMF Managing Director Georgieva pointed out that fissures were emerging across the international economic and financial system, including in financial technology.3  Take payments - the last decade has seen a transformation in the global payments landscape, with users now finding it easier to pay for goods than ever before. However, the underlying technology varies dramatically by region. Today we use contactless cards in the UK, mobile money in Africa, e-money in China and UPI in India. These differences mean we will have to work harder to find solutions to the system of cross-border payments as our systems are not naturally interoperable. What can we, as policy makers and private sector participants, do to ease this trend? To conclude let me suggest two priorities. The first priority is simple – talk to and learn from each other, as we are doing here today.

In particular, I will stress the importance of three dimensions of openness: o  Being open to new ideas;  o  Being open to new businesses entering financial services; and  o  Being open to improving our own operations. “New Economy, New Finance, New Bank”, available online at https://www.bankofengland.co.uk//media/boe/files/report/2019/response-to-the-future-of-finance-report.pdf. 1  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Openness to New Ideas  Being open to new ideas and new ways of doing things is crucial for innovation. New approaches can improve the quality and inclusiveness of the financial services our people receive. However, this openness should not compromise our existing standards. Instead, we must weigh potential benefits to efficiency and resilience, against potential risks to financial stability. Let me give an example from our work in the U.K on machine learning that clarifies our approach. New general purpose technologies like AI and machine learning hold the promise of increasing economic productivity and providing better products across the economy, including in financial services. However, if not overseen appropriately, this technology could introduce new risks and enhance existing ones. The challenges posed by AI/ML are well documented - I will not dwell on them here. AI raises a range of ethical, operational, consumer protection, and competition issues. What is more, these issues are not theoretical. We have already seen the potential for new financial risks from technology during flash crashes in algorithmic trading, reminding us of the potential for introducing new instability.