samchain/econo-pairs-v1 huggingface dataset:
Another is procedural requirements for using Norges Bank’s expertise appropriately. The Bank may, for example, have the right and a duty to issue an opinion. Finanstilsynet should in principle have to follow the advice provided by the Bank. If the advice is not followed, an explanation must be provided and made publicly available. In order to ensure a disciplined decision-making process, the relationship to the other components of economic policy must be clear. Macroprudential supervision must seek to reduce systemic risk and take monetary policy and fiscal policy as a given. The objective of monetary policy is low and stable inflation and to contribute to dampening fluctuations in output and employment. Monetary policy takes into account that pronounced movements in credit growth and house prices can feed through to inflation and output, but is not geared directly to stabilising the financial system. Conclusion Allow me to conclude. Norges Bank is no longer in search of a role. We no longer take part in corporatist processes. Norges Bank now has a less prominent role as advisor. We do not believe in economic fine-tuning, but we do have instruments that can ensure low and stable inflation over time. Macroprudential supervision is now being moulded. Norges Bank must critically evaluate the funding structures of banks that have access to our lending facilities. We must develop  16  BIS Review 154/2010  instruments that can induce banks to limit their short-term borrowing in domestic and foreign markets.

BIS Review 154/2010  7  Today’s economic policy frameworks are partly a reflection of the experiences of the 1970s and 1980s, both in other countries and in Norway. The Bretton Woods system collapsed when the US deficit-financed the Vietnam War and extensive welfare reforms, while interest rates were kept low. The gold standard had to be abandoned, inflation rose and an oil price shock was triggered. A shortfall in production and unemployment followed in its wake. Norway imported high inflation, and domestic inflation was also amplified by galloping wages and a series of krone devaluations. High inflation undermined the regulation of the credit market. We had had a low nominal interest rate for a long period – several decades – but inflation had also been moderate. From the end of the 1960s, this changed. The real interest rate became highly negative. In addition, galloping wages drove incomes into higher tax brackets, resulting in higher marginal taxation, and the after-tax real interest rate became even more negative. The regulation of credit was not able to stem the tide of credit demand that ensued. The Norwegian money market became more closely integrated with a growing Eurodollar market at that time. This was partly because oil companies had to exchange their US dollar revenues into NOK for tax payment purposes. The regulatory regime was imploding.
Inflation targeting has gradually become the standard monetary policy regime in developed economies. In Norway, the Government introduced an inflation target in 2001. The target is set at 2.5 per cent. The various components of economic policy in Norway have varying effects. This is why they have different functions: •  Monetary policy steers inflation in the medium and long term and can also contribute to smoothing swings in output and employment. •  The central government budget – growth in public expenditure – influences the krone and the size of the internationally exposed business sector in the medium term. Government expenditure and revenues must be in balance in the long term. •  Wage formation, the structure of the economy and incentives determine how well and how efficiently we utilise our labour resources and other economic resources. There is also an interaction: •  In its budget resolutions, the government authorities will attach importance to the effects of the budget on the Norwegian economy and will therefore take account of interest rate effects. In this way, they avoid a situation where growth in public expenditure and the interest rate push the economy in different directions. •  With a known monetary policy response pattern, the parties to the centralised income settlements can take interest rate effects into account when wage increases are negotiated. •  Moreover, the parties to public sector negotiations can take into account that the higher pay increases are, the fewer people that can be paid over government budgets.

By linking public investment and growth-enhancing reforms, it will help ensure a stronger and more uniform recovery across the euro area and accelerate the green and digital transitions. Euro area banking sector developments and financial stability issues The improving economic environment has contributed to a decline in near-term financial stability risks. Continued fiscal support helped the corporate sector recover from the pandemic, although the situation continues to vary across industries and firms. With corporate insolvencies remaining subdued, bank loan performance turned out to be more resilient than initially feared, although it is still too early to assess the full impact of the pandemic. Positive asset quality and financial market developments supported the return of bank profitability to pre-pandemic levels, and the ECB’s stress test results published in July showed that the euro area banking system would be resilient to adverse economic developments. Amid reduced uncertainty, the Supervisory Board of the ECB decided not to extend its systemwide recommendation on banks’ capital distributions. Instead, it returned to the previous supervisory practice of discussing capital trajectories and dividend or share buy-back plans with each bank in the context of the normal supervisory cycle. The ECB reminded banks to remain prudent when deciding on distributions and not to underestimate the risk that additional losses may later have an impact on their capital trajectories. As the economic recovery takes hold, financial vulnerabilities associated with an upswing are building up.
They estimated that there were an additional 2.4 million borrowers estimated to be in “near negative equity” where the borrower has less than 5 percent equity remaining. Declining house prices will push these near negative equity borrowers into negative equity. This increases the risk that these borrowers will default on their mortgages either out of necessity – say as the result of a job loss – or out of choice, which is called strategic default as borrowers determine that there is little economic advantage to keep paying the mortgage. Longer delays in the foreclosure process further increase the incentive for a borrower to strategically default by extending the period of time that they can live “rent free” in the house. In addition, declining house prices increase the expected losses on those mortgages that do default. Problems in housing markets can impact economic growth. Housing directly effects growth through incentives for builders to build new houses. Housing starts will likely remain depressed as long as house prices are declining. Falling house prices can also negatively impact consumption growth to the extent that homeowners increase their savings in an effort to offset declines in their housing wealth. The degree to which housing markets deteriorate over 2011 and the impact that this will have on overall growth is hard to predict with any accuracy. The most likely outcome is that the economy will continue to improve as the year progresses despite the ongoing drag from housing.

We will work hard, so that all the interested persons, whether in Albania or abroad, will be able to learn about the history of banking, money and people that have dedicated their life and work to it. I am certain that very soon the Museum of the Bank of Albania will be a place to visit the exhibition, and exchange opinions and ideas about banking and money Concluding, I would like to thank you for your participation and contribution to the conference and wish success in these two days of the conference. Thank You! 2/2  BIS central bankers' speeches
This means that resource utilisation, measured in terms of GDP, can increase or decrease without there being any simultaneous change in unemployment. Neither is it certain, after companies have decided to increase or decrease employment, that this will be reflected by changes in aggregate unemployment. As the size of the labour force also varies, for cyclical reasons among others, the level of unemployment will depend on the extent to which individuals leave, remain in or enter the labour market. … but the connection is not stable Monetary policy is forward-looking and must be based on forecasts. The practical conditions for forecasting actual unemployment are made more difficult by changes, over time, in the historical relationship between economic activity and the development of the labour market. During the financial crisis of 2008–2009, the Riksbank was surprised (as were other analysts) to see that unemployment did not increase more, considering the steep fall in  5  AKU, 2010. BIS central bankers’ speeches  3  output in the Swedish economy. The Swedish labour market coped comparatively well, both in comparison with how it is usually affected by falls in GDP and in comparison with developments in many other countries.6 The former point is illustrated by Figure 1.

Inflation forecast I shall now turn to the course of inflation and our new inflation forecast. Our inflation forecast of June 2002 (the green dash-dotted curve in the graph) shows that at that time we assumed, based on a stable three-month Libor rate of 1.25%, that inflation would gradually rise to 1.9% in the first quarter 2005. Year-on-year inflation, as measured by the national consumer price index, dropped to 0.3% in the third quarter 2002 from 0.7% in the second quarter. In October and November it rose to approximately 1%. These fluctuations are due mainly to changes in the exact points in time when data on clearance sales prices are collected. This is also the main reason why our forecast of June 2002 over-estimated the development of inflation in the third quarter 2002. Our new inflation forecast (red dashed curve) is based on the assumption that growth in the US will pick up again from the second quarter 2003 onward. The US economy is likely to achieve its growth potential stepwise until the beginning of 2004. In the EU, the upswing will take a little longer. We are not expecting a significant acceleration of growth before the end of 2003. We assume that the  BIS Review 73/2002  1  dollar/euro rate will remain at about the current level and that the oil price will be around $ per barrel.
Alan Blinder, who was Alan Greenspan’s deputy at the Federal Reserve Board, put it even more clearly. Price stability, he said, was when ordinary people stop talking and worrying about inflation. And so successful has been the pursuit of low inflation that some commentators have talked about the “death of inflation” and others have become increasingly concerned about the prospect of deflation. Tonight I want to re-examine the case for price stability, and ask the following questions. Did the benefits of low inflation promised ten years ago materialise? Is the case for price stability the same as in 1992? What does price stability mean in practice? Finally, what are the challenges for monetary policy over the next decade? 2. Ten years of the inflation target: what has it achieved? Since Britain’s departure from the Exchange Rate Mechanism in September 1992, monetary policy has been based on an explicit numerical target for the rate of inflation - now 2.5% - and a high degree of transparency and accountability. Indeed, it was in his LSE lecture that Lord Kingsdown announced that the first Inflation Report would appear in February 1993. And last week’s Report completes exactly a decade of Inflation Reports - forty assessments of the outlook for growth and inflation in the British economy. Although inflation targeting in the United Kingdom is now ten years old, the most significant institutional changes occurred five years ago.

I have discussed elsewhere (King, 2001) the potential importance of money in reducing the transactions costs of firms by reducing liquidity premia in a wide range of financial markets. There is much to learn here. (ii)  Incomplete indexation of the tax system  A second cost of anticipated inflation is the added inefficiencies that arise when an already distortionary tax system is incompletely indexed. Martin Feldstein (1999) has edited a major study of the costs of incomplete indexation which includes a detailed analysis of the tax distortions to saving, consumption and investment in several major countries, and to which the Bank of England contributed. The benefit of reducing inflation in an already low inflation environment is estimated to be lower in the UK than in some other countries because some parts of the tax system are indexed. Nevertheless, the authors estimate that a reduction in inflation by 2 percentage points would bring an annual benefit equivalent to 0.2% of GDP. That may sound small, but it is a large absolute number. Against that, the end of mortgage interest deductibility will have lowered the impact. (iii)  Front-end loading of debt burdens  A third distortion is that of front-loading of the real debt burden when debt contracts are fixed in nominal terms. Inflation reduces the amount that households borrow because it raises the cost of servicing the loan in the early years. In this way decisions on consumption and investment may be distorted.
This means that over the next 10 years, every month one to two million Chinese on average will give up their low-paid, low-productivity jobs in agriculture and take up better-paid and more productive work in other sectors. The monetary policy must take into account the impact that this process is going to have on the Chinese economy and on economies of other countries. As opposed to trade and capital, the flow of people within EU Member States was stable. The annual net migration to EU-15 remained at a level of less than 5 people per 1000 inhabitants over the past 40 years. Approximately 9% of EU population was born in other countries, whilst in the USA this figure was 12% and ca. 20% in Canada and Australia. However, following the EU enlargement, where 10 new members joined the structures, our part of the world has also seen an increase in migration, which is shown in Table 3 below. In some cases, a significant part of the domestic work force took up employment in other countries. The estimates show that, for example, ca. 5% of Lithuanians took up employment in countries that opened their labour markets for the new EU Member States following 1 May 2004. A conclusion may be drawn that opening of the low cost economies, especially of the Chinese economy, and the increasing international competition on the market of goods and services related thereto, changes the methods of setting prices by enterprises and determining wages on the labour market.

Decision-making power for monetary policy must be vested in an agency that is both independent but accountable; other macroeconomic policies must be harmonised; and structural policies must support the flexible adjustment needed to accommodate shocks. Looking at this region, I believe that the economic advantages of some form of ‘Asian Currency Unit’ are clear. But I have no illusions about the practical and political difficulties involved in creating such a structure. Moves in this direction will undoubtedly be part of a long, drawn-out process. In Europe, the process took many decades. In our own politically and economically diverse region, we have even more hurdles to overcome, so it is unrealistic to expect rapid progress. But discussion of these issues, even if only at the theoretical level, will help focus our thinking and perhaps lead to small, practical steps that can improve our individual exchange rate systems along the way. A unilateral — but asymmetric — approach to monetary union can, of course, be achieved by simply adopting the currency of another country. This has been a topical issue of late, with the dollarisation option that is being widely discussed for Argentina. Some have suggested that this might also be an option for Hong Kong. Compared with our currency board system, it would represent an even more irrevocable link to an anchor currency — one that might well be expected to eliminate currency risk premia and speculative attacks.
In OECD countries, population growth averaged over 1 percent back in the 1950s and 1960s, but it is now running at half a percent per year, and is expected to gradually fall before dipping into negative figures by 2070.1 Slowing birth rates mean fewer consumers and fewer workers. People planning on longer retirements will tend to save more. And while this is undoubtedly good news in many respects, an abundance in the supply of savings also has a big effect on the global economic picture. When it comes to productivity, there has also been a stark step-down in growth. Rapid changes in the kinds of technology we use in our daily lives—robotic vacuum cleaners, self-driving cars, and facial recognition technology in our phones—may make this seem counterintuitive or plain wrong.2 But the data are clear. In OECD economies, growth in labor productivity—the amount produced per worker hour—has averaged a little over 1 percent per year since 2005, about half the pace seen over the prior decade. Falling R-star So what does all this mean for the future? Two things: First, slower population and productivity growth translate directly into slower trend economic growth. Second, an abundance of savings, and a decline in demand for savings resulting from slower trend growth, together lead to lower interest rates. All of these factors combined have contributed to dramatic declines in the longer-term neutral rate of interest, or rstar. While a central bank like the Fed sets short-term interest rates, r-star is a result of longer-term economic factors.

Michael C Bonello: Financing the small business sector – constraints and opportunities Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the European Federation of Ethical and Alternative Banks and Financiers Seminar, St.Julian's, 15 April 2010. *  *  *  The holding of a seminar on credit for small businesses is both appropriate and timely given the important role played by these enterprises in modern, free-market economies and the contribution they are likely to make in the recovery phase as economies emerge from recession. It is perhaps not widely known that of the almost 20 million enterprises active within the European Union (EU) in 2005, 99.8% were small and medium-sized enterprises (SMEs), defined as businesses that employ fewer than 250 persons. 1 In turn, more than nine-tenths of these were micro enterprises, with a workforce of fewer than 10. In 2005 SMEs accounted for 58% of the value added generated in the EU and 67% of all employment, compared to 55% in the US. 2 Small businesses are a major source of dynamism in the Maltese economy too. SMEs constitute the overwhelming majority of businesses, accounting for over 99% of the total and two-thirds of total employment. The vast majority are micro enterprises. These small operations act as customers of, and suppliers to, larger companies and are an essential source of entrepreneurship and innovation.
An increasing trend that will become even more important in the future are the SMEs. By 2010, it is expected that SMEs contribution to the economy will be 37%, and account for 22% of exports. Loans approved by the banking institutions and development financial institutions to SMEs have increased by 34.3% to RM63.2 billion in 2007. This trend is expected to accelerate in the future. Microfinancing is also important for micro-enterprises to accord to greater financial services and hence contribute towards balanced growth. In the recent three years, the finance and insurance sector expanded by 8.3% per annum, outpacing the growth in real GDP of about 6%. The financial sector now accounts for 11.0% of GDP, with about 140,000 people employed in the industry. Reflecting the higher skilled positions in the industry, the average salary in the industry is 2.4 times the country's per capita income and is amongst the highest in the economy. The financial sector's high demand for skilled talent thus require significant investment. As part of the strategic positioning of Malaysia to attain a developed economy status in 2020, the financial sector moving forward also has an important role as a catalyst of economic growth. Studies have shown that banks play an important role in promoting the creation of new industries as well as in generating spillover effects on other sectors of the economy.

Erdem Başçi: Latest economic outlook and macroeconomic developments in Turkey Panel speech by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at the Conference on “Policy responses to commodity price movements”, Istanbul, 7 April 2012. *  *  *  Distinguished Guests, The global economic developments observed during the last decade are influential on the commodity prices. Some of these developments were real factors directly affecting the supply and demand of these commodities. On the demand side, significant growth in demand for energy, food and raw materials of developing countries, led by China and India, became an important factor in commodity markets in recent years. Likewise, the discrepancy between the paces of recovery of developed and developing countries in the aftermath of the global crisis and the global monetary expansion are observed to have reflections on the demand for commodities. The increasing income in developing countries enjoying robust growth broadly decreases the price sensitivity of commodity demand. As a result of production capacity shortfalls of exporting countries in the short run and these countries’ reluctance to increase their production capacity, prices sometimes display excessive increases in the event of a setback in supply. On the other hand, the robust economic growth potential of developing countries implies that the demand for raw materials will continue to be strong also in the medium term. The key solution for imports-dependent countries due to having little natural resources lies in increasing the productivity in agriculture and energy sectors.