samchain/econo-pairs-v1 huggingface dataset:
I said the simple pre-crisis pattern in Chart 1 was the appropriate way to set interest rates if you’re in an environment where swings in economic growth are driven predominantly by shocks to demand, things that push output and inflation in the same direction, and if there are few other enduring shocks to inflation. But if that was a reasonable view of the world in the years before the financial crisis – a period some now call the “the Great Moderation” – it’s clearly been much less of one since. Productivity growth is less predictable and it’s harder to count on a single rate of “trend growth”. (Nor can we be assured of a fixed, “neutral” rate of interest, below which policy is necessarily expansionary and contractionary only above it. In particular, it became clear even before the crisis, and increasingly so after it, that this “neutral rate” had over many years been declining.) And if we’d forgotten during the Great Moderation that domestic output isn’t the only thing that affects inflation we’ve certainly been reminded of it since. In the UK, the two big exchange-rate depreciations in 2008 and 2016 pushed up inflation for a protracted period, independently of activity at home. The strains in global goods markets caused by the pandemic, and the substantial impact on commodity prices of Russia’s invasion of Ukraine, have done the same, to an even greater extent.

It was in a determined effort to avoid them, having already cut interest rates as far as they could, that central banks then turned to alternative, “unconventional” monetary policies. For the most part this meant QE. Asset purchases are designed to keep a lid on forward rates, thereby supporting demand and activity. In the academic literature, however, many economists argued for an alternative – and potentially more powerful – option, namely a committed form of forward guidance. The economist Michael Woodford has been one prominent advocate[8]. Remember that the name of the game, when faced with this risk, and having run out of room to cut the policy rate any further, is to lower forward real interest rates. In this respect, a credible declaration that you will keep the actual policy rate low, even in the event of a future increase in inflation, does two things. It keeps nominal forward rates low. It also raises expected inflation. In the normal course of events the central bank would tighten policy as inflation rises, choking it off before it turns into a persistent overshoot. If you tell people you’re not going to do this then – as long as they believe you – this will push up inflation expectations and further depress the real rate of interest. In many simple economic models expected real interest rates have almost as big an effect on spending as the current real rate.
There, I spoke about the recovery in the UK economy over the past three years, the dramatic improvement in the jobs market and the high degrees of confidence among companies and consumers. This met with several knowing nods, a few furrowed brows and some gently probing questions. Overall it seemed we were all on the same economic page, if not always on the same paragraph or line. My next visit was to a community centre in Nottingham with half a dozen local charities and community groups. This was something of a new departure for me. Typically, the Bank’s regional visits have tended to focus on company contacts in the public and private sectors. I hoped speaking to this different group of organisations, drawn largely from the voluntary sector, might provide me with a different perspective on the fortunes of the economy, the jobs markets and degrees of confidence in the recovery. It did not disappoint. I began by speaking about the UK’s economic recovery. I never got as far as the improvement in the jobs market or surging confidence. I was stopped in my tracks by a forest of furrowed brows and a phalanx of probing questions, not all of them gentle. “What exactly do you mean by recovery?” one asked. “My charity is dealing with 50% more homeless people than three years ago.” Every other charity in the room had similar stories to tell. Whether it was food banks, mental health problems or drug addiction, all of the numbers were up.

But the pattern is again uneven, with the largest gains in London (47%) and the South-East (25%), whereas in Wales the gains are smaller (8%) and in the North East there has been a small fall in wealth. With  9  6  In other words, this is a standard “Benthamite” (Bentham (1789)) social welfare function of the form : 𝑆𝑆𝑆𝑆 = ∑𝑖𝑖 ln 𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖 where 𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖 is gross value-added for region i See, for example, Sen (1970). Other forms of social welfare function – such as those proposed by Rawls (1974) and Sen (1973) – place greater weight on those with lower initial levels of well-being. They would suggest weaker profiles for social welfare than those shown here. BIS central bankers’ speeches  wealth in the former regions already higher than in the latter, the upshot has been a widening in the regional distribution of wealth. As with income, these wealth data can be translated into a measure of social welfare. Chart 14 plots that relative to aggregate wealth since 2007. The well-being benefits from higher wealth have been roughly half as large as would have been the case had these gains been evenly distributed regionally. This evidence goes some way towards reconciling the macro data and the micro stories from my regional visits. Whose recovery? To a significant extent, those living in London and the South-East of England. (b)  Income distribution  A different lens on recovery comes from looking at how income gains are distributed across households.
Central banks have one or sometimes two well-defined tasks, namely to maintain stable prices and often also to safeguard the stability of the financial system. For that purpose, the central banks have primarily one instrument, the instrumental rate, sometimes supplemented by other means of exercising control. The objectives for central bank activities are thus simple and clear, their arsenal of tools is limited. This cannot in any way be compared with the complex tasks of governments, their decisionmaking situations with conflicting goals and a continually changing agenda. In Sweden, a small part of the public policy has been removed from the Government and the Riksdag to the Riksbank by the Riksdag’s own decision, namely responsibility for stable prices and financial stability. Everything else remains on the Government and Riksdag. The tasks and policies of the central banks are thus not in any way comparable with government policy as regards importance and degree of complexity. However – having said this – I should like to strongly emphasise the importance of there being a high level of confidence in the Riksbank. It can perhaps be said that the most important variable we have to comply with is the public’s inflation expectations. After all, it is these expectations that reflect confidence. If disturbances affect the economy through, for instance, an oil price shock, so that inflation exceeds the Riksbank’s target of 2 per cent, a return to the target can take place more quickly if public expectations remain at the 2 per cent target.

If this second statement is correct, I see it as the Riksbank's obligation to investigate the possibilities of issuing an e-krona that can fulfil approximately the same role as cash previously did. If the Riksbank does not offer an electronic alternative, this also means, in practice, that all of our payments will have to go through banks or other financial institutions. Since the payment market has the imperfections it does, as I have described earlier, it is likely that monopoly situations, inefficient for the economy as a whole, would arise if the private market was allowed to act freely with no central government involvement. This problem could possibly be managed with the use of regulations, but it can be difficult to effectively regulate a monopoly. As long as a public alternative exists, this puts certain natural restrictions on the private players. Historically, cash has been this alternative. There are various possibilities for creating a technical platform for the e-krona. One possibility is to connect it to the existing infrastructure. Another alternative could be to develop a new system that could act as backup for other payment systems. This would give us an alternative independent platform that can build upon other technology, which would reduce vulnerability in comparison with only having one system. This could be particularly important if we decide to utilise the ECB’s system so that the main payment infrastructure becomes located beyond Sweden’s borders. 28 The Riksbank’s e-krona project. Report 1. September 2017. See also Bjerg, O.
In 2006, the population increased by more than 40 000 and the number of households by roughly 30 000. Furthermore, migration patterns in Norway follow the business cycle. Migration to densely populated areas is now rising. Demands for high standards and new building regulations have also pushed up housing construction costs and thereby house prices. 10  BIS Review 15/2007  The rise in house prices has been accompanied by a sharp increase in household debt. In Norway, household debt is now almost twice the level of disposable income, and the debt to income ratio is the highest ever. It is higher than in Sweden and the UK, but lower than in Denmark and the Netherlands. Norway is among the countries with the highest share of owner-occupied dwellings, at around 80 per cent. This high proportion partly accounts for the high mortgage debt of households. In recent years, new loan products have also been launched, facilitating mortgage equity withdrawal. Housing wealth has become more liquid. Borrowers have greater scope for choosing repayment profiles. We cannot identify the exact level of household debt that can be sustained over time, but the rapid accumulation of debt increases household vulnerability. Housing investment has been profitable in recent years. Since 1992, the real rise in house prices has averaged 8 per cent, which is markedly higher than for the entire post-war period. At the same time, fluctuations in prices have been considerably smaller. The main determinants of house price inflation have long been income, unemployment, interest rates and residential construction.

Notably, the 1994 cycle was associated with a large increase in U.S. long-term bond yields, and appears to represent a case in which there was a considerable gap between what the Fed did in terms of monetary policy tightening relative to initial market expectations. A similar gap was apparent during the taper tantrum in the spring of 2013, when our attempts to provide guidance about the potential tapering of asset purchases ended up confusing market participants, causing many to anticipate an earlier start and more rapid rollout of actual policy rate hikes. These episodes are reminders of the importance of transparency and clear messaging in how the Fed is evaluating the evolving economic landscape, a point I’ll return to shortly. Third, the stance of Fed policy will be far from the only factor affecting external financial conditions for EMEs. Even as the FOMC considers the appropriate timing and pace of moving to a less accommodative policy stance, the ECB and the Bank of Japan are implementing additional easing measures. As a result, external conditions will remain more supportive than would be indicated by a narrow focus on Fed policy alone. Finally, EME fundamentals are likely to be the most important determinant of how their financial conditions respond to Fed policy normalization. This was one of the key lessons of the taper tantrum. At first, market pressure was somewhat indiscriminant across countries.
When we look at successful examples of technology adoption, it’s not just about state-of-the-art technology. It’s about how you manage the change – especially changes to mindsets. It takes time and effort to convince people that a new technology is worth the cost, the effort or the potential risk. 16. This is often the case with larger organisations, especially official institutions like the HKMA. We set up the FFO in early 2016 precisely to serve as a dedicated agent to drive changes and take practical steps to turn ideas into reality. 17. The FFO has contributed to a number of Fintech initiatives in the past three years – from cybersecurity to supervisory sandbox, open API, the FPS, and the rest of the seven Smart Banking initiatives. But I must stress that the FFO is not working in isolation. Other parts of the HKMA must work alongside it, and of course it must work with the banking, technology and even legal sectors. 18. The FFO has essentially served as the coordination point of this collective effort. This has enabled a “change” mindset to spread throughout our organisation and among our partners. And the result is the impressive Fintech developments we have seen in the last few years. 19. A change agent does not have to come from within. Sometimes, competition is an effective driver for innovation. One good example is the imminent entry of virtual banks in Hong Kong.

Whether you are a technology service provider, a technology user in a financial institution, or an investor who funds these Fintech innovations, we invite you all to join us. This is going to be an exciting transformation, and we intend to make sure Hong Kong is at the leading edge of it. 42. Join us and be part of the change! 5/5  BIS central bankers' speeches
The feeling one gets is that the starting point for the analysis is often: “Assume that the world had looked different than it does now – that is, the inflation targets had been higher”. Then, one observes, developments would probably have been more favourable than they actually were. But in this case the challenge mainly concerns how the transition from one world to the other will be attained. Setting an inflation target for the first time is one thing, but changing a target that has become established is quite different. If one is to change the level of an inflation target, I believe the easiest and most efficient way would be to do so in a relatively normal situation – when inflation is not too far from the original target and the economy is not in a crisis or otherwise in a difficult situation. If, for example, one raises the inflation target in a situation where inflation is much higher than the target, there is a risk that this will be perceived as giving in and taking the easy way out and that one will be expected to continue doing this the next time there is a problem. There is a corresponding risk if one lowers the target when inflation is undershooting the target by a long way, even if there are of course limits as to how low one can set the target. Sooner or later expectations would probably adjust to the new target, but the adjustment period could prove costly.

A key question for the future is this: do notification and memo-posting suffice, so that funds actually move at discrete times in the day, as they do in the UK, or do funds need to move in near real time as well? 2  BIS central bankers’ speeches  In the near term, we in the Federal Reserve continue to work to reduce the time required to complete payments and deliver payments-related information in the channels in which the Fed operates. The debate to be had by the industry is whether our existing payments mechanisms can meet the needs of the future or we need to embark upon designing a next generation payment instrument. We welcome your voice in that debate. Let’s turn our focus to end-to-end efficiency in the payments system. Innovation is occurring in closer proximity to end-users, at points between payment providers and their customers, and between merchants and consumers. Enhancing efficiency will mean moving business-tobusiness (B2B) and person-to-person (P2P) payments from paper to electronics, and bringing down the end-to-end cost of initiating and receiving payments. Efforts will continue by Internet/Web vendors to create customer-facing technologies to help users initiate payments. Here’s where mobile and handheld innovations may play a large role. In what form, and when, growth occurs will depend on when alternatives offer the speed, convenience, simplicity and other advantages that drive broad adoption.
The reforms proposed by the Central Bank in two recent reports are designed to foster such discipline. In many instances, the same measures could contribute to stability and sustainable output growth as a member of a currency union and, in some respects, could be easier to implement from within it. Thank you. 8  The most viable option would perhaps be the Danish krone, provided that the authorities were willing to bet on its continued stability vis-à-vis the euro. 6  BIS central bankers’ speeches  Below are the slides shown during the speech: Chart 1  Chart 2  BIS central bankers’ speeches  7  Chart 3  8  BIS central bankers’ speeches

As we continue to ponder its broad and complex dimensions, platforms such as this for open and active dialogue between public and private interest groups are important to provide further insights on the many issues that will provide the direction forward for the wider and effective global implementation of Basel II. On that note, I wish you all productive and successful discussions. Thank you. 4  BIS Review 99/2008
The downturn was remarkable symmetrical and counteracted by a series of interest rate cuts throughout the western world. Sweden was also affected by this downturn, of course, although to a lesser extent than many other countries, particularly because fiscal policy was more expansionary, but also due to the krona being undervalued. Resource utilisation was therefore assessed to be higher in Sweden than in many other areas, which affected the relative interest rate situation. At the beginning of 2002, a wave of optimism began to spread, but it proved short-lived. The main reason for this was the increasing geopolitical unease concerning Iraq and later the war in Iraq. A recovery in the global economy was still expected, but at a later date. The weak economic activity led to further easing of economic policy during 2003. The United States Federal Reserve, the Riksbank and other central banks continued to cut their instrumental rates to all-time low levels. Now most indications are that both the Riksbank and other analysts were slightly too pessimistic in connection with the Iraq war, particularly with regard to the view of economic activity in the US economy, but also developments in Asia. During the second half of 2003 we have had reason to make a further upward revision to our assessments of global economy growth and the picture of the global economy as a whole looks good at present. The US economy is expected to grow at a slightly more rapid rate than we estimated in the December Inflation Report.

In the short term, the most significant cause for concern in the US economy is that employment is still weak. Of course, the combination of rapid growth in GDP and a weak labour market mean that productivity growth is good, but the dismal labour market situation could nevertheless create uncertainty among households and contribute to subduing consumption. However, it is difficult to believe that it would put an end to the upturn we are seeing now. There are also signs of an upturn in the euro area now, although the picture is not as clear-cut as in the United States. Business tendency surveys for industry show an increased optimism, while industrial production is slowly beginning to rise. Developments in Asia, central and eastern Europe also appear to be slightly stronger than was previously assumed. However, the stronger euro may lead to a slightly slower upturn in the euro area. All in all, the picture of international economic activity now looks somewhat brighter than we anticipated in December. The upturn in economic activity appears to be proceeding roughly as we had anticipated it would. The Swedish economy has also turned We assumed in the December Inflation Report that growth in Sweden would gradually increase during the course of 2003 and would amount to 1.5 per cent for the whole year. During 2004 and 2005 growth was expected to be around 2.5 per cent, which is in total a slightly more rapid rate than the Riksbank considers sustainable in the long-term without inflation rising.
But we are under no illusion that, so far at least, we have only skimmed the surface. Skills and time matching There are several obvious frictions in the matching process between volunteers and sociallyworthwhile activities, which potentially reduce the effectiveness of volunteering or the likelihood of it happening in the first place. One is time. It is not surprising that time is the most cited barrier to volunteering (Figure 14). 32 But technology, as in every other aspect of life, can improve the efficiency of matching in ways which can stretch time. We have recently seen the emergence of a number of charities with support what the NCVO have called “micro-volunteering”. For example, “Help from Home” is an initiative to encourage micro-volunteering by allowing people to donate as little as 5 minutes to a worthy cause. For example, you can spend a few minutes describing photos to improve a blind person’s experience of a museum, play an online game in aid of scientific research, or write an email to a sick child. Tasks are given a “pyjama-rating” to drive home the message that it is easy to volunteer. A second friction is appropriately matching the skills of volunteers to those activities where they would be best put to use. PhD economists are no less capable of painting sheds or cleaning riverbeds than the next person. But this is unlikely in general to be the best use of their skills and time, nor the charities.

Thomas Jordan: Switzerland – developments and challenges in 2012 from a monetary policy perspective Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Annual General Meeting of Shareholders of the Swiss National Bank, Berne, 26 April 2013. *  *  *  Mr President of the Bank Council Dear Shareholders Dear Guests Once again, the European financial and debt crisis has dominated events of the past year. And, once again, the Swiss National Bank has been faced with considerable challenges in the conduct of its monetary policy. The crisis in Europe intensified in spring and summer and triggered strong upward pressure on the Swiss franc. This was pressure we had to withstand. In an already fraught global economic environment, an appreciation of the Swiss franc would have caused an inappropriate tightening in monetary conditions for Switzerland. This in turn would have compromised price stability and had potentially serious consequences for the Swiss economy. The SNB therefore enforced the minimum exchange rate of CHF 1.20 per euro with the utmost determination. This called, at times, for a high level of activity on the foreign exchange market on the part of the SNB. The extensive purchases of foreign currency were reflected on our balance sheet. In my remarks today, I would like to start by addressing the key developments and challenges in 2012 from a monetary policy perspective and, at the same time, present you with our assessment of the current year.