samchain/econo-pairs-v1 huggingface dataset:
In addition to this work, let me also mention a few other areas related to financial literacy where the CBC is currently actively involved. First, since 2022 the CBC has assumed a coordinating role for the Global Money Week in Cyprus, a global public-awareness campaign coordinated by the OECD annually, aiming at raising awareness among young people on the importance of strengthening financial literacy, skills, attitudes and behaviours. In fact, this conference is organised in the context of the Global Money Week in Cyprus for 2023. Also, the CBC has recently become a full member of the International Network on Financial Education (INFE) of the OECD, in which it aspires to have an active role in the Network's activities. Finally, I would like to mention that the CBC continues to devote resources on research of this topic, particularly in examining the link between financial literacy and financial stability. According to preliminary findings from the 4th wave of the Household Finance and Consumption Survey in Cyprus, financially illiterate individuals are 7-11% more likely to have late loan payments, providing evidence on the negative correlation between the level of financial literacy and financial stability risks. The analysis is still work in progress. More extensive results on the issue are expected from further analysis as well as from the new more elaborate survey on which we are collaborating with the OECD.

Measured in local labour costs, cost competitiveness has been deteriorating since 1997. For a time, profits in the exposed sector were not affected by the increase in labour costs, as the krone depreciated. However, this depreciation could not last, as it would have ignited domestic inflationary pressures. Tight labour market conditions warrant a relatively tight monetary policy. Norwegian interest rates are not very high, however, when our wage growth is compared with that of other countries. On the contrary, the recent appreciation of the krone will have a cushioning effect on inflation and thus on interest rates. Since 1998, the increase in labour costs has been between 5 and 7 per cent. This year’s wage negotiations were no exception. It now seems evident that wage growth will be significantly higher than our previous estimate of 5 per cent this year. The carry-over to next year is also substantial, especially in retail trade and the public sector. It is evident from this year’s wage negotiations that our labour market is tight. Norges Bank kept interest rates unchanged at the Executive Board meeting on Wednesday, 22 May. The Bank changed its stance on future inflation risks. The main reason was the higher-than-projected wage increases. According to the Bank’s assessment of the risks associated with the inflation outlook, the appreciation of the krone cannot fully counteract stronger wage growth, faster growth in consumption, a higher oil price and a somewhat more favourable global economic outlook.
However, experience tells us that this development often spills over into an exaggerated optimism about future economic prospects, at the same time as awareness of various risks decreases. Investors become increasingly willing to take increased risks, without receiving the compensation for  1  In practice, it is not always so easy to distinguish between a bubble and an overvaluation caused by a generally over-optimistic view of the future. For a more in-depth discussion of the term bubble and the manner in which these arise, see H. Dillén and P. Sellin, “Financial bubbles and monetary policy", Sveriges Riksbank Economic Review, 2003:3.  this that would be reasonable over the long term. The price of risk has never been as low as in the years prior to the start of the financial crisis in the summer of 2007. There are both dangerous bubbles and less dangerous bubbles. One bubble that did not have such serious consequences when it burst was the IT bubble at the start of the year 2000. While it was building up, it is true that a number of investments were made that did not turn out to be viable, and many investors watched their wealth shrink as the bubble burst. However, the macroeconomic consequences were not so major. Growth in Sweden flattened out for a few years, but never declined. The IT bubble never formed a major problem from a monetary policy point of view.

However, experience tells us that increased interest rates are seldom enough to break the trend. Optimism can be such that investors are glad to pay the extra interest costs or to accept a correspondingly lower return on assets, as they are convinced that prices will continue to rise. For example, in Sweden in 1989, the direct yield requirement on the commercial property market lay at around 4 per cent, while a risk-free five-year government bond had a return of up to 12 per cent. So the market preferred an unsecured property asset to a covered bond with a return of 8 per cent more! No monetary policy can defeat that kind of optimism. Furthermore, it could be the case that inflation is low despite the strong economic development. If this is the case, monetary policy may need to become more expansionary to attain the inflation target, which, in turn, may fuel financial imbalances. During the years preceding the current crisis, increasing globalisation resulted in a heavy dampening of import prices, which pushed inflation down and contributed to an expansionary monetary policy in many countries. Monetary policy thus fuelled the bubble, rather than counteracting it. If a crisis becomes really serious, as is the case with the present crisis, the conditions for conducting monetary policy become very difficult. The situation became exacerbated when rising risk premiums increased the interest rates affecting households and companies. Falling inflation and inflationary expectations led real interest rates to increase even more.
Of course, we do not believe that increased competition alone can explain developments in the Norwegian economy in the last couple of years. There have been many driving forces behind low inflation and developments in output. Nevertheless, the developments resulting from the model analysis are fairly consistent in qualitative terms with the picture we seem to be observing for the Norwegian economy. Inflation and the interest rate are low. Real wages have risen and consumption growth is high. Mainland investment and in particular housing investment have gradually increased substantially. The number of man-hours worked has also picked up markedly, although employment growth measured by the number of persons has been more subdued. The model can thus support an assumption that increased competition in the Norwegian economy is one of several driving forces behind low inflation. The model may also provide an indication of the appropriate monetary policy response to such disturbances. However, let me again emphasise that this model is still in the development process and that in addition to this model, we are also working on other empirically-based analyses to understand relationships in the Norwegian economy. It is important to have an abundance of tools so that we can combine different models and theories in our economic analyses. Conclusion The lesson from Kydland and Prescott was that economic policy can achieve better results if the authorities can commit themselves to a pre-established set of credible policy rules.

The solution for the efficient operation of the time-out was “on the fly” to combine the power of the FDIC to provide guarantees to liability holders of banks under the systemic risk exemption embedded in FDIC Improvement Act with two other authorities. The first was the U.S. Treasury’s new ability to provide capital from the new TARP funds, and the second was the Federal Reserve’s authority in unusual and exigent circumstances to flood the financial system with as much liquidity as it needed. In the latter case the appropriate measure of the escalation is not the actual amount of liquidity that was drawn from the Federal Reserve but the commitment to supply whatever was needed. 8 This commitment was captured succinctly in the minutes of the October 2008 FOMC meeting: “...the Committee agreed that it would take whatever steps were necessary to support the recovery of the economy.” Of course parents usually have the capacity to perform on a time-out if the initial announcement directs the child in the appropriate direction. In this case, the initial  7  The time-out of an extended bank holiday used by U.S. President Franklin D. Roosevelt in 1933 was not available. 8  Around $ trillion was drawn but the total capacity of the existing and new facilities offered by the Federal Reserve was closer to $ trillion.
The link to the dollar has meant China adopting the same monetary policy as the United States, a policy which is undoubtedly too expansionary for the domestic conditions of an emerging economy. But it has also meant that large amounts of international reserves were invested back into the US financial market, in particular in government bonds, thus affecting that market. The same phenomenon occurred among oilexporting countries, which accumulated substantial dollar reserves over this period. Looking ahead, if we want to avoid a renewed accumulation of global imbalances, systemically important countries such as China must equip themselves with their own monetary policy and must allow the exchange rate of their currency to fluctuate on the basis of relative competitiveness, avoiding the systematic accumulation of international reserves. This requires coordination at the international level. Since 2003, the G7 has exerted pressure, in particular on China, to reduce the accumulation of international reserves and to adopt a more flexible exchange rate system. Since mid-2005, China has announced the progressive decoupling of the yuan from the dollar. In the first two years, the yuan appreciated by 21.5% vis-à-vis the dollar. But the appreciation came to a halt in July 2008. The accumulation of international reserves continued, reaching around USD 2,000 billion in March this year. Now that the dollar has depreciated slightly, the problem of pegging the Chinese currency to that of the United States returns with force.

2 This line of reasoning was so widespread, propagated by the media (and not just the AngloSaxon media), that anyone making different choices was subject to criticism. The European Central Bank (ECB), which had refused to cut interest rates to the same level as the Federal Reserve, keeping them at 2% (compared with the Federal Reserve’s 1%), was for a long time the subject of criticism. 3 Not just academics, commentators and market analysts, but also Heads of State and Government were moved to call upon the ECB to ease monetary policy. It was as if the only criterion when deciding on interest rates were not the underlying economic conditions, from a medium-term perspective, but the need to act at all costs, in a single direction, in imitation of what had been done on the other side of the Atlantic. Some even called on the ECB to intervene in the exchange rate markets to establish parity between the euro and the dollar. If this had been done, the speculative bubble would have been larger and the effects of it bursting even more devastating, particularly for Europe. When the ECB decided in December 2005 to raise interest rates, it again met with a flood of criticism. Many observers thought that the decision would hinder economic recovery. 4 With hindsight, the policy followed by the ECB, with a more medium-term orientation, clearly turned out to be appropriate.
That is its lowest rate in a decade (Chart 3). 2  BIS central bankers’ speeches  •  These improvements in the labour market have also been reasonably well dispersed across the UK. Unemployment has fallen in every UK region since 2012, by at least 2 percentage points. •  Last, but by no means least, aggregate pay across the economy has begun to rise. A year ago, Mark Carney told the TUC that “Britain deserved a pay rise”. Today, I am delighted to say it has had one. Aggregate pay across the whole economy is growing at around 3% year-on-year, compared to less than 1% a year ago. •  In inflation-adjusted terms, the picture is even more heartening. Real pay is rising at over 3% year-on-year. A year ago, it was falling by around 0.4% (Chart 4). Real wages are rising at their highest rate for 8 years and, encouragingly, some of the fastest rates of real wage growth have been among the lowest paid. These developments have in large measure been driven by the recovery in the UK economy over the past few years. But let me now add some cross-currents to this fast-flowing employment stream. Many of these cross-currents will be familiar to the TUC’s membership. They pose some real challenges, economically and societally. •  Rates of unemployment still remain high among some cohorts and in some regions. Unemployment rates among those aged 18–24 is still over 13%, 8 percentage points above the national average.

I think it is fair to say that the Open University has reached its maturity as an institution under his presidency. Yet, remarkably, the momentum that has characterised the University's early years seems now to be gaining rather than slackening, with the recently announced plans for expanded services not just in Hong Kong but also on the Mainland. Professor Tam will retire with the knowledge that the Open University is in a flourishing condition and has an excellent reputation, internationally as well as locally. I join you all in wishing him health and happiness in his retirement and in wishing his successor, Professor John Leong, every success. The Linked Exchange Rate system I had originally planned to talk generally this evening about challenges in central banking. I shall certainly address this topic later on. But it occurred to me as I was preparing the talk that this week, in addition to launching Alumni Link, we also mark the anniversary of the launch of another Link, which I also participated in twenty years ago. Since that Link has again become quite topical over recent weeks, I thought you might be more interested if the focus of this talk was on the Link. Twenty years ago, almost to the day, the Hong Kong Government announced and then implemented a new policy to stabilise the Hong Kong dollar. This was at a time when the dollar had been falling in value so fast that the monetary and banking systems were in a state of crisis.
Second, public dissatisfaction with the economic status quo is forcing governments to reconsider fiscal policy, especially public spending and tax reforms that can potentially boost the economy’s productive capacity. It is in the US that the nascent rise of fiscal policy has attracted most interest. Historically, a clean sweep of Congress and the White House has led to expansionary fiscal policy. But the size of the fiscal stimulus will depend on the balance that will be struck between the ambitious spending plans of the White House and concerns about debt sustainability among House Republicans. There is considerable uncertainty over not just the size of the fiscal package but its composition. There appears to be broad consensus on reducing corporate and personal income taxes, broadening the tax base, and offering a one-time tax holiday on repatriated overseas corporate profits. But there is no clarity on the details and hence the size of the fiscal impact. On plans to increase defence and infrastructure spending, there is currently less consensus. It is also not clear how these spending increases will be financed. Besides uncertainty over the size of the fiscal stimulus, there is also uncertainty over the impact of a given stimulus on growth. This impact will depend on how much slack there is in the economy. Signs are that the US economy is close to full employment. Unemployment is at or near the natural rate and wages are increasingly healthy.

Ravi Menon: Global economic outlook - renewed optimism, higher uncertainty Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the UBS' Wealth Insights Conference, Singapore, 16 January 2017. * * * Ladies and gentlemen, good morning. The global economy in 2016 – resilient but uninspiring 2016 was an eventful year for the global economy. If you recall, we began the year with anxiety over China’s financial markets but breathed easier over the course of the year as China steadied its economy and avoided the hard landing feared by many. We saw economic momentum in the US slip, and then pick up towards the end of the year, which also saw the second rate hike by the Fed in 10 years and an unexpected presidential election outcome. The EU economy was stirred but not shaken by the shock of the Brexit vote in June, with accommodative monetary policy providing support while domestic demand gradually improved. Japan saw further innovations in monetary easing – with negative interest rates and yield curve control – with some but not decisive improvement in growth outcomes. In the ASEAN economies, growth was respectable but below potential, as a pick-up in private consumption was offset by weaker investment and exports. Overall, I would say the global economy in 2016 was resilient but uninspiring. Economic growth was sustained in the face of shocks but remains sub-par.
The fact that the central bank has a high degree of autonomy does not however mean that it is “independent” of political decisions. It is politicians who make decisions on how independent the central bank is to be. The degree of autonomy is reflected in several different conditions: how central bank executive boards are appointed, which people are appointed, what mandate they have, how the central bank’s operations are funded. The degree of autonomy can be different in different dimensions. There may also be a difference between how the autonomy manifests itself formally according to the law, and how it looks in practice. A central bank can, for example, have considerable formal autonomy when taking monetary policy decisions, whereas it may be strong dependent on political decisions for its funding. There is also a connection between the central bank’s mandate and its autonomy. The narrower the central bank’s mandate, the easier it will be for politicians to give it a higher degree of autonomy – and the easier it will be to evaluate the central bank. If the central bank has very broad, mandate, it may feel more natural for there to be a greater amount of political influence. To take two examples, among several: The Bank of England and Norges Bank both have significantly broader remits than the Riksbank, but they are less independent than the Riksbank, at least according to the legal frameworks. Central bank laws are not fixed for time eternal.

With reference to the question above, I can tell you that there have been several reasons to begin with these three countries, but the main reason for which we compare today the present situation in Sweden, Turkey and Romania is due to the diligent and assiduous activity of the Ambassadors of these two countries in Bucharest. Then, I would like to salute their presence here today: His Excellency Mr. Anders Bengtcén, Ambassador of the Kingdom of Sweden, and His Excellency Mr. Ömür Şölendil, Ambassador of the Republic of Turkey and to particularly extend my gratitude to them and to all the persons involved in the materialization of this conference. I also thank Mr. Klas Eklund, Senior Economist at the Swedish Bank SEB and Adjunct Professor of Economics at the Lund University and Mr. Çağri Memişoğlu, Deputy General Manager at Garanti Bank Romania. There are, of course, historical links between the three countries. I do take this opportunity to highlight a few of them. With the Republic of Turkey one could go back to the proclamation of the new state as a republic, last century, and even more, centuries of ties between the Romanian Principalities and the Ottoman Empire. I also like to notice the connection between our two central banks. In the National Bank of Romania’s archives there are letters, exchanged between Governor Mitiță Constantinescu and Governor Salâhattin Çam, regarding the organization of a conference for the governors of the central banks in the Balkanic Coalition, in November 1937, in Ankara.
What matters is not just sound economic policy, but effective leadership, a collective response from the people, social cohesion and political will, to see difficult changes through and make them work. Economic reforms around the world Japan Japan is my first example of an economy transforming itself fundamentally. For two and a half centuries up to the middle of the 19th century, Japan was ruled by the Tokugawa Shogunate. It was inward-looking and insular. The Tokugawas only allowed coastal vessels that could not make ocean voyages. Foreigners landing on Japanese soil, even if by accident, faced severe punishment. But in 1853 Commodore Perry arrived in Tokyo Bay with a quarter of the US navy - the "Black Ships". This demonstration of US military supremacy forced Japan to open itself up to foreign trade and influence. BIS Review 19/2003  1  Behind its closed doors, Japan had fallen behind the West. It became clear that the Tokugawa regime was not able to lead the country into the new era. So in 1867 a group of young samurais led a coup to overthrow the Shogunate. They restored the Meiji Emperor, and ruled Japan in his name. The reformers were determined to make Japan a strong country again. They made a decisive break from feudalism and set about systematically modernising the country. Their strategy was to learn from the West and set Japan on the path of industrialisation. They succeeded brilliantly. Within 40 years, the Japanese Navy defeated the Russian fleet in battle (1904-1905).

These trends however saw the start of the erosion of the linkage between finance and the real economy, sowing the seeds of financial activity that would become inherently unsustainable. In several parts of the world, finance progressively deviated from long-term value creation towards the pursuit of short-term returns. Banks’ trading and fee-generating activities became much more lucrative than traditional lending activities. This in turn spurred innovation in financial services that became more and more removed from the service to society and the economy. During the period just prior to the global financial crisis, domestic credit provided by the financial sectors such as in Iceland and the US, which had previously averaged 48% and 149% of GDP respectively, had become decisively decoupled from, and had far outstripped real economic activity. Domestic credit by the financial sectors in Iceland and the US had by 2007, risen sharply to 299% and 236% of GDP respectively. The experience of the global financial crisis highlights the potential for the benefits of finance to be dramatically reversed, resulting in destructive rather than constructive effects of finance. Several studies have shown that the marginal returns to growth from finance diminish at high levels of financial development. In other words, there can be “too much finance” where the costs to growth and stability outweigh the benefits of financial development. Similar to other booming industries, the financial sector at the height of its exuberance showed an overinvestment of resources in terms of capital including human capital which only became apparent after the bust.