samchain/econo-pairs-v1 huggingface dataset:
The available supply and demand-side factor breakdowns reveal that in the euro area and Spain the former are predominantly behind the rise in, and persistence of, inflation. 10. The observed stylised facts reveal some important differences compared with the United States, where inflation is currently somewhat lower. Food is making a similar contribution, but that of the energy component is considerably smaller (around 20%). By contrast, the contribution of the core component is larger. Indeed, in August underlying inflation stood at 6.3%, with wage growth and the weight of demand-side factors being significantly higher. A key determinant of the economic outlook is the course of the war in Ukraine and its impact on energy markets Europe is particularly exposed to the economic effects of Russia’s invasion of Ukraine, given its geographical proximity, its close trade and financial ties to Russia and, above all, its high dependence on fossil fuel imports from Russia, with limited capacity to replace them in the short term. At the outbreak of the war, gas imports from Russia accounted for approximately 40% of European gas consumption and 10% of its total energy consumption. The invasion of Ukraine was a wake-up call for us about this vulnerability, which has materialised through the reduction of almost 85% in the natural gas supplied via pipelines from Russia.

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].
Thus, the euro area countries that are being the hardest hit are those where the most affected sectors have a greater weight (in particular those relating to services requiring greater social interaction). Second, the recent increase in national public debt levels is unprecedented. Despite being widespread, this is having a more intense impact on the countries that were hardest hit by the crisis, some of which also had a less fiscal room for manoeuvre prior to the spread of the virus, which could limit the responsiveness of national fiscal policy. Similarly, this uneven impact has interrupted the correction of the external imbalances recorded since the end of the financial crisis. Specifically, the five euro area countries with a greater external imbalance measured by the net international investment position, i.e. the five countries with the highest level of net foreign liabilities, posted a tourism surplus of nearly 6% of GDP in 2019. The impact of the pandemic on these flows, which largely came to a halt in 2020, was very significant. In many cases this will lead to a reversal of the correction process I mentioned previously and it could increase imbalances within the Monetary Union. Given the current degree of integration in the area, adverse developments in one country will have negative consequences, in terms of activity and employment, on all the others.

See V. Ramey (2019), «Ten Years After the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?», Journal of Economic Perspectives, vol. 33(2), pp. 89-114, for a review of the existing evidence. Nevertheless, the estimates are subject to a particularly high degree of uncertainty. Thus, for instance, A. Abiad et al. (2016), The macroeconomic effects of public investment: Evidence from advanced economies, Journal of Macroeconomics 50: 224240, estimates a public investment multiplier of 1.4 after four years for a group of advanced economies. Further, the estimated value could nearly double if the investment is made in highly efficient projects or during periods of low economic growth. Conversely, other studies find that the public investment multiplier cannot, in the short term, exceed a value of 0.6, especially in cases of short-run fiscal stimuli (see M. Alloza and C. Sanz (2020), Jobs Multipliers: Evidence from a Large Fiscal Stimulus in Spain, forthcoming in the Scandinavian Journal of Economics). 9 This multiplier effect largely depends on the degree of complementarity between public and private investment. See Box 5.2 of the Annual Report 2019 of the Banco de España for a detailed analysis of the channels through which public investment supports medium and long-term growth. One of the channels accounting for the high public investment multiplier, even in the short term, rests on the idea that, as it is more powerful in the medium and long term, rational agents consider it in their decisions.
UK household indebtedness is high (a)(b)(c)(d) by historical standards Household debt to income ratio (of which mortgages)  Probability  Household debt to income ratio (excluding mortgages)  Total household debt to income ratio  Per cent of income 160 140  120 100 80 60  Annual GDP Growth  40 20 0 1987 87  Sources: ONS and Bank of England. (a) Distribution in each quarter is derived from quantile regressions of Real GDP growth on composite measures of real economy leverage and asset prices. Methodology follows quite closely that of Adrian et al (2016), ‘Vulnerable Growth’. 91  95  99  03  07  11  15  Sources: ONS and Bank calculations. (a) Total household debt to income ratio is calculated as gross debt as a percentage of a four-quarter moving sum of gross disposable income of the UK household and non-profit sector. Includes all liabilities of the household sector except for unfunded pension liabilities and financial derivatives of the non-profit sector. (b) Mortgage debt to income is calculated as total debt secured on dwellings as a percentage of a four-quarter moving sum of disposable income. (c) Non-mortgage debt is the residual of mortgage debt subtracted from total debt. (d) The household disposable income series is adjusted for FISIM and changes in pension entitlements. 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  Chart 7. UK house price to household income (a)(b) ratio House price to household income  Chart 8.

Income distribution of consumer credit borrowers relative to the general population  Sources: Finance & Leasing Association, Society of Motor Manufacturers and Traders (SMMT) and Bank calculations. (a) Annual sterling gross lending to individuals on dealership car finance for new car purchases provided by Finance & Leasing Association members, attributed to personal contract purchase (PCP). (b) Annual transactions on dealership car finance for new car purchases provided by Finance & Leasing Association members, as a proportion of SMMT new car registrations. Sources: NMG Survey and Bank calculations. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Chart 15. Stylised PCP deal  Chart 16. Market share objectives as a factor contributing to changes in secured credit (a)(b)(c) availability Net percentage balances (c)  Balance remaining Car value/amount left to repay £  Car value  40  20,000 Deposit  20  18,000 Monthly payments  16,000 0  14,000 Margin  12,000  -20  10,000 Optional balloon payment  8,000 2007  2009  2011  2013  2015  -40 2017  6,000 4,000  5  10  15  20 Month  25  30  35  Source: Bank calculations. Example shown: • Car value at new is £ Car value depreciates 45% after 3 years with most of the depreciation occurring in the first year. • Initial deposit of 10%. • 36 month contract with monthly repayments of £ per month. • Optional balloon payment of £ at the end of the contract.
Because the Federal Reserve is such a critical player in the market, it is important that it not create unnecessary uncertainty. That is, the Federal Reserve has a responsibility to be as transparent as possible in the conduct of its monetary policy. Since February 1994, there have been direct and immediate announcements following FOMC meetings of the Committee’s policy decisions, which, in my view, have helped remove uncertainty. In addition, in implementing monetary policy through its trading role, the Open Market Desk has made numerous changes in recent years to add clarity and transparency to its day-to-day market interventions. The thrust of these changes has been to reduce uncertainty and enhance the price discovery process in the Treasury market. As to the Federal Reserve’s responsibility for ensuring that banks support the trading process by making sound credit decisions, let’s not forget that, despite the increase in market players, banks in the United States, as elsewhere, continue to play an extremely important role in the financial markets. Not only do banks often underwrite bond issues and structure hedging instruments for BIS Review 108/1998  –4–  these bonds, but they also provide much of the financing that allows market makers to take positions. Dealers in the U.S. bond markets finance themselves through repurchase agreements with bank counterparties. In many cases, banks are also the source of backup liquidity. It is in these ways that bank credit supports the price discovery process.

In place of investment quotas, they will merely need to be registered with the PBC. Shares of companies in emerging economies Since the beginning of the year, the SNB has also been investing in shares of companies in emerging economies. In view of the growing importance of these countries for the global economy and financial markets, this was an obvious step in further diversifying foreign currency investments. With this move, the SNB is now covering most of the market capitalisation of the global stock markets. The decision to invest in the shares of companies in emerging economies was taken during the regular review of our investment policy. It is guided by longer-term risk/return considerations and is independent of short-term developments on the financial markets. Equity investments in emerging economies are managed passively, in the same way as those from advanced economies, by replicating a combination of different indices. Overall, however, these investments only account for a modest proportion of total equity investments. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5
This is the very foundation of the investment strategy with its high allocation to equities. Our ability to adhere to this strategy in a critical phase – even if this should last some time – is crucial if the fund is to deliver the returns we expect in the longer term. In 2008 Norges Bank’s management results were weak in both absolute and relative terms. Relative returns in 2008 were significantly worse than might have been expected based on the investment strategy chosen. In the management of the fixed income portfolio, the crisis in the financial system revealed that risk exposure in the various mandates was not sufficiently independent. The Executive Board has reinforced its oversight of the Bank’s investment management. It has issued a new mandate to NBIM that delegates investment management responsibility and introduces additional limits in the risk profile for investment management. As with the fund’s long-term investment strategy, the results of our operational management of the fund need to be measured over time. I am confident that the operation we have built up will deliver good results in the long term. Thank you for your attention!

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.
27 For example, in the First Industrial Revolution, with no welfare state and only the (dire) prospect of a Victorian workhouse, employees set up Friendly Societies and Co-operatives to support colleagues falling on hard times. With trade unions outlawed until the end of the period, it fell to the will of charitable industrialists, the likes of Robert Owen and Sir Titus Salt to improve conditions inside mills. By the end of the Second Industrial Revolution, spurred by a more organised labour force, the Government provided welfare for its population through workplace injury compensations, basic pensions and unemployment provisions. The interwar years ushered in universal healthcare, unemployment insurance and pensions. By the dawn of the 3rd Revolution, individual enterprise and privatisation were ascendant. Reform of social services – to help create a society of equal opportunity – followed, supported by increased public spending for maternity and child benefits, early years education, and provisions for pensioners. 28 The number of Friendly Societies rose to 27,000 by the end of the 1800s and Trade Union membership quadrupled from 2 million in 1889 to 8.3 million by 1920. Spurred by industrial unrest, the state introduced the precursor to the minimum wage in the first decade of the 1900s. Unionism has been in decline since the 1970s, with membership dipping below six million in 2012 for the first time since the 1940s.

However, the upward pressure on the equilibrium interest rate will lessen as the creation effect takes hold. 36 The experience of past episodes suggests that, in the first instance, the returns from the Fourth Industrial Revolution are likely to flow more to the owners of the new capital than to the workers who use it – leading to Engels’ pause in real wages. Owners of capital tend to be wealthier to begin with and evidence suggests that those with higher wealth have a higher propensity to save increases in income (this idea goes back to Kalecki (1954) and Marx before him). Increases in job polarisation and skills premia, which also shift income towards the top of the distribution, are likely to add to this effect. Globally, inequality could also increase as a result of the Fourth Industrial Revolution, which would further lower the equilibrium rate in open economies like the UK and Ireland. 37 Summers (2016) has argued that rising market concentration may also have been an important cause for the fall in the equilibrium interest rate over recent decades. See http://larrysummers.com/2016/03/30/corporate-profits-are-near-record-highs-heres-why-thats-aproblem/. 38 Measured as the proportion of people working part-time would who prefer a full-time job. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  This excess supply of labour available to work on non-automated tasks represents a shift along the Phillips Curve, imparting modest disinflationary pressures. For the UK, each additional percentage point of labour market slack is estimated to reduce annual wage growth by one third of a percentage point.
The latest forecasts by the IMF envisage for the euro zone, and even more for France, a rebound in growth in the second half of 2009 [respectively +0.6% and +0.8% in 2009Q4 / 2008Q4]. As regards inflation in 2009, the IMF is forecasting 1.9% and 1.6% for the euro area and France respectively. This is not the dark scenario that some people are predicting. Moreover, the IMF forecasts are based on the rather pessimistic hypothesis of oil prices 30% higher than at present and do not factor in the action plans announced over the last ten days. The outlook for financial regulation The crisis has highlighted the need to take a fresh look at the foundations of financial system regulations and has rekindled concerns about the structure of their supervision. At the French President’s instigation, Europeans are calling for the creation of a new “Bretton Woods”, to establish a new international financial order. I believe it would be useful to revisit the foundations of our financial regulation. This must be done without haste, but no stone should be left unturned. Improved regulation appears to be necessary in several domains, from rating agencies to risk management, the organisation of financial markets and even the question of remuneration. As a contribution to this ambitious debate, I would like to make two sets of remarks. One involves the fluctuations of financial systems, the other concerns financial supervision. Financial systems that operate in the framework of a developed market economy are, by nature, subject to cyclical forces.

Interbank markets have started to return to normal, but there is still some way to go. To this end, central banks have mobilised considerable firepower. The action taken in the past two days represents the culmination of a process that has been underway for over a year. Central banks have adjusted their operational frameworks in four different areas: First, the maturity of their facilities has been extended, to help to unfreeze the money market beyond the short-term segment. Second, the range of eligible counterparties has been broadened to allow adequate provision of liquidity throughout the system. Third, the range of assets eligible as collateral for refinancing operations has been expanded. Lastly, extremely close international coordination between the different monetary authorities is ensuring that the actions taken by each of them is part of a consistent overall strategy, while taking account of the specific features of each monetary area. These exceptional measures should greatly contribute to restoring confidence and the smooth functioning of money markets. All in all, combined with the coordinated cut in policy rates on 8 October, they are now enabling European banks to obtain short-term refinancing at a rate that is 120 basis points below that of just 10 days ago. Governments are also now intervening to support banks' solvency and resilience. Thanks, in particular, to France's leading role, Europe is organising itself. Since the Paris Declaration issued by the member countries of the euro area, Europe has a sound and consistent action plan. It is already being applied and comprises three main aspects.
In total, 1300 tons were sold. The decision to reduce our gold holdings by half was taken for two reasons that were highlighted by experts as early as 1997: First the SNB arguably had more gold than it needed. Switzerland's official gold holdings per capita were five times higher than those of the next G10 country. Second, the SNB had - on a mark-to-market basis - excess capital reserves that were no longer required for monetary purposes. As a result, the decision was taken to sell 1300 tons of gold. In May 2000, as soon as the legal framework had been amended to allow market sales, the SNB started it gold sales operations. We adopted a very transparent strategy and tried, within the constraints of the Washington Agreement, to maximize the proceeds of the gold sales in Swiss francs. The average selling price of USD 350/oz was 17 dollars higher than the average London fixing of the selling period. Of course, with today's prices around 600 USD/oz, you might think that we revisit our sales program with mixed feelings. As a matter of fact, price forecasts, which are inevitably subject to great uncertainty, did not feature prominently in the SNB’s decision to sell gold. The timing of the gold sales was largely influenced by factors that the SNB did not fully control. Once we were allowed to sell, we started our program within the window of opportunity that had been negotiated with other central banks under the first Washington agreement.

Oil prices have increased sevenfold since 1999; industrial metals have increased threefold since 2001. Similarly, the extraordinary gold bull market at the end of the seventies occurred in the context of rising oil and commodity prices. This parallelism, however, is not perfect. The average correlation between weekly price changes of gold and oil throughout the last 20 years is a mere 0.1. For metals, the correlation with gold is slightly higher but remains below 0.2. Both correlations have varied heavily within the period; currently, they are clearly on the high side (Graph 1). Graph 1: Correlation between gold, metals and oil prices Gold - Metals (GSCI)  Gold - Oil (Brent)  0.8  0.6  0.4  0.2  0  -0.2 Correlation of weekly price changes over a 1-year period -0.4 01.01.1983  01.01.1988  01.01.1993  01.01.1998  01.01.2003  Despite similarities in price movements, the gold market has a number of distinct features relative to other commodity markets. Arguably, the most important distinction is the fact that the ratio of available supply to annual production is much higher for gold than for other commodities. A significant proportion of the estimated 160,000 tonnes of all gold worldwide available in the form of jewellery, bars, coins, etc. (sixty times the annual mine production) could be brought to market at relatively low cost.