samchain/econo-pairs-v1 huggingface dataset:
Index above 50 indicates growth, below 50 a decline. 06  07  08  09  Sources: National Institute of Economic Research and Swedbank  14  BIS Review 138/2008  Poorer prospects for world economic activity 8  8 USA  7  7  Euro area  6  6  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 00  01  02  03  04  05  06  07  08  09  10  11  Sources: Bureau of Economic Analysis, Eurostat and the Riksbank  Lower oil price Brent crude, USD per barrel  140  140 Oil price, outcome Futures, MPU September 2008 Futures, 2008-10-16 Spot price, 2008-11-06  120  120  100  100  80  80  60  60  40  40  20  20 0  0 00  01  02  03  04  Note. Futures are calculated as a 15-day average.

We tackled many difficult problems, although it was unpleasant, and resolved their underlying causes. This has definitely given us better resilience to what is happening now. At what stage is the global financial system now? The global financial system is currently in the middle of such a process. Deficiencies in the system that have lain in wait in many parts of the world have now come into focus in an  BIS Review 138/2008  7  acute situation. This includes supervision, regulatory frameworks and the possibility for insight with regard to somewhat fanciful constructions of financial instruments. And it is not only the regulations and supervision that need to be reviewed and harmonised between countries – the same applies to the frameworks for crisis management and financial stability. Otherwise one country’s crisis management can easily become another country’s problem. We can now see examples of initiatives taken towards better and more coordinated crisis management in the EU, for instance. Now we are facing the task of fixing what is broken so that it will stay fixed and function better in the future. This applies both to resolving the deadlock on certain markets and the distrust that has been created within the financial system, as well as putting the problems to rights in the long term. Some measures have already been taken and more are on the way. It is not a simple process and it will probably take some time before the measures take full effect.
The last turmoil in the global and domestic financial markets has been a concrete proof of this fact. Thus, the dedollarization is not a straightforward process. As a clear evidence of this, the findings of Reinhart and her friends 13 show that only two countries, Israel and Poland, out of a total of 85 countries managed to achieve large and lasting declines in domestic dollarization. Accordingly, we can say that dedollarization is a difficult and long lasting process that is very much related with the macroeconomic stability and proper incentives. Hence, what we should do first is to continue with the current sound macroeconomic policies and structural reforms in a decisive way. Second, in order to start dedollarization, an active dedollarization strategy such as the so-called “carrot and stick approach” in the literature, which consists of regulations that will encourage the use of the Turkish currency, should be planned. However, as Ize and Levy-Yeyati 14 suggest, before launching an overly ambitious policy agenda, we should make all the necessary researches to understand the roots, risks and costs of dollarization and the implications of policy reforms made against it. I think, this conference provides a big opportunity for all of us to share our opinions and experiences and to enlighten our way of dedollarization. Distinguished Participants, I would like to conclude my words by repeating that I am very glad to welcome such distinguished economists from all over the world. I am sure that we have a lot to draw on the experiences of each other.

Secondly, Turkey had lived through the first stage of dollarization in which the foreign currency is used mainly as a store of value and partly as a unit of account, but not as a medium of exchange. In this context, the dollarization in Turkey can be called as financial dollarization. Distinguished Participants, After the 2001 crisis, the implementation of tight monetary and fiscal policies together with the structural reforms has enabled the country to bring the inflation down to single digit numbers and to reduce the ratio of public debt to GNP significantly. Also, financial markets have become deeper and less fragile. In this context, the banking sector reform that aimed to strengthen the regulation and supervision of the banking sector, restructure the public banks, improve the asset and loan quality and the capital adequacy ratio of the system has been of great importance. Additionally, the progress made towards economic stability, particularly the significant decrease in inflation, enabled us to drop six zeros from the Turkish currency. This currency reform has increased the credibility of the Turkish currency both in internal and external markets. The issuance of the New Turkish Lira debt instruments by foreign banks in the international markets is an important indicator of this increasing credibility. Consequently, the desire and the need to invest in foreign currency in order to hedge the value of wealth decreased significantly and investors have started to increase the share of Turkish currency assets in their portfolios.
The ECB’s experience shows that a specific strategy to foster diversity can generate tangible benefits in the form of a better gender balance. In 2010, the ECB’s Executive Board implemented a marked shift in policy towards diversity by issuing a public statement and launching a diversity action plan. The action plan was supplemented in 2013 with explicit gender targets for the entire ECB hierarchy. The gender gap in the probability of promotion declined notably after the strategy was launched. Entry-level economists typically join the ECB at the age of 30, many of them with a PhD. They usually enter the ECB at the expert level (salary band F/G) and subsequently progress to the principal economist level (salary band H) and adviser level (salary band I). The salary bands above adviser level are for heads of division and senior management. To move to a higher salary band, economists must submit an application and be selected in a promotion campaign. 4  The study shows that the average difference between economist-level starting salaries for men and women in the period 2003-2017 was small: just over 1%.2 However, the gender wage gap widens notably over time, reaching more than 7% after ten years.3 For moves within the same salary band, however, the differences are minimal (see righthand panel). This indicates that the divergence between men's and women's salaries is primarily related to the probability of promotion over time.

Instead of one tool, the policy rate, central banks now use several different tools. Previously, the focus lay on influencing the financial conditions via a short-term, risk-free interest rate that primarily affects the banks’ funding. Now, central banks also introduce measures that directly affect more long-term and even non risk-free interest rates. These too can lead to the intended effects on the interest rates and other credit conditions that households and companies face, and thereby to the desired effects on capacity utilisation and the rate of inflation. Another way of describing the menu of monetary policy measures that are now being used is that they concern both sides of the Riksbank’s balance sheet. When the policy rate is adjusted, this entails changes for a part of the Riksbank’s liabilities. 8 And when the Riksbank purchases different types of assets, this means that the asset side changes. In other words, today’s monetary policy works with the entire balance sheet. 7  Rajan (2005) is a very well-known reference. 8 In 2020, the Riksbank has also changed the conditions for other kinds of liabilities. 6 [13]  Crisis preparedness – part of monetary policy Another change is that the central banks have been reminded of the importance of not just being able to stabilise normal economic cycles but also being prepared to act rapidly and broadly to restrain the effects of crises affecting both the development of the real economy and the financial system.
Interest rates were cut faster and more than would have been justified on the basis of historical behaviour. Between the third quarter of 2008 and the third quarter of 2009, the Riksbank cut its policy rate from 4.5 per cent to 0.3 per cent, a cut of 4.2 percentage points in the space of one year. We did not hit the lower bound. GDP growth and inflation did fall, but the falls were less severe and not as prolonged as would have been the case if we had not acted so forcefully. The falling trend in the long-term real interest rate has increased the risk that we may hit the lower bound more often in the future, even if we are not sure where 22 See Brainard (1967). 23  See Apel et al. (1999). 24 See, for instance, Söderström (2002). 21 [24]  it lies. In such a situation monetary policy should act more aggressively on negative impulses. Unconventional measures, such as extensive government bond purchases, may be an important measure. 25 Economists are alternatively criticised for being one-handed or two-handed – either we are too one-sided in our considerations and recommendations, or else there is too much of on the one hand and on the other hand. I mentioned earlier that “it depends” how monetary policy should react to uncertainty. When the uncertainty concerns long-term trends, monetary policy should act more cautiously. But this is not a general principle.

It will then become easier and cheaper for companies to find new staff and the vacancies will be filled faster. But for those people entering the labour force, it will nevertheless take some time to seek and find a new job. Unemployment will therefore increase, at least initially. An increase in labour force participation will also increase competition for jobs. Employees’ wage demands will therefore be more subdued. When labour force participation increases, the covariation between unemployment and wages will become negative. But it is important to understand here that the negative covariation is due to the increase in labour force participation, that is, the causality goes from labour force participation to unemployment and wages. It is thus not rising unemployment in itself that causes lower wages. The covariation between unemployment and wages that is observed in the data is only a correlation, which does not say anything about which affects what. Figure 6a illustrates how exogenous changes in labour force participation affect wages and unemployment. The covariation is negative, as expected. Figure 6.
Mugur Isărescu: Issue of CHF-denominated loans Presentation by Mr Mugur Isărescu, Governor of the National Bank of Romania, in front of the Budget and Finance Parliamentary Commission, Bucharest, 10 February 2015. *  *  *  Ladies and gentlemen, Members of Parliament, First of all, I would like to thank you for the invitation to present, together with my central bank colleagues, the stance and action steps adopted by the National Bank of Romania in relation to the issue of CHF-denominated loans in Romania. I assure you that we deem this debate to be very useful at the current juncture. The members of the central bank’s top management have come before you in line with the legal obligation stipulated in the NBR Statute (Law 312/2004) of providing the Parliament and the general public with quality information for a clear image of the policies and the measures adopted by the National Bank of Romania in fulfilling its tasks. I. The Swiss National Bank’s decision  The public debate on CHF-denominated loans started on 15 January 2015, when the Swiss National Bank removed the 1.2 EUR/CHF floor, which led to the immediate and significant appreciation of the Swiss franc against the euro, the US dollar and other currencies.

Moreover, credit growth to the private sector remains subdued, and the necessary adjustment of balance sheets in the public and private sectors will probably continue to dampen the pace of recovery. The risks surrounding the economic outlook remain on the downside. Geopolitical risks, as well as developments in both emerging market economies and global financial markets, may have a negative effect on economic conditions in the euro area, through their impact on energy prices and global demand for euro area products. Further downside risks include an  BIS central bankers’ speeches  1  inadequate implementation of structural reforms in the Member States and weaker than expected domestic demand. Looking at price developments, we see that euro area HICP inflation declined sharply from late 2011 to October last year, and has since been fluctuating around very low levels below 1%. According to the latest data (Eurostat’s flash estimate), euro area annual HICP inflation stood at 0.5% in June 2014, unchanged from May. Annual HICP inflation is expected to remain at low levels over coming months, before increasing gradually in 2015 and 2016. At the same time, medium to long-term inflation expectations remain firmly anchored in line with price stability. Upside and downside risks to the outlook for price developments are both seen as limited and broadly balanced over the medium term. We will monitor the possible repercussions of geopolitical risks and exchange rate developments closely in this context. The exchange rate is not a policy target for the ECB.
If collapse occurred, the vast array of complex contracts within LTCM might not close out. The dimensions of the exposures were considerable, and a disorderly run on LTCM, triggered in part by a lack of legal certainty, could well have provoked a serious liquidity situation. No surprise that there was a co-ordinated purchase by the main creditors to enforce an orderly wind down. A key lesson for financial stability oversight is the need to encourage ways of improving legal certainty. 7. Implications of the new environment: risk and culture  So much for the drivers of change - liberalisation; technological advance and new products. But what about the implications for the financial markets and their oversight? The first implication is to highlight the need for examination and possible change in supervisory and regulatory frameworks. What made sense before, in terms of separate regulation for each silo of banking, insurance and securities might look different today. We have also certainly seen a move towards consolidated supervision. I will return to this area later. But second, oversight needs an understanding of a number of different soft issues: of culture and attitudes to risk which can affect behaviour. These can and do vary across the different areas of activity. The existence of new concentrations of risk might not matter if their new holders are fully aware of the risk implications, or if their likely behaviour could be anticipated by other financial participants or the public authorities.

Real effort is needed to try to understand the dynamics of collective, and sometimes irrational behaviour of firms, their clients and counterparties - particularly behaviour that could lead to one-way markets. In a downward market they can be the scourge of stability and destroyer of liquidity. 3. Financial stability and public policy  The business of oversight of, and possible intervention in, the financial system falls to public authorities. The justification for this involvement is accepted by all but the freest of free marketers. 1  Raymond Goldsmith, Comment on Hyman Minsky’s “The Financial Instability Hypothesis: Capital Processes and the Behaviour of the Economy” in C P Kindleberger and J-P Laffargue Eds, Financial Crises: Theory, History and Politics. Cambridge University Press (1982). BIS Review 5/2004  1  Financial stability can be looked on as a public good. And the costs to society of crises and instability can go well beyond the cost borne by players within the financial services arena itself. Not only is it important in providing an effective monetary transmission mechanism, but collapse and instability can lead to decline in aggregate demand and a rise in unemployment. Research suggests that the average cumulative output loss of a banking crisis in an emerging market economy is nearly 14% of GDP, and up to 25% in developed countries.2 The roles and aims of the public authorities - a combination of supervisors, central banks and government - embrace two interdependent fields.
First, Spain faces the challenge of reducing the unemployment rate and the temporary employment ratio, which have been persistently high in recent decades. In particular, the unemployment rate of the Spanish economy was, on average, 15.9% over the 2000-2019 period, as against 9.3% in the euro area. Also the share of temporary employment was 28.3% over the same period in Spain, but only 15.4% in the euro area. Young people (those under the age of 24) have been particularly affected by this instability, with their rate of unemployment (32.5%) and their share of temporary employment (69.5%) standing well above the euro area average in 2019 (15.6% and 52.4%, respectively). Reducing this high employment instability is key, especially for young workers, given its adverse economic effects in many spheres. For example, employment instability affects the 3  accumulation of workers’ human capital and can thus have very persistent effects on their working lives. Furthermore, it also increases uncertainty over the future income path of the affected workers. This not only has consequences for spending decisions, but also for emotional well-being, the formation of new households and the birth rate. In this context, one of the main objectives of the labour market reform enacted in 2022 in Spain is precisely to combat the high proportion of temporary employment. And indeed, since the approval of this legislation, permanent hiring has quickened significantly and temporary hires have slowed, with permanent contracts increased most among permanent seasonal workers and permanent part-time workers.

In this regard, it should be emphasized that our projections on inflation, which currently anticipate that it will remain high in the coming months, but will moderate gradually thereafter to levels compatible with the ECB’s mediumterm inflation target of 2% is based on the assumption that there will be a slowdown in the growth of energy prices, in line with those on the futures markets, and that a moderate wage growth response and a squeezing of trade margins will prevent the emergence of the pricewage feedback loop. Avoiding this feedback loop from wages, mark ups and prices is precisely the main priority objective of the incomes agreement that we have been advocating in recent months at the Banco de España. It would consist of an agreement between firms and workers, under the framework of social dialogue, to share the inevitable loss of national income that higher commodity import prices entail. And agreement that should also, in our view, include the public sector, by avoiding both an across-the-board fiscal impulse in this context and a widespread use of automatic indexation clauses in expenditure items. The third session of this conference addresses this question. Over a longer horizon, the Spanish economy faces a series of structural challenges, some of them going back several years or even decades. In our conference we will be focusing on four of these challenges, namely the need to correct dysfunctions in the labour market, to boost productivity growth, to make public finances more sustainable and to address the challenges posed by climate change.
By slowing the rate tightening cycle somewhat so that labour demand increases, the central bank can contribute to promoting employment. But when employment rises sharply and rapidly, wage growth has a tendency to accelerate. Inflation usually follows suit. As shown in the Chart 5, we have previously experienced that the rise in prices for domestically produced goods and services accelerates in the wake of a sharp rise in employment. Chart 5 When employment rises rapidly, inflation tends to follow suit Four-quarter change. Percent 5  5  4  4  3  3  2  2  1  1  0  0  –1  –1  –2  1993  1996  1999  2002  2005  2008  2011  2014  2017  Employment growth, moving average Domestic goods and services inflation six quarters later  –2  Sources: Statistics Norway and Norges Bank  6  The role of monetary policy is to promote maximum employment without causing inflation to accelerate. Monetary policy cannot take primary responsibility for employment. Entry into the labour market is determined by the education system, the social benefit system and labour market policy. An increase in labour supply will create more room in the next round for an increase in employment without causing inflation to accelerate. NORGES BANK ECONOMIC PERSPECTIVES 17 FEBRUARY 2022  THE LABOUR MARKET IMPROVED RAPIDLY Monetary policy is a first line of defence in stabilisation policy. Economic downturns are countered by rate cuts (Chart 6).

Frozen capital markets threatened even solvent banks. At an early stage, there were fears that the pandemic that hit us in 2020 might also trigger a financial crisis. Three different situations, but one common endeavour for central banks: The financial system had to be protected. At the start of the pandemic, access to market liquidity was narrow, and the price of available capital was disproportionately high. Norges Bank stepped in and provided additional liquidity support to the banks (Chart 2). The purpose was to contribute to smooth market functioning and ensure that the policy rate cuts passed through to the interest rates faced by households and businesses. 3  NORGES BANK  Chart 2 Additional liquidity support during the pandemic  ECONOMIC PERSPECTIVES 17 FEBRUARY 2022  F-loans. In billions of NOK 200  200  150  150  100  100  50  50  0 Jan-20  Apr-20  Jul-20  Oct-20  Jan-21  Apr-21  Jul-21  Ordinary F-loans Extraordinary F-loans  0  Source: Norges Bank  The actions taken build on several important principles:3 First, the risk transferred to the central bank should be as low as possible. If the support schemes are too favourable, we risk undermining the banks’ own motivation to maintain sound credit and liquidity policies. Those who take risks must also be prepared to bear the losses. Second, loans should only be given to banks that are solvent. The central bank’s role is not to help recapitalise banks.