samchain/econo-pairs-v1 huggingface dataset:
However, going out to eat still costs far more than it did, relative to other stuff. So you’ll probably be inclined to go less often. But what do you do with the money you would’ve spent? Do you simply switch it to other things, leaving your aggregate consumption unchanged? Or do you reduce your total spending as well, and instead save a little more? At least for the idealised consumer of simple economic theory, two things turn out to matter for this decision. One is the extent to which there are other, close substitutes for the taxed activity. If you liked cooking at home, or indeed anything else, almost as much as going to a restaurant you’d be more inclined to switch your spending immediately to these other things. Your total consumption wouldn’t change much. In general, a hike in a particular sales tax will have smaller effects on aggregate spending, and result instead in more expenditure-switching, if it’s levied on something for which there are similar (and untaxed) alternatives. The other important factor is how long you expect the policy to last. If he thinks the tax hike is permanent, our idealised consumer of economic theory would substitute his spending straightaway towards other goods or services, regardless of whether they’re close substitutes. If not – if he expects the government to come to its senses at some point, and reverse the policy – he’ll be more inclined to wait until that happens.

It’s clear that the crisis could have indirect effects of this sort. But I think it’s helpful to separate the differing roles of economic and pandemic risk on demand. And as far as the latter is concerned, it turns out that two things matter for this choice (i.e. whether to switch to other things the money people would’ve been spending on risky activities or instead to save it). One is how similar the two sorts of consumption are. If you don’t lose much by substituting one for the other then, in the face of  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  a jump in infection rates, you’re likely to do more of it. The compensating rise in non-risky spending would be bigger and the decline in total spending smaller. The other factor is the expected duration of the jump. At least as predicted by this simple model, the degree of expenditure switching is greater, and the drop in aggregate spending smaller, the longer the rise in infection rates is expected to persist. It’s when the opposite is true – when people expect pandemic risk to dissipate and conditions for spending to improve relatively soon – that they’re more inclined to wait, and defer some spending (even in aggregate) until that happens. So at least as far as its direct impact is concerned, we might expect the pandemic to have material effects on aggregate consumption only if those effects are also temporary.
For example, individuals often make choices that provide immediate recognition or satisfaction—higher status within a peer group, for example—often at the cost of a potentially better financial outcome in the long term. This type of human behavior is at the core of the complexity of culture reform. Lessons from the field have increased understanding of where decision-making can depart from economic expectations. Sometimes, these lessons have been used to create circumstances and environments that positively influence individual outcomes by “nudging” individuals to better choices.11 These nudges, in turn, help reinforce acceptable behavioral norms, and ultimately a firm’s culture. How can we nudge in order to reduce misconduct risk? More broadly, how can the financial services sector, including firms and supervisors, leverage insights from the social sciences to promote environments that foster healthy group behavioral patterns with better decision-making? Technology The promise of new technology and big data for financial institutions is everywhere we look. 3/5  BIS central bankers' speeches  From artificial intelligence to machine learning to natural language processing, there seems to be unlimited potential for more efficient operations, better analytics and more accurate predictions, and more personalized product development. But, how will advances in technology, particularly the adoption of new technologies, such as artificial intelligence, influence the behavioral risks associated with human decision-making? And how does technology introduce new risks that prompt a rethinking of responsibility and customer relationships—especially with regard to privacy and information security?

I am sure that its long experience, accumulated knowledge and proficient staff make the Central Bank of the Republic of Turkey an institution that can fulfil these expectations. I am proud of this institution. I owe a great debt of gratitude to my colleagues, who have greatly contributed to our accomplishments and to our policy implementation. BIS Review 47/1997
I see three main reasons: -  not only to guarantee the credibility of the Euro (which is, in itself, in the interest of entrant countries themselves who will adopt this currency as their own);  -  but also to ensure equality of treatment between all entrants, who have to be applied, over time, the same entry criteria;  -  and, last but not least, to avoid the emergence of disequilibria after entry requiring painful adjustments, as shown by the Portuguese situation. Sound macroeconomic conditions have to be guaranteed before and after accession. Joining the Euro area does not guarantee convergence in development levels. National institutions and policy remain crucial after entry. The Maastricht criteria encompass: limited inflation differential vis-à-vis the best performing EU member; stability of the nominal exchange rate with the Euro; sound fiscal accounts; and low long term interest rate spread vis-à-vis the best performing EU member states in terms of price stability. BIS Review 115/2007  3  They must be satisfied simultaneously for a country to be able to join the EMU. Regarding participation in the ERM II, it is not a mere two-year “waiting room” before the Euro. It is a “training room” for full implementation and assimilation, by all economic agents, of sound policies. Therefore the criteria defined in the Treaty must be fulfilled, not just once, but with a good track record and with good prospects.

The Federal Reserve Banks’ strategic plan focuses on fostering safety and  BIS central bankers’ speeches  3  security not only in Federal Reserve interbank networks and applications, but also the safety and security of the payments process from end-to-end. The challenges and opportunities related to speed, efficiency and security of payments are most apparent when we examine the mobile and international payment ecosystems. The mobile revolution is blurring the lines between commerce, both online and offline, and payments. In this new world, payments are but a small part of the value to be delivered in the commerce experience, with loyalty programs, location and behavior-based offers, and personal financial management tools becoming part of the broader customer experience. Financial institutions are working hard to figure out how they will participate. We must consider how the payments industry can design its future systems and services to address these new opportunities. The business challenges for financial institutions are also great when considering international payments. Cross-border transactions are generally slow, inconvenient and inefficient, especially bank account-centric international payments sent or received on behalf of consumers or businesses. Some closed networks, such as Western Union and PayPal, have made advances in this space, but their networks are not as ubiquitous as open banking networks. Our leadership in the global economy calls for a more seamless international payment experience. Each of these areas – speed, efficiency, security – are embodied in the Federal Reserve’s vision for the future of payments.
It was also thought to be counterproductive, because of crowding out concerns in the presence of tight liquidity conditions in domestic financial markets and because of negative feed-back loops through higher risk premia. As a result, our fiscal policy is now locked on a consolidation path, aiming to bring the public debt below 60% of GDP within the end of this decade. This means the monetary policy remains the only countercyclical tool to stimulate economic activity. Taking everything into account, I believe fiscal consolidation, coupled to an expansionary monetary policy, delivers the correct policy mix in the country. However, given our experience so far, I would like to conclude my speech on three observations: –  First, monetary policy remains effective even in the presence of fiscal consolidation. In Albania, we have been able to steer interest rates into a downward trajectory and to stimulate credit growth in the domestic currency. However, the effectiveness of monetary policy is hampered by fiscal contraction. While the two policies moving in opposite directions would not be ideal in the best of times, it is doubly so in the presence of balance sheet adjustment in the private sector and heightened risk premia and deleveraging in the financial sector. –  Second, monetary policy can still achieve its goal of price stability in the presence of fiscal consolidation. However, this statement needs to be qualified further. On a longer term perspective, inflation remains a monetary phenomenon.

Gent Sejko: Conducting monetary policy when fiscal space is limited Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the high-level seminar on “Rethinking monetary-fiscal policy coordination”, jointly organised by the Bank of Slovenia and the International Monetary Fund, Tirana, 20 May 2016. *  *  *  Dear Panel Moderator, My honorable fellow Panelists, I believe this seminar provides a perfect platform for exchanging insights on the coordination of monetary and fiscal policies. This issue is quite topical from the perspective of challenges central banks are facing today. Before going into more detail on the topic of this panel, I would like to share some thoughts with you regarding the coordination of monetary and fiscal policies. The price stability mandate of the central bank and their operational independence does not lessen the need of effective coordination between monetary and fiscal policies. At a strategic level, the foremost objective of the macroeconomic policy is to achieve sustainable growth, in a context of price stability and a viable external account. This goal requires the contribution of both the fiscal and the monetary policies, within their respective domains, as well as a fair degree of coordination amongst them. On a macro scale, a balanced policy mix and an effective policy coordination requires: –  Policy sustainability: monetary and fiscal policies need to be on a sustainable path.
The alternative, as I have discussed before, 11 is to raise a levy from surviving firms after the event. This would have to be linked to a systemic-crisis threshold being passed for the deployment of public funds. And the basis for deciding how much was recovered from individual firms would need to be both clear and principled. In particular, it would be important to try to incorporate features that enabled costs of failures somehow to fall to uninsured, wholesale creditors. Those who finance the system in the good times need to have incentives to price for risk. Summary This has been a fairly high-level survey of the instruments on the crisis management menu. They are, of course, interlinked. They also bear on the wider debates about the structure and regulation of the financial system. Perhaps most obviously, the feasibility of producing recovery and resolution plans will feed into international and domestic decisions on minimum capital requirements for banks in general and on the mooted add-ons for so-called systemically significant firms. The weaker a recovery plan and the greater the obstacles in the way of its effective resolution, the more capital (and liquidity) a bank is going to have to hold. This is why emerging interest in Contingent Capital instruments is so important. If CoCos could form a material part of recovery plans, the landscape might just be transformed. And that in turn goes to the big issue.

In the wake of the crisis, experts have reached the conclusion that there is no bank model that would perform well or poorly in times of crisis. Different models of failing banks showed that the issue stemmed from undertaking high risk, financing with short-term instruments and insufficient protection offered by capital, even where minimum requirements were met. This conclusion has been reflected in higher supervisory requirements for quantity and quality of capital and liquidity, limits on the leverage ratio and maturity mismatch between assets and liabilities. The banking sector needs to comply with these requirements within a defined medium-term framework. Regulatory measures are also accompanied by the consensus on the need for structural reforms in the financial system, namely, separation of risk-bearing financial speculation activities from deposit collection activities, and issues related with too big to fail banks, by discouraging their excessive growth. The biggest lesson of the financial crisis was that micro-prudential supervision of banks was not sufficient to safeguard financial stability because the system as a whole behaves differently from individual parts. In an effort to make themselves safer, financial institutions may undertake such behaviours that collectively damage financial stability. The banking activity takes place through its own cycles, known as financial cycles, which may deteriorate the business cycle of the real economy. Banks are exposed to collective macroeconomic shocks, which weaken them, at the same time, thus affecting financial stability. The understanding of this lesson dictated the need for macro-prudential supervision in addition to the micro-prudential one.
Deloitte and Central bank Audit submit a joint auditor’s report on the annual financial reporting for the Fund. The Government has submitted a draft bill recommending that the Supervisory Council should appoint an external auditor. This would be in line with international developments and best practice in this field. The Executive Board is Norges Bank’s executive authority. The Executive Board has increased its oversight of investment management in recent years. In 2006, an advisory board was set up to support the Executive Board in the field of investment management. The board comprises four experts with extensive experience from large funds and institutions managing equities, fixed income instruments and other assets. Previously, Central Bank Audit was also responsible for Norges Bank’s internal auditing. When Deloitte was made responsible for the financial auditing of the Fund’s accounts, the Executive Board’s audit committee and an internal audit unit were also established. The audit committee comprises three of the Executive Board’s external members. The committee serves as a preparatory body for the Executive Board on matters relating to risk management and internal control. In 2008, the Executive Board issued a new job description and investment mandate for the executive director of NBIM. The organisation of NBIM is based on the executive director’s responsibility and authority as general manager of NBIM, which includes reporting directly to the Executive Board and regular supervision by the governor of Norges bank on behalf of the Executive Board.

As we move further into a period in which the external environment, characterised by unusual monetary and financial developments in the United States and the Mainland of China, presents increasing risks to monetary and financial stability in Hong Kong, such confidence and credibility will be crucial for us to stay the course and not be derailed. 6  BIS Review 139/2007
William C Dudley: Beyond the macroeconomy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing, Federal Reserve Bank of New York, New York City, 4 November 2015. *  *  *  Aysegul Sahin and Joseph Tracy assisted in preparing these remarks. Good afternoon and welcome once again to the Federal Reserve Bank of New York’s Economic Press Briefing. I am pleased to have this opportunity to speak with you. Today I want to focus on how economic outcomes often differ substantially across different segments of the population. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. The Federal Reserve has a dual mandate of maximum employment and price stability. While these mandates are expressed at an aggregate national level, it is important for policymakers to understand how they impact different groups of individuals across the country. Consequently, in addition to monitoring macroeconomic conditions closely on a day-to-day basis, economists at the New York Fed have been doing a substantial amount of work to understand how economic experiences differ across individuals and regions. As highlighted by the Nobel Prize Committee’s recent recognition of Professor Angus Deaton’s work, analyzing individual outcomes is vital to fully understanding the workings of the macroeconomy. With that in mind, I want to talk about two important areas that impact household well-being: labor income and housing opportunities.

But, there are also costs of being the dominant reserve currency. For example, this can lead to shifts in the valuation of the dollar that are due primarily to developments abroad that affect risk appetites and international capital flows. In such cases, the dollar’s valuation can be pushed to levels inconsistent with U.S. economic fundamentals. For the United States, I believe that the most important goal must be to keep our own house in order. If we do this, then I expect that the U.S. dollar will earn the right to remain the most important reserve currency in the world. The United States has a number of advantages in sustaining the dominant reserve currency status of the U.S. dollar. First, there is a first-mover advantage. As the leading reserve currency in the world, there is no strong incentive for countries to move to other currencies as long as the dollar continues to have the attributes I discussed earlier. The history of reserve currency usage is characterized by considerable inertia. The U.S. dollar emerged as the leading reserve currency quite a bit after it became the world’s largest economy. Typically, the loss of dominant reserve currency status requires either substantial economic decline or political instability that motivates foreign counterparties to shift to a new reserve currency. Second, the U.S. has the deepest and most liquid capital markets in the world. This is important in making U.S. Treasuries and agency mortgage-backed securities attractive holdings as part of countries’ foreign exchange reserve portfolios.
As regards microprudential supervision, the Report proposes the creation of a European Financial Supervision System. Under this system, the current Level 3 Committees for banking, insurance and securities would be transformed into three European supervisory authorities with the power to take binding decisions in certain fields. As to macroprudential supervision, the creation of a European Systemic Risk Board was proposed. Its main purpose would be to detect general risks, apprising the competent European authorities thereof, where pertinent, so they might take the appropriate decisions. These are some of the initial steps of a process which will no doubt be long, but which will profoundly affect the systems of each and every European country. It is thus important that Spain should participate actively in the work of these international fora. In this respect, it is most satisfying that Spain has been welcomed as a member of the Financial Stability Board,  BIS Review79/2009  9  the successor of the Financial Stability Forum created in 1999, in which we had not hitherto participated. To be sure, the Banco de España’s experience in the design and implementation of a regulatory and supervisory system that has proven most effective during this crisis has been one of the factors that have helped Spain merit this position. And here I shall conclude, though not without first thanking the Governing Council, the Executive Commission, the Directors General and all our staff for their work this year.

Nonetheless, the transformation of the financial crisis into a real recession has given rise to a second wave of risks to financial stability, whose nature is this time eminently macroeconomic. The Spanish financial system is facing this second wave with the relative advantage of having been less damaged by the first. But that is no guarantee of immunity since the deterioration of the Spanish economy exerts pressure, through various channels,  BIS Review79/2009  3  on banks’ and savings banks’ income statements. I shall discuss this when I turn to the financial system, after having analysed the situation of and outlook for the Spanish economy. The Spanish economy did not escape unscathed from the global contractionary trends, and in 2008 it underwent a far-reaching adjustment. Declines in GDP were evident from the third quarter, leading the economy to post a 0.7% fall in output at year-end in terms of its year-onyear rate. This recessionary pattern became more visible in the first quarter of 2009, when GDP decreased at a year-on-year rate of 3%, while employment was down 6% on its level a year earlier. As at world level, the improvement since in the latest indicators appears to point to some easing of the contractionary trends. The adjustment of the Spanish economy is impacting particularly those domestic spending components which showed the greatest excesses during the long upturn. The origin of this behaviour lies in the overlapping of a series of differing shocks.
I am very much aware of the challenges facing Italy today – including, until very recently, the flow of migrants – all the more so because of our shared culture and history, and, today, our shared institutions and challenges. As a central banker, however, I am going to focus on the economic issues, and notably on our shared currency and the euro area. ** To start with, let me just remind you of some stylised facts about Italy, which are often too quickly forgotten. Italy has many strengths: it is the euro area’s second largest manufacturing economy, after Germany and ahead of France. Its export performances have improved in recent years, thanks notably to an increased specialisation in high-end products1 and to the talent of its imprenditori, from Brescia to Bologna. Moreover, thanks to the reforms undertaken by successive Italian governments since 2012, its macroeconomic position is on the whole solid [slide]. To highlight just a few key figures: its net external position is almost balanced (-5% of GDP in 2017), and better than France’s; its current account has been in surplus since 2013 (2.8% of GDP in 2017); and its private sector debt is lower than the euro area average. Yes, Italy – just like Europe – has much more to be proud of than people say. Pride means that we can be more serene, without being aggressive. But it should not prevent us from being lucid. Italy is indeed expanding at a slower pace than it should be [slide].

5 “Sul tempo della ratifica della CED” 1 March 1954 in Einaudi, Lo scrittorio del Presidente (1948–1955), Giulio  Einaudi Editore, Torino, 1956. 5/5  BIS central bankers' speeches