samchain/econo-pairs-v1 huggingface dataset:
It is also important to think hard about the supply of labor—the willingness of people to work, and the education and skills that they have to bring to the market. Labor supply is equally important, but less widely discussed than the demand side of the market. Labor force participation is lower at all ages in Puerto Rico than on the mainland. This is a crucial impediment to growth, and addressing it 3/4  BIS central bankers' speeches  requires innovative policy options. One idea to address this problem would be to extend the Earned Income Tax Credit to Puerto Rico. In addition, the structure of the Commonwealth’s tax system creates disincentives to work in the formal sector, and suggests that tax reform could produce a growth dividend as well as a more reliable source of revenue. On top of the low labor force participation is the well known and deeply concerning high level of out-migration. In addition to the lack of labor demand, it seems likely that quality-of-life concerns such as high crime rates are playing a role in these decisions. This underscores the importance of basic public service delivery and is another example of the interplay between fiscal and economic outcomes. Another important dimension of labor supply involves the skills that workers bring to the market. Many of these skills are acquired while in school. Our research indicates that test scores for school-age children on the Island are low, suggesting that there is an opportunity for improvement in the quality of public education.

38  All speeches are available online at www.bankofengland.co.uk/speeches  38  Jarrell, S B and Stanley, T D (2004), 'Declining Bias and Gender Wage Discrimination? A Meta-Regression Analysis', Journal of Human Resources, Vol. 39, No. 3, pp. 828-838. Lang, K (2007), Poverty and Discrimination, Princeton University Press. Lang, K and Lehmann, J-Y K (2012), 'Racial Discrimination in the Labor Market: Theory and Empirics', Journal of Economic Literature, Vol. 50, No. 4, pp. 959-1006. Lang, K and Manove, M (2011), 'Education and Labor Market Discrimination', American Economic Review, Vol. 101, No. 4, pp. 1467-96. Lewis, G B and Soo Oh, S (2009), 'A Major Difference? : Fields of Study and Male-Female Pay Differences in Federal Employment', The American Review of Public Administration, Vol. 39, No. 2, pp. 107-124. Longhi, S and Brynin, M (2017), 'The ethnicity pay gap', Equality and Human Rights Commission, Research Report, No. 108. Manning, A and Swaffield, J (2005), 'The gender gap in early career wage growth', CEP Discussion Papers, Centre for Economic Performance, London School of Economics. McKinsey & Company (2016), 'The power of parity: Advancing women's equality in the United Kingdom', McKinsey Global Institute, September 2016. Neal, D A (2004), 'The Measured Black-White Wage Gap among Women is Too Small', Journal of Political Economy, Vol. 112, No. S1, pp. S1-S28. Neal, D A and Johnson, W R (1996), 'The Role of Premarket Factors in Black-White Wage Differences', Journal of Political Economy, Vol. 104, No. 5, pp. 869-895.
Uncertainty has come not just from new shocks hitting the economy, most notably huge increases in energy prices, but also from unexpected developments, particularly in the labour market, as well as from other sources, like the on-going impact of Brexit and the pandemic. Economic uncertainty can be illustrated in various ways. Chart 1 shows a market-based measure of volatility two years ahead, the horizon for monetary policy, which has been on a sustained and steeply rising trend over the last year, and spiked very recently at a much higher level even than during the global financial crisis. Without wishing to downplay the audience today, the Bank-watchers who matter most for whether the MPC meets its target of getting inflation back to 2% are households and businesses. Uncertainty is impacting directly on them, undermining their confidence to make decisions and plan ahead, adding to what is already a very challenging economic situation in the face of the cost of living crisis and tightening financial conditions. In economics, the concepts of ‘risk’ and ‘uncertainty’ are usually distinguished using the terminology of Frank Knight (1921). Risk refers to cases where we know the potential outcomes and the probability of them happening. Uncertainty refers to cases where we don’t know the possible outcomes (or their probabilities) in advance. Another broad approach has been suggested by Kay and King (2020) in their book on ‘radical uncertainty’.

Jean-Pierre Roth: The current economic and monetary policy situation Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Centro di Studi Bancari, Vezia, 17 September 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  It is difficult to determine to what extent the turmoil in the US sub-prime mortgage market impacts on the real economy. It has hit Switzerland at a time when our economy is in enviably good shape. Should the situation in the financial markets not deteriorate any further, it is hard to imagine these factors abruptly slowing economic growth. With its decision to let the Libor slide back towards 2.75% in the short term, the SNB has clearly signalled to the markets an easing of the situation. In Switzerland, price stability has been maintained for the past 13 years, economic growth is significantly higher than in the 1990s and our unemployment rate is the lowest of all industrialised countries. It is our goal to preserve this favourable situation. BIS Review 102/2007  1
In Peru, the expansion of annual GDP in the first quarter was higher than in the previous year, but the continued decline in consumer and business confidence has reduced dynamism going forward. Activity projections are maintained for the other countries (Figure 9). 3  On commodities, the increase in the oil price stands out—the Brent rose to 80 dollars a barrel at some points in the second quarter—driven by geopolitical factors and changes in supply and inventory levels. The baseline scenario, in line with the market futures in the ten days prior to the statistical closing, supposes that the price will decline slowly with respect to its current levels. Thus, Brent and WTI will average 70 dollars per barrel in 2018, 68 dollars in 2019 and 64 dollars in 2020. This contrasts with prices of 63, 59 and 56 dollars that were considered for the same years last March. As for copper, the average price estimates for 2018, 2019 and 2020 are practically unchanged at 310, 295 and 285 cents of dollar per pound, respectively. Towards the statistical closure, the price of the metal climbed to about 330 cents per pound and, according to market reports, has been affected by the uncertainty surrounding possible labor-related downtime in some mines. In the baseline scenario, this increase is assumed to be temporary, so it does not modify the average price projections. Should a mine paralyze, it could be necessary to review both the projected copper price and other macroeconomic variables for Chile.

Several construction indicators show some stagnation lately, such as sales and shipments of materials and sectoral employment. The last survey of the Capital Goods Corporation revised downward the expected investment in construction and engineering works for this year, as some plans have been postponed. About housing, updated figures from the Chilean Chamber of Construction show that housing sales have remained stable, while the available stock, in general, is still high. Finally, our latest Business Perceptions Report, published in May, reports dissimilar views about companies’ investment plans, with significant idle capacity in some of them, especially in the north of the country and in some specific sectors. For this year, we estimate that GDP will grow in the range between 3.25% and 4%, which compares with the 3% to 4% expected in March. This combines the actual activity data known so far with annual rates of change for the second half of the year that are lower than those of the first half, reflecting a higher comparison base for the same period of 2017 and the aforementioned moderation in the pace of growth in final domestic demand. Beyond this year’s forecast, our view on the evolution of growth in the 2018-2020 period and our assessment of capacity gaps in the economy has not changed much. For 2019 and 2020, the projected ranges are unchanged. Thus, we continue to expect that in 2019 the economy will grow between 3.25% and 4.25%, and between 3% and 4% in 2020 (Figure 4).
This at a time when the CEECs already absorb around 33% of all FDI flows from the EU to emerging markets, and when this region is increasingly becoming the dominant sphere of 15 EU investors. It is, therefore, of paramount importance that the pace of reform be accelerated, 16 irrespectively of whether Malta joins the EU or not. Against this background, it appears that securing access to the EU market will become increasingly difficult as a non-member. Membership, on the other hand, promises immediate benefits for local exporters, because any product made in Malta would not only have complete access to the EU, but would also benefit from any preferential treatment which the EU receives under the various reciprocal trade agreements it has with third countries, without the need for Malta to negotiate separate agreements and without being subject to country of origin limitations. The extent of this benefit could be substantial because the EU does not merely have reciprocal trade agreements with Northern and Eastern European countries and with its Southern Mediterranean partners, but has also finalised, or is close to finalising, similar agreements with more distant countries and regional blocs, including 17 18 Mexico, South Africa, Chile, Mercosur and the Gulf Co-operation Council . For many local firms EU membership would also translate into an opportunity to outsource inputs more cheaply, and for consumers a wider choice and cheaper products.

The opportunities which enlargement would provide for investors should not be underestimated given that Europe is the region having the greatest concentration of regional trade agreements with third countries, and that it is also the region with the highest proportion of imports that is outsourced from partners covered by such agreements. The resultant increase in employment opportunities should compensate for any jobs lost through restructuring. The prospect of access to a large market will not, of course, alone guarantee larger inflows of FDI. Investment decisions are not based solely on considerations of market size. Unfortunately, Malta is at a disadvantage in terms of other relevant criteria such as resource endowments and transport costs. Such deficiencies, therefore, have to be made up for through other factors, including a sound  19  It could also be argued that the additional tax revenue from the application of the CET to imports from non-EU countries would make up at least partly for any losses arising from the removal of duties on intra-EU trade and trade with EU partners covered by reciprocal agreements. 20  The Cotonou Agreement additionally foresees that the number of developing countries that will continue to receive nonreciprocal access to EU markets under other agreements of this type is expected to decline, although there could remain a certain degree of asymmetry in timing to take into account the specific needs of developing countries.
2  BIS Review 48/2001  Now, let me be clear, I agree with those who argue that the single currency – by eliminating exchange risk within the participating countries – can make a significant contribution to increasing the depth and liquidity of financial markets and reducing transactions costs within the Eurozone. And indeed it already has had that effect, particularly in money and bond markets, especially the corporate bond market. It has no doubt also been a factor encouraging the tendency to, mostly national, consolidation as financial institutions prepare for greater competition from other euro-based institutions in their national markets. All of this is very positive for the competitive efficiency of Euro-zone financial systems both nationally and within the Eurozone as a whole. It is in fact one of the two main potential economic benefits of the single currency, the other, of course, being the positive effect of nominal exchange rather certainty within the Eurozone on trade flows of goods and other, non-financial, services and its impact in more efficient resource allocation. It is also the field in which the UK, through London, has been able to make a positive contribution to the development of the Euro even from outside the Eurozone. So I do not at all underestimate the contribution that the euro has made, and is making, to improving the efficiency of the Eurozone financial systems.

M R Pridiyathorn Devakula: The changing value of Thai society Keynote speech by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the ‘Horizon’s Night’, Bangkok, 19 May 2006. *  *  *  Mr. President, Distinguished Guests, Ladies and Gentleman, On the occasion of the 21st anniversary of the Graduate School of Business of Assumption University, I would like to express my warmest congratulations to the Assumption University for the long years of services in producing many qualified graduates for the country, thus contributing to our continued development in this very competitive global environment. When Brother Bancha invited me to deliver an address on any subject I see fit, I had to ponder long and hard on what would be an appropriate topic for the celebration of the Business School. Your organizing committee proposed that I talk about my concern on the recent development in the Thai society that I have voiced publicly during the New Year, and that is on the Changing Value of the Thai society. I am not sure whether the subject will suit tonight’s celebration, but I promise that I will do my best not to spoil your festive mood. As our economy grows, we have become influenced more and more by Western values and ways of thinking. This has inevitably led to various changes in our behaviour and day-to-day life. One such example is the recent rapid expansion in credit card businesses which could be potentially harmful to the Thai society, if not supervised appropriately.
In fact, I would only like to reinforce the conclusion you have no doubt arrived at – that you made a good choice when you invested in your further education. In 1987, when Robert Solow was awarded Nobel Prize in Economics for his contributions to the theory of long-term economic growth, it was already clear that his model of long-term economic growth had certain shortcomings in its description of reality. On the one hand, this is by no means unexpected, as all economic models suffer from a similar syndrome to a certain degree. On the other hand, the causes of the empirical problems surrounding Solow’s model are very inspiring from our point of view. The whole issue revolves around determining to what extent long-term economic growth is aided by human labour and capital measured as the sum of all previous investments that are still in use. In practical calculations, the contribution of human labour is always simplified as the ratio of wages paid to output. This ratio is about two-thirds for the developed world. Therefore, two-thirds of output in developed countries are used to remunerate labour and the remaining one-third to remunerate capital. Problems occur if the contributions of human labour and capital calculated in this way are applied to two countries at a different level of development. In such cases, there is a significant degree of divergence between the characteristics of these economies observed in reality and predicted by the model.

Zdeněk Tůma: Education as investment in human capital Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, for the graduation ceremony, The New Anglo-American College, Prague, 20 June 2008. *  *  *  Ladies and gentlemen, dear colleagues, It is my pleasure to be here today and to share with you some thoughts that concern the role of education as an investment in human capital in the long-term development of our economy and society in general. Today it’s commonplace for politicians to swear by concepts like investment in education, knowledge-based economy or the effect of education on long-term economic growth. They are also quick to add something about the necessity to pay for university education, at least those on the right wing of the political spectrum. Don’t worry, we haven’t met today to assess individual political ideas, and we all know that sometimes it’s a long road from what politicians say to what they do. However, the fact that you are sitting here today indicates that viewing education as an investment has its place in today’s society regardless of political preferences. I would like to use this opportunity to point out that although the concept of investment in education may be somewhat misused and can have unfortunate overtones for somebody, it has a rigorous theoretical foundation and is of high empirical relevance.
When the price level target has been attained, the currency is allowed to float and monetary policy returns to normal, either with the old inflation target or with the continued use of a price level target if this is deemed to be advantageous in the longer term. It is easy for the central bank to implement part (2) and keep the exchange rate at a given level when the currency is strong and would appreciate if it were allowed to float. Initial doubts among the market participants and the risk of this method failing means that it would appear to be a good deal to buy domestic currency cheaply and then sell it at a higher price when the method fails. This would lead to a high demand for the domestic currency. The central bank, however, could sell as much domestic currency as it likes and would only see its foreign exchange reserves increase correspondingly. A large foreign exchange reserve and monetary base might be considered inflationary, but higher inflation and inflation expectations are exactly what the central bank wants in this situation. The difficult thing, in contrast, is to maintain a fixed exchange rate when the currency is weak and would depreciate if it was allowed to float, as was the case of the speculative attacks the Swedish krona was subjected to during the fixed exchange rate regime in the early 1990s.

Thomas Jordan: 2012 – Swiss monetary policy in uncertain times Introductory remarks by Mr Thomas Jordan, Acting Chairman of the Governing Board of the Swiss National Bank, at the Swiss-American Chamber of Commerce, Geneva, 7 February 2012. *  *  *  The speaker would like to thank Claudia Strub and Till Ebner for their valuable support in preparing this speech. He would also like to thank Enzo Rossi and Peter Kuster for their helpful comments. Introduction Since last summer, Switzerland has been suffering the effects of the negative developments in the global economy, and particularly the escalating debt crisis in the euro area. The uncertainty over the debt crisis led to a massive appreciation of the Swiss franc during the summer months. In their search for safe financial assets, investors drove the Swiss franc to an all-time high against the euro in early August, which posed an acute threat to the Swiss economy and carried the risk of deflationary developments. In response, the Swiss National Bank (SNB) set a minimum exchange rate of CHF 1.20 per euro in early September of last year, which corrected the overvaluation of the Swiss franc to some extent. Thanks to this decision, investment planning for export-oriented companies has been facilitated, and the risk of both deflation and severe structural damage to the Swiss economy has been reduced. Without this policy measure, the extreme overvaluation of the Swiss franc and its volatility would probably have persisted.
This means  5  See M, Sandström, D, Forsman, J, Stenkula von Rosen and J, Fager Wettergren (2013), The market for Swedish covered bonds and links to financial stability, Economic Review, 2013:2. Sveriges Riksbank. 6  See L, Marklund (2014), Consequences of an increased loan-to-value ratio for the funding of mortgages with covered bonds, The analysis group’s memorandums on household indebtedness, No. 7, Sveriges Riksbank. www.riksbank.se. BIS central bankers’ speeches  5  that higher interest rates could have an effect on the household’s finances. A further reason for concern is that households’ expectations of future mortgage rates are much lower than the Riksbank’s. This could mean that households do not have sufficient scope in their budgets for higher interest rates. A study based on data from the end of the 1990s and up to 2012 shows that households have acted rationally and that it has been financially beneficial for them not to amortise their loans.7 It has been more profitable to instead invest their savings in financial assets, such as equity funds and fixed-income funds. This is because the return on these types of fund was high during this period, at the same time as mortgage rates were low and housing prices rose, with the exception of shorter periods of time. But although it has been a rational decision not to amortise the loans, I also believe that these conditions have laid the foundations for a new type of behaviour among households. It has quite simply become more common not to amortise.

However, the condition for these welfare gains is that there has been considerable confidence in the Swedish state, Swedish banks and the Swedish housing and mortgage markets. Today a large percentage of the market agents investing in Swedish bonds are outside of Sweden. This means that the Swedish financial system is also dependent on how other countries assess the Swedish mortgage and housing markets. It is important that these markets function well so that we can continue to enjoy a high level of confidence on the financial markets. We therefore have a major responsibility to ensure that the vulnerabilities are limited and that confidence remains strong. This is particularly important given the weaknesses that have emerged as a result of the structure of the financial system. The good access to capital and the large increase in mortgages has also meant that the Swedish banking system has grown, and become one of the largest banking systems in Europe. Moreover, the Swedish banking system consists of a few large banks that are closely interlinked. This means that problems at one bank can easily spread to other banks. All this means that the costs to society could be substantial if we were to suffer a financial crisis. 7  See T, Jansson (2014), Households’ amortisation decisions, The analysis group’s memorandums on household indebtedness, No. 4, Sveriges Riksbank. www.riksbank.se. 6  BIS central bankers’ speeches  How do we attain a better balance?