samchain/econo-pairs-v1 huggingface dataset:
As has been discussed before by many of my MPC colleagues (see, for example, Bean (2011), Broadbent (2011), Fisher (2013)), to not have done so would have meant presiding over an even deeper recession and an even greater rise in unemployment. Rather than a constraint as some claimed, the inflation target and the credibility it afforded were essential in allowing the MPC to respond as forcefully as we did. The much vaunted flexibility offered by inflation targeting frameworks – to set policy in such a way that mitigates damaging booms and busts in activity as well as controlling inflation – can be exercised only if policymakers’ commitment to their target remains credible. Without credibility, there can be no flexibility. The experience of the UK economy over the past 5 years has provided a real-time examination as to how long inflation can remain above an explicit policy target without the credibility of that target being undermined. Thus far, the UK’s inflation target has passed this test with flying colours. And, in so doing, it has enabled the MPC to provide vital support to our economy. But although inflation targeting scored highly against its primary objective – anchoring people’s inflation expectations – there was, as my teachers used to say, some room for improvement. For me it was speling. For inflation targeting, at least as operated in the UK, it was in addressing some of the communications challenges posed by the sustained period of weak demand and elevated inflation.

29 Hancock and Passmore (2015) estimate the impact of the purchase of a 1 percent market share of the agency  MBS and U.S. Treasury markets to be 2.0 basis points and 2.5 basis points, respectively. At current market sizes, these estimates suggest that $ billion of agency MBS purchases or $ billion in U.S. Treasury purchases would lower agency MBS yields by 1 basis point. 30 The Desk conducts small-value exercises from time to time as a matter of prudent advance planning. They do  not represent a change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future. These exercises include outright sales of agency MBS and coupon swaps of unsettled agency MBS holdings. The most recent coupon swap small-value exercise occurred in October 2016, and the most recent agency MBS sales small-value exercise occurred in late Mayearly June 2016. 31 One example of an agency MBS sales program is the U.S. Treasury’s decision to liquidate its $ billion  agency MBS portfolio in 2011 through a combination of about $ billion per month in sales and ongoing principal paydowns. The Treasury announced on March 21, 2011, that it would wind down this portfolio 9 / 10  BIS central bankers' speeches  and sales took place between March 22, 2011, and March 13, 2012. 32 See the “Policy Normalization Principles and Plans” section of the FOMC’s Rules and Authorizations, January  2016.
Previously, the stock of notes and coins used to grow over time in line with growth in the economy, but this has not been the case in recent years. Since 2007, the demand for notes and coins has instead declined, both in relation to GDP and in absolute figures. As far as I know, we are alone in the world with regard to the latter development. It is not entirely clear why this is so, but the fact that Sweden is in the forefront with regard to the use of card payments and electronic payments has probably contributed. The value of outstanding banknotes and counts amounted to SEK 109 billion ten years ago and comprised 60 per cent of the Riksbank’s balance sheet total. At the end of 2014, the item had declined to just over SEK 83 billion and now comprises only 17 per cent of the balance sheet total. The Riksbank assesses that cash will remain a means of payment for the foreseeable future, although it will probably decline in significance.3 The replacement of the Swedish banknotes and coins that will take place between autumn 2015 and summer 2017 increases uncertainty over how much cash will be in circulation during the coming years. What does it mean for the Riksbank when the amount of cash in circulation declines? Well, when this happens the banks do not need to hold such large stocks of cash as before. Instead, they deposit the money in their accounts with the Riksbank.

In this context, early next year the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price developments. We will also evaluate the broader impact of recent oil price developments on medium-term inflation trends in the euro area. Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council remains unanimous in its commitment to using additional unconventional instruments within its mandate. This would imply altering early next year the size, pace and composition of our measures. In response to the request of the Governing Council, ECB staff and the relevant Eurosystem committees have stepped up the technical preparations for further measures, which could, if needed, be implemented in a timely manner. All of our monetary policy measures are geared towards underpinning the firm anchoring of medium to long-term inflation expectations, in line with our aim of achieving inflation rates below, but close to, 2%, and contribute to a return of inflation rates towards that level. Let me now explain our assessment in greater detail, starting with the economic analysis. Real GDP in the euro area rose by 0.2%, quarter on quarter, in the third quarter of this year. This was in line with earlier indications of a weakening in the euro area’s growth momentum, leading to a downward revision of the outlook for euro area real GDP growth in the most recent forecasts.
One may have expected that gap to close rapidly. Even today, however, only around four-fifths of small firms have a website. E-commerce is another technology that has arguably been surprisingly slow to propagate through the UK economy. In 2016, over 80% of UK individuals ordered goods or services online, more than any other OECD country. One may have expected that to have been mirrored by a large share of UK businesses selling online. In practice, the UK is only marginally above the OECD average. And between 2009 and 2016, the share of UK businesses making e-commerce sales increased by only 6pp, from 17% to 23%. 71  Swinney (2018), Giles (2018). Schneider (2018). Haldane (2017), Jacobs et al (2017), Swinney (2018), for instance. 74 OECD data. 72 73  20  All speeches are available online at www.bankofengland.co.uk/speeches  20  If the story, then, is one of diffusion dynamics being more sluggish in the UK than elsewhere, what might be done to improve matters? Institutions, and within that universities, may well have a role to play. At present, a relatively small sub-set of the UK’s universities operate as innovation hubs. They conduct world-leading research using world-leading researchers. And, in an increasing number of cases, they are doing so in tandem with businesses in spin-off science parks, acting as incubators of innovation.

Indeed, it  is evidence of the lower tail of companies with flat-lining productivity having lengthened during the crisis and by more in the UK than in competitor countries, consistent with the long tail hypothesis. Why might the UK’s long tail, and hence technological diffusion, problem be more acute than elsewhere? Several reasons have been posited and probed. 73  One interesting window on this issue is provided by  looking at the intensive and extensive diffusion margins, to see if these provide clues. Looking at a range of ICT technologies, the data suggests that high and relatively consistent levels of technological adoption, but low and variable rates of technological penetration, mimicking the international evidence. Take internet access. Almost all UK businesses – in excess of 90% – now have internet access. But the UK 74  ranks poorly compared to other OECD countries in terms of broadband penetration (Chart 9). That is true  not only for standard broadband connectivity, but also for more advanced infrastructure such as optical fibre connections. Those low rates of penetration largely reflect large/small firms differences. As with other OECD countries, broadband usage by large firms is almost 100%. But for smaller firms that falls to 93%. Similarly, the share of UK businesses with a website is above the OECD average, at around 83%. But that masks sizable large/small firm differences. Almost 100% of UK large firms use websites, which has been the case for a decade. Only two-thirds of small firms had a website in 2007.
Chart 12: Rise in unemployment among the young much larger than for older age cohorts… 16-24 35-44 55-64  25-34 45-54 65+  pp increase since 2006 8  Chart 13: … and incomes of the young fell most sharply during the recession. 16-24 35-44 55-64  25-34 45-54 65+  % change since 2006 25  7  20  6  15  5  10  4  5  3 0  2  -5  1 0  -10  -1  -15  -2 2006  2008  2010  2012  2014  Source: Labour Force Survey and Bank calculations. 2016  -20 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Family Resources Survey and Bank calculations. Income deflated by the consumption deflator. Experience shows that when the economy enters recession, the poorest are hit the hardest. During recessions the lower-skilled, lower paid people tend to lose their jobs first. xxiv  11  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  11  And recessions disproportionately affect the young (Chart 12). xxv  Graduating in a recession is generally bad  news for someone’s earnings trajectory (Chart 13). The most advantaged graduates tend, over time, to recover, but the least advantaged can be permanently affected. xxvi  In the extreme, prolonged recessions can lead to permanent labour market scarring, with potentially devastating effects on livelihoods, identities and communities.

Zeti Akhtar Aziz: Statistical science for a better tomorrow Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the International Statistical Institute Regional Statistics Conference 2014 “Statistical Science for a Better Tomorrow”, Kuala Lumpur, 18 November 2014. *  *  *  Introduction It gives me great pleasure to welcome you to this inaugural International Statistical Institute Regional Statistics Conference. This conference takes place at a time of major transformative change in our region and in the world. The contribution of statistics in this new and rapidly changing environment has become of even greater importance. In this increasingly complex world, the availability of high quality statistics is vital in facilitating decision making for both the private and public sectors. The world is also seeing greater demands for higher levels of transparency. This has become key for building trust and confidence regardless of the line and nature of business. The statistics community has responded to these changes. Immense progress has been achieved in developing the methodology for generating consistent economic and financial statistical systems. In a world that has also become more globalised, such progress has brought great benefits to businesses and policymakers in terms of the availability, comparability, and broad consistency of economic data across countries. For any economic and financial community, detailed and comprehensive data are highly important to understand the implications of the developments taking place.
Macro costs and micro benefits: The Eurozone has so far failed to make its member states wealthier quicker (the non-euro EU states are constantly growing faster on average) or to make them converge structurally. Rather, one could argue that the opposite is true. A truly strong measurable result of the euro is lower and less volatile inflation. This is hard to see as a bonus for our country, where we are consistently achieving the same objective with our own currency. The oft-mentioned bonus of lower interest rates due to the euro does not apply to us either. We have long known what it’s like to live with rates below the Eurozone level. Likewise, it’s hard to believe that the euro will deepen our trade relations with the euro countries given that we are one of the few countries enjoying not only growing trade, but also a constantly rising trade surplus with Germany. The euro has micro benefits at firm level, but unfortunately they come with the aforementioned macro costs. The latter are constantly rising and their final size and structure are impossible to quantify. Besides the known contribution to the stability funds, they include mandatory participation in the banking union, which is another unfinished structure. For a country of our type, currency arrangement and monetary history, joining the Eurozone is generally an extremely tough question. It was ever thus, but it is currently all the more so.

Trends and changes Sweden is in the forefront I said earlier that Sweden is in the forefront with regard to using other payment services than cash, and this is illustrated in this chart, which summarises the situation in a few selected countries.5 The picture that appears is that use of cash is much lower in Sweden than in most other countries and that the use of cards, primarily bank cards, is higher. The situation is roughly the same in our Nordic neighbour countries. I mentioned earlier that Sweden is a technology-friendly country. We have an extensive infrastructure for telecommunications and a high percentage of households have Internet in their homes, are familiar with technology and have smart phones and tablets. Moreover, there is a high degree of confidence and trust between households, companies, payment intermediaries and public authorities. This chart shows an aggregate of all of these factors. It is the World Economic Forum’s ranking of countries according to how well they are situated  5  If we look at cards and cash, it is unfortunately difficult to find good and comparable statistics. The information on other countries than Sweden is often a few years old, and the exact percentages should be taken with a pinch of salt. BIS central bankers’ speeches  3  with regard to utilising possibilities offered by information and communication technology. We can see that Sweden is highly placed and has been for a long time. Of course, this creates the right conditions for the payments market to develop.
Economic and financial integration among our countries Our countries have many things in common – these elements are more than sufficient to build and consolidate bridges of cooperation. Turkey is an important market for Albania and its economy. To illustrate my point: ·Turkey is Albania’s fourth trading partner and its sixth investment partner. In the services sector, Turkey is an important destination for Albanian tourists; on average around 80 thousand Albanians travel to Turkey, whereas Albania has welcomed around 69 thousand Turkish travellers in 2016 and 38 thousand travellers over the first six months of 2017. At present, 429 joint-venture companies operate in Albania and Turkish investors have a great interest in Albania. The stock of foreign direct investments from Turkey amounts to around EUR 481 million, or around 4.3% of the Gross Domestic Product at the end of the first half of the current year. These investments are mainly concentrated in areas such as: energy, metal processing, telecommunications and finance. The presence of the Turkish capital in the banking and financial sector. One of the main banks in our banking system has Turkish capital. Recently, in addition to the classical banking activity, the Turkish capital has expanded to non-bank financial institutions, thus helping deepen and develop alternative financial markets. Both our countries have great economic and financial potential, which should not be limited within their geographic territories.

An accommodative monetary policy and a strong and well capitalized banking system provided a favorable environment whereby firms and household could continue to finance the consumption and expansion to support domestic demand. The Thai economy was able to navigate through short term sell offs and the sharp reversal of capital flows. The  BIS central bankers’ speeches  1  recent turbulence in fact provided a reality check on the importance of policy consistency and the fundamentals of the economy. Monetary and financial policies in Thailand have strongly relied on prudence and pragmatism. A credible monetary policy framework helped anchor inflation expectation, thereby fostering continued growth and stability. A flexible exchange rate regime also supported the efficient allocation of resources and competitiveness of the economy. A strong external position helped cushion against sharp reversals of capital flows. One can never put a price on the comfort with which a strong international reserves position brings. Imagine if we had to raise domestic interest rates to defend the currency that is weakening because of capital outflows. All of this at a time when the global economy is weak and the domestic economy needs the support of accommodative macroeconomic policies! Financial liberalization and regulatory reform efforts under the Financial Sector Master Plan provided opportunity for Thais, particularly small-scale firms, to have better access to finance. A competitive banking system and a vibrant capital market also helped strengthen investors’ confidence through efficient resource allocation and appropriate pricing of risks.
2  BIS central bankers’ speeches  What explains this remarkable pattern of global interest rates? And what implications does it carry for monetary policy, in the UK and internationally? I want to offer some reflections on those two questions. To be clear, these views are personal ones, in my capacity as a member of the Bank’s Monetary Policy Committee (MPC), rather than necessarily representing the collective view of the MPC. The drop  Chart 5: Evolution of the UK forward curve Bank Rate March 2015 July 2014  Per cent  2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0  A significant part of the explanation for low interest rates, at least in the years Mar Jul Oct Mar Jul Nov Mar Jul Nov Mar Jul Nov immediately after the crisis, was the 2014 15 16 17 weakness of demand. Chart 6 looks at the path for UK output growth expected Sources: Bloomberg and Bank Calculations. Notes: Chart shows UK instantaneous forward OIS curves. in the MPC’s Inflation Report each February since 2009. Up until around 2012, growth significantly and repeatedly disappointed to the downside. The same was true internationally, with IMF forecasts significantly and repeatedly revised down. With recovery weaker and taking longer than expected, the expected date of interest rate rises was repeatedly put back, and the expected level of future rates was lowered, in the UK (Chart 1) and globally (Chart 2). Over the past two years, this story has subtly changed.

Between 1999 and 2006, housing debt more than doubled.3 So it’s not so surprising that we got an anemic rebound. The financial crisis unleashed powerful forces that have damped spending and sapped the recovery of its vigor. I’ll mention three. First, it destroyed a huge amount of household wealth. Second, it flattened the housing market. Third, it made it hard for businesses and households to get credit. Let’s look at each of these. First, when house prices collapsed, the wealth of American households plunged by about six-and-a-half trillion dollars. That equals more than 40 percent of the total size of the U.S. economy. Many people went from feeling rich to feeling poor, with neither the means nor the will to spend. Instead, they became intent on repairing their finances by increasing their saving and trimming their debt. In other words, they deleveraged. During the recession, the household saving rate climbed to about 6 percent of income from about 1 percent. It’s still about 4-1/2 percent. In the long run, higher saving is healthy. But, in the near term, it puts a brake on spending and slows growth. Second, the depressed housing market has been a drag on growth. Home construction plays an important role in the economy, of course. When you add in items that often go with a new home – things such as furniture, carpets, and appliances – you’re talking about a significant fraction of overall economic activity.4 Today, there are still millions of homes in foreclosure, and millions more on the verge.
First, the government has set a net-zero emissions target by 2050, in line with developed economies globally. We are also integrating sustainability into our Exchange Fund investments and banking system. And the HKMA is co-operating with other regulators to green our financial system by setting supervisory expectations, encouraging climate disclosure, and building industry capacity. In fact, Hong Kong is the first Asian jurisdiction that has committed to comply with the recommendations of the Task Force on Climate-related Financial Disclosures by 2025. 39. We are also pioneers with our dedicated government green bond programme. Last month, we returned to the international market with a 2.5 billion US dollar deal, attracting an overwhelmingly positive response from global investors. To build on this momentum, the Financial Secretary just announced in his latest Budget that the government will double the size of the green bond programme and increase the diversity of future issuances. We will also provide grants to encourage more corporates to seek green and sustainable financing in Hong Kong. Both initiatives will help strengthen the fast developing green finance ecosystem in Hong Kong. 40. We are also partnering with the international community to develop green financing. Hong Kong is the founding member and first regional anchor for the Asia Chapter of the Alliance for Green Commercial Banks with the International Finance Corporation. 41. Our financial centre is also embracing the rise of investment in line with Environmental, Social and Governance – or ESG – principles.

Henceforth, the real return on the Government Petroleum Fund shall be used over the central government budget. Central government petroleum revenues shall continue to be transferred to the Government Petroleum Fund and invested abroad. Monetary policy in Norway is oriented towards low and stable inflation. Since March 2001 the inflation target is set at 2½ per cent. When monetary policy is oriented towards stabilising inflation, it also contributes to stabilising aggregate demand and output. The inflation target is the nominal anchor for the Norwegian economy. Low inflation is the objective and the interest rate is the instrument. If it appears that inflation with unchanged interest rates will be higher than 2½ per cent, the interest rate will be increased. If it appears that inflation with unchanged interest rates will be lower than 2½ per cent, the interest rate will be lowered. Low and stable inflation will be a fixed feature of economic developments. This is something that the social partners, businesses, borrowers and investors in property and securities can take as a given. From 1986, changes in the exchange rate or the prospect of changes in the exchange rate had implications for interest rates. A stable krone exchange rate was the nominal anchor. In Norway, this has been reflected in wage determination because labour cost developments among trading partner countries have been an important reference. Exchange rates between major international currencies fluctuate widely. The US dollar has appreciated by more than 30 per cent since 1995.