samchain/econo-pairs-v1 huggingface dataset:
Sweden – a small, open economy The situation in Sweden in recent years reflects our great dependence on the outside world; exports make up approximately 50 per cent of our GDP.2 The global financial crisis of 2008–2009 thus had a dramatic impact on us and contributed to the largest fall in GDP in Sweden since World War II. When global economic activity recovered in 2010, growth was instead the highest for 40 years (see slide 2). But this is history now. Over the last 12 months in particular, the European debt crisis has had a considerable impact on economic development. And Sweden is a part of Europe – not just geographically but economically too. A majority of our goods exports go to Europe and over 35 per cent to the euro area (see slide 3). The weak development of the Swedish economy during the fourth quarter of last year also reflects a dramatic fall in exports. Let me therefore comment on the situation in Europe, as it has such a significant impact on the Swedish economy and, by extension, monetary policy. The debt crisis in Europe – a lot of work remains to be done but things are moving in the right direction One of the most important pieces of the puzzle with regard to economic development in the period ahead is how the debt problems in Europe are managed (see slide 4).

The following are some of the attributes of an enterprise with good corporate governance:  2  BIS Review 79/2008  (i)  A well managed and coordinated company;  (ii)  Role and duties are clarified;  (iii)  Easier access to finance;  (iv)  Financial awareness and the ability to respond quickly;  (v)  Significant reduction in business risk and corporate failure; and  (vi)  Increase in monetary value of the firm. In the case of Zambia, a BoZ Microfinance Survey of 1999 highlighted that most of the MFIs were inadequately capitalised and had weak corporate governance structures. The survey also pointed out that there were about 98 MFIs operating across the country in an unregulated environment. The study further revealed that the nature of microfinance business in Zambia was generally targeted at the lower income group which have limited or no access to financial institutions offering financial services such as credit or savings. Following the study, broad consultations were held with various stakeholders, including Government, commercial banks and other financial institutions, and the general public. The purpose of the consultations was to ensure that the development of legislation relating to the microfinance sector was as comprehensive and appropriate as possible. The consultations by the Bank of Zambia were extended to various countries to obtain international best practice that could be of benefit to our local environment.
Chart 3: The sensitivity of market interest rates to news in economic data has fallen in recent years  Sensitivity of 3-year spot rates to economic data news: coefficient in regressions of change in the interest rate to change in a data surprise index prepared by Bank staff, using 12-month rolling windows. Sources: Bloomberg Finance L.P., Refinitive Datascope and Bank calculations. There could, of course, be several explanations for this. It may well be that, precisely because the economy seems less predictable than it was during the “Great Moderation”, markets are understandably more reluctant to infer things about the medium term from shorter-term data. The fact that central banks have for so long been pressed up against the lower bound would also naturally have attenuated the reaction of forward rates to news about the economy (they can’t fall as far as they usually would in response to negative news). But it’s possible that an over-reliance on central bank communication, and a misinterpretation of it as a fixed plan for interest rates, has contributed to this as well. If you believe that the monetary authority will always tell you in advance what it’s going to do you may feel less inclined to anticipate and price such a response yourself[6]. I don’t know if this is true. It’s really no more than a conjecture, and a relatively idle one at that.

Some years later, by 2012, the FOMC was indicating not only a time horizon for low rates but had added two important extra ingredients – first, the recognition that policy was “highly accommodative” and second, that it would remain so even after a fuller economic recovery had taken hold: “The Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. [It]…currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.” I suppose you could still quibble about how committed this language really is. But the clear dovish skew puts it more firmly in the Odyssean camp than the earlier statements. This is also the view of Del Negro and co-authors, in a 2015 paper looking at the effects of this guidance. [11] In any event, to my mind it’s hard to find guidance from other central banks that has come as close as this. If you squint a bit you could perhaps see some of the same in the ECB’s new strategy, published last autumn. The ECB said that, when rates were close to the lower bound, policy should respond “forcefully and persistently” and that “This may also imply a transitory period in which inflation is moderately above target”[12]. But this is about the ECB’s general strategy, not a particular path for policy. Even a “red”, discretionary policymaker would in practice recognise that the proximity of the lower bound can affect appropriate policy.
The simulated policy would probably also have prompted a significant drop in cumulative real GDP growth, estimated at about 3.3 percent. These higher interest rates would, however, only have had a limited impact on credit growth, i.e. they would theoretically have reduced a 30 percent credit growth to around 27 percent. As a result, it is not clear that the simulated policy could have significantly reduced the probability of a real estate bubble developing. Another study of  14  See, for example, Buch, Eickmeier and Prieto (2011). This study of the US market between 1997–2008 suggests that looser monetary policy or unexpected house price decreases prompt small domestic banks to increase their exposure to risk. The same conditions seemingly cause foreign banks to reduce their risk exposure, however, while large domestic banks retain the same levels. 15  Angeloni, Faia and Lo Duca (2010). 16  Bean et al. (2010). 4  BIS central bankers’ speeches  OECD countries by Katrin Assenmacher-Wesche and Stefan Gerlach,17 estimates that, to obtain a 10% decrease in property prices, central banks would have to sacrifice between 2.3 and 4.0 percentage points of real GDP growth. In turn, Christian Hott and Pierre Monnin18 estimate that house prices were overvalued by some 25 percentage points in the US in 2005 and by approximately 50 percentage points in the UK in 2006.

The work of the Basel Committee on capital and liquidity standards, as well as the work of the Financial Stability Board (FSB) on cross-border resolution, are but a few examples of the hard work that global bodies have been undertaking to address the weaknesses identified through the crisis. At the same time, national authorities have been working hard both to implement the agreedupon global fixes, but also to develop and execute appropriate remedies for problems identified at the national (or local) level. Locally, while appreciating the need to address the  BIS central bankers’ speeches  1  crisis on a global scale, many countries saw the need to be in a better position to safeguard their own. The bottom line, in fact, was: the crisis was global, but the impact was felt locally. Global in life; local in death, as the saying goes. So, while authorities have endeavored to develop and implement common global rules across a wide range of issues, many national authorities have simultaneously moved to develop and implement national standards – that may conflict with or appear at odds with a barrier-free and harmonized financial system that allows the free flow of capital and competition across the globe. National rules that require local capital and local liquidity are two examples of standards that may present challenges to the efficient and effective operations of global firms. It will be important for firms to be in a position to meet both sets of requirements.
In the digital age, households have become firms, and, in turn, producers hire the households’ services directly. Seemingly, free products and services have also emerged. All this calls for a revision of a number of assumptions behind GDP as a measure of the population’s well-being. What exactly is the digital economy is an issue still under discussion. According to the Organization for the Economic Co-operation and Development (OECD), the focus is on digital transactions, that is, those that order or deliver products using digital means. According to this definition, one important feature of digitization is the massiveness of peer-to-peer services intermediated by platforms such as Airbnb, Uber, or eBay, which facilitate transactions of goods and services. The International Monetary Fund (IMF), in turn, defines the digital economy as the use of digital information. Working groups of international experts are being convened to elaborate on these definitions and to propose a general framework for measuring the digital economy. The structural changes associated with digitization result in the emergence of new occupations and, at the same time, the decline or replacement of some jobs. Together with this, the costs of job search are falling, speeding up the process of matching demand and supply. Thus, impacts on productivity might be observed via the exchange of knowledge and the development of more efficient processes. In the financial area, digitization is redesigning the traditional payment systems, while drawing attention to concepts such as crypto-currencies and digital money.

Mario Draghi: Short address on the occasion of the launch of the Europa series € banknote Speech by Mr Mario Draghi, President of the European Central Bank, at the launch of the Europa series € banknote, Bratislava, 2 May 2013. *  *  *  I mentioned this at the end of today’s press conference, but let me say again that I’m very pleased to be here today to see the launch of the new 5 euro, the first banknote of the Europa series. The new banknote will join 15 billion euro notes already in circulation. They are the most visible and tangible symbol of European integration, used from one end of the continent to the other. With the Europa series, we are giving a face to our currency. A portrait of Europa, a figure from Greek mythology, has been incorporated into some of the security features of the new series. After centuries of division, the European Union was awarded the Nobel Peace Prize last year for its contribution to “the advancement of peace and reconciliation, democracy and human rights in Europe”. We all know that Europe is experiencing some challenging times. Governments and citizens are making extraordinary efforts to put their economies on a sounder footing and to build a more stable future for the European Union. In times like these, it’s important to remember what the Union and the euro have achieved and what they mean in the longer term, especially for young people.
Süreyya Serdengeçti: Derivatives markets - Turkish Derivatives Exchange Speech by Mr Süreyya Serdengeçti, Governor of the Central Bank of the Republic of Turkey, on the occasion of the opening of the Turkish Derivatives Exchange, İzmir, 3 February 2005. *  *  *  Ladies and Gentlemen and Distinguished Guests, It is indeed a great pleasure for me to address you today on the occasion of the opening of the Turkish Derivatives Exchange, which is the beginning of a new era for the Turkish economy. Today, I will focus on the changing process of the Turkish economy within the framework of uncertainty and risk factors. I will also talk about the development of derivatives markets within this process, including their functions in the economy and especially in monetary policy. My remarks will be based on a macro framework rather than a micro one. Dear Participants, When we look at the Turkish economy, it can clearly be seen that risk management and derivatives markets, where risk is managed, as well as the institutionalized risk management culture established in the economy have failed to reach a satisfactory level and yet are still weak both in financial and real sectors, although this had constantly been on the agenda since the 1980s. The questions that should be asked at this point are that why risk management principles could not be established in our economy in a modern sense until now and why functionality in the derivatives markets could not be achieved in the proper sense.

At the outset of this process, many people severely objected to the establishment of derivatives markets claiming that they would encourage volatility and increase speculations and manipulations on the markets. This very much reminds me of the “it is not possible in Turkey” or “it is not the right time,” comments I hear whenever we try to implement something new. The Nobel prize winning economist Milton Friedman’s speech at the opening of the foreign exchange options market at the Chicago Mercantile Exchange in Autumn 1971 contains some very important information for us2. As Friedman pointed out, financial instruments relating to foreign trade are all complementary and the British case shows that financial services may well become a very profitable export item. Within this framework, he argued that the development of a derivatives market, which is normally expected to exist in the natural evolution of markets, not in another country but in the USA is important not because it increases trade and investment here but it enables export of these services as well. Thus, he claimed that the development of derivatives markets would support the development  2  Friedman, M. (1971), “The Need for Futures Markets in Currencies”, in The Futures Market in Foreign Currencies, Prepared for the International Monetary Market of the Chicago Mercantile Exchange, Inc. pp. 6-12. BIS Review 17/2005  3  of other financial activities in the country, would bring additional income through exports in services sector and enhance the effectiveness of monetary policy.
Criteria for an Appropriate Future Interest Rate Path – A Practician’s Approach”, Staff Memo No. 2005/6, Norges Bank. Reinhart, Carmen M. and Kenneth S. Rogoff (2009), This Time is Different, Princeton University Press. Rogerson, Richard (1997), “Theory Ahead of Language in the Economics of Unemployment”, Journal of Economic Perspective 11 (Winter), pp. 73–92. Svensson, Lars E.O. (2010), “Why a lower repo-rate path?” speech held at Umeå University, 24 February 2010. Svensson, Lars E.O. (2011a), "For a better monetary policy: Focus on inflation and unemployment”, speech at Luleå University on 8 March 2011. Svensson, Lars E.O. (2011b), “Practical Monetary Policy, Examples from Sweden and the United States”, Brookings Papers on Economic Activity, Fall 2011, pp. 289–332. Svensson, Lars E.O. (2012a), “The Possible Unemployment Cost of Average Inflation below a Credible Target”, working paper, www.larseosvensson.net. Svensson, Lars E.O. (2012b), “Utmaningar för Riksbanken – penningpolitik och finansiell stabilitet,"(Challenges for the Riksbank – monetary policy and financial stability) Ekonomisk Debatt no. 5 2012, year 40, 17–29. Sveriges Riksbank (2010), “Minutes of the monetary policy meeting”, no. 3, 30 June 2010. Sveriges Riksbank (2011), The Riksbank's inquiry into risks in the Swedish housing market, www.riksbank.se. Sveriges Riksbank (2012a), “Minutes of the monetary policy meeting”, no. 3, 3 July 2012. Sveriges Riksbank (2012b), Monetary Policy Report, July 2012. Walentin, Karl, and Peter Sellin (2010), “Housing Collateral and the Monetary Transmission Mechanism”, Sveriges Riksbank Working Paper No. 239. BIS central bankers’ speeches  15

Abundant Savings in the Euro Area Current account balance (% of GDP)  10,0  10,0  7,5  7,5  5,0  5,0  2,5  2,5  0,0  0,0  -2,5  -2,5  -5,0  -5,0  -7,5  -7,5  -10,0  -10,0 2001  2003 Spain  Source : Eurostat, Banque de France  2005 France  2007 Italy  2009  2011 Germany  2013  2015  Euro area  This is why we need to foster more extensive private risk-sharing in the Eurozone, which requires a more integrated financing and investment framework. As the so-called Fratzscher report on Increasing investment in Germany puts it: “the key to a sustainable recovery in Europe lies in faster growth that must be bolstered first and foremost through a joint investment and modernization campaign “. I will come to this issue. But we also need to achieve better coordination of public policies. To that effect, we need to think through the concrete role of a euro area Finance Minister could play. 4  BIS central bankers’ speeches  II. Why we need a “full coordination” institution in the euro area, embodied by a finance minister  Clearly, monetary policy cannot be a substitute for economic policy coordination or for the lack of reforms. If only for that reason central bankers need to take part in this debate, although taking action will obviously remain a decision for political leaders.
It will be important for the central bank to develop effective monetary instruments to sterilise the monetary impact of these reforms, and support the central bank’s target for inflation. The issuance of CDs, together with the partial liberalisation of credit allocation, are all sensible and commendable steps. And I know that the central bank is actively considering additional possibilities. These measures will make for a financial system in Iran that is more efficient, liquid and transparent - and thereby more attractive to potential market entrants. Mr Chairman, economic progress in any one country is not just a question of that country’s national interest, it is - in today’s increasingly economically and financially integrated world - a matter of collective, international interest. That is true both at the macro- and at the microeconomic level - the level of individual businesses and firms. That’s why I think it is important that we encourage the forces working for reform and liberalisation by engaging constructively with them. Iran has embarked upon an ambitious, but realistically measured, programme of reform and liberalisation through the Third Five-Year Development Plan, and it is taking advantage of the present more favourable conditions in the world economy to advance that programme. I wish you, Governor Nourbakhsh, and the authorities in Iran all possible success in achieving your objectives in the interests of the Iranian people and in the interest of us all. 3  BIS Review 83/2000

Chart: From fishing to fish farming The nature of the fishing industry has also changed. The fish farming industry is one of our newest growth industries, and more than two-thirds of the supply of seafood now comes from fish farming. Through collaborative efforts in research and product development, fish farming methods have been developed to supply consumers with good-quality farmed salmon, available straight from the supermarket. But fortunately, many Norwegian consumers would say, the traditional tinned fish produced by the factory here in Lofoten for the past 100 years, is only a couple of shelves away. With rich fishing banks right outside the factory door, there is an ample supply of fresh fish. Historically, fishing in Lofoten has been an important source of income for the coastal population. The traditional fishing season at the beginning of the year still attracts fishermen from all over the country, but in numbers far lower than the up to 30 000 who used to take part. For three hectic months from mid-January each year, a variety of visitors, from fishermen and traders to watchmakers, travelling musicians and the odd snake oil salesman used to make their mark on this island community. Lofoten continues to attract visitors today – but now the fishermen’s cabins are filled with tourists. In just a few years, the number of tourist overnight stays in Nordland county has increased by 25 percent, with many visitors making the journey from faraway countries, tempted by the prospect of deep-sea fishing, sea kayaking and hiking.
Household data estimates that the Riksbank previously has presented in its Financial Stability Report show that most indebted households have good margins to cope with a loss of income or rises in interest rates in the future.1 Naturally, that does not mean that individual households could not run into problems when, for example, interest rates increase. For the banks, though, it means that credit risk in the household sector as a whole is low. Past experience also shows that the household sector seldom causes the banks to incur large loan losses. Not even during the deep crisis at the start of the 1990s, when house prices fell steeply, were losses on loans to the household sector a significant share of banks’ total loan losses. From the point of view of monetary policy, the consequences of rising house prices and high debt levels are partly different. House prices influence, via wealth effects, households’ decisions regarding saving and consumption and thereby also demand in the economy overall. For indebted households, the scope for consumption is also affected if the share of their income used for interest payments changes. This is something we have to take account of when forecasting economic growth and inflation. If interest rates rise, interest expenditure as a share of disposable incomes will increase, which tends to dampen consumption demand. That is exactly what you want to achieve if monetary policy is tightened. What happens to house prices is more uncertain.

In historical terms, households’ interest costs are currently very low. That the low interest rates have increased households’ ability to take on bigger loans is one cause of the upturn in house prices. During the summer and autumn, the rate of increase in house prices appears to have been dampened somewhat in certain areas, but the rate of increase is still high. Monthly data show that the annual rate of growth for the whole country during the period July to September was 10 per cent. The developments in Sweden are by no means exceptional. Internationally, there are examples of countries which have seen sharper rises in house prices, such as Australia and the UK. But there are also examples of countries where the rate of increase has been lower, such as Germany. Recently, however, the international situation has become more mixed in that house price inflation in some countries, e.g. Australia and the UK, has slackened considerably whereas in others, including the US, it has continued to pick up. In Australia and the UK, the rate of house price increases dropped when the central banks there raised key interest rates, although this occurred with a slight lag in Australia. In the US, the rate of increase has continued upwards in spite of rises in nominal short-term market interest rates. Longer-term rates, however, have not risen to the same extent since the Federal Funds rate began to be raised.