samchain/econo-pairs-v1 huggingface dataset:
Yugoslavia, Mexico and Egypt had the advantage of being close to the critical export markets in the developed world. Honduras and Tanzania had precious metal deposits, as did several of the other Latin American and African countries. Singapore had nothing, was over-populated and had high unemployment. Many economists of the day predicted that countries in Latin America and Africa would outgrow over-populated, resource-scarce Asia. The outcome, however, was totally different. Living standards have barely risen in Honduras in the last 40 years, and have declined in Tanzania. Tito's Yugoslavia no longer exists. East Pakistan fought a war with West Pakistan and separated to become Bangladesh. Civil war and internal disorder tore up countries like Liberia, Ethiopia and Uganda. Singapore which was written off by pundits as being not viable without the Malaysian hinterland not only survived but thrived. Its GDP per capita increased more than six-fold, better than any of the other 15 countries represented in my class. Why have the growth experiences of individual countries been so disparate? Some of you might have watched the movie, "The Good, the Bad, and the Ugly", released, coincidentally, exactly 40 years ago. Set during the American Civil War, it was about three bandits who each held one clue to a hidden trove of gold coins. They did not trust each other, and wanted all the money for themselves. In the end, the "Good" bandit who put all the three clues together won.

But the plane, which is well built, will continue on its longhaul journey, with its flight path unchanged. There is consensus amongst leaders from the major political parties on the direction of India's economic reforms. Whichever party is in power will have to deliver the economic goods, which the Indian people deserve and demand. In June last year, India concluded its first comprehensive Free Trade Agreement (FTA) with Singapore. This is a strong signal that India intends to leverage on external economies and open itself  BIS Review 86/2006  3  further. The FTA will also act as the building block for India's comprehensive economic integration with Southeast Asia through the ASEAN-India FTA. Of course, India faces some serious challenges like inadequate infrastructure and rigid labour market. India must also find ways to make the bureaucracy more pro-business, especially towards foreign companies. In addition, India's growth in the last 10 years has been driven by its IT and services industry. But India cannot grow into a major economy on services alone. It will have to expand its manufacturing sector massively. Vietnam Next, Vietnam has grown strongly over the past decade. In the 1980s, there was a paradigm shift in the leadership's thinking. Vietnam implemented economic renovation, or doi moi, and the efforts are bearing fruit. Intel is building a chip plant in Ho Chi Minh city. Singapore, Taiwanese and Korean firms are among the biggest foreign investors in the country. The new generation Vietnamese leadership will press on with reform.
They are regular companies, which lend to firms and households, financed by issuing bonds and short-term commercial paper (CP) rather than by taking deposits. It can be tempting for them to extract a term premium by increasing their maturity mismatch. Some did so during the boom years. In the US and UK during the crisis, alongside the CP market more generally, they were given access by central banks to what in effect were discount-window type liquidity-insurance facilities. It is not obvious to me that they should be regulated as commercial banks, as they do not provide monetary/payments services. But it is clear that this part of the credit system became fragile due to leverage and maturity mismatches. It relied on the CP market remaining open; and thus on money funds maintaining demand for corporate and finance-company CP; and, if that demand dried up, they relied on banks being able and willing to honour the committed lines that underpinned those CP programmes. But for too long and in too many countries, regulation did not adequately capture the associated credit and liquidity risk. The result was a shadow financing (or credit) system that was effectively dependent in adverse circumstances on the banking system, but without the banks being ready and able to support it through systematic stress. 4  There were warnings years ago; for example in Edwards F (1996), “The New Finance: Regulation and Financial Stability”, American Enterprise Institute.

In particular, this is the role of the two new liquidity ratios: –  The one-month liquidity ratio or Liquidity Coverage Ratio (LCR) has the two-fold objective of preventing short-term liquidity shocks and requiring institutions to selfinsure against liquidity shortages in order to limit refinancing exclusively via the central bank. Institutions should in no way consider that they have a guarantee of permanent access to such refinancing. In this respect, the use of foreign currency funding is not always justified by the need to fund assets denominated in these currencies in the absence of a sufficiently broad customer base in the countries concerned. Such strategies are also used for arbitrage purposes. They contribute to overall market liquidity but they must remain of a magnitude that allows institutions to unwind positions in stressed market conditions. However, during complete liquidity dry-ups some institutions became largely dependent on swap lines between central banks, as was the case from the end of 2007 to the start of 2010. It is also clear that the use of swap lines between central banks cannot be considered a natural market adjustment. In this respect, it is advisable for banking supervisors to have indicators that enable them to measure possible foreign currency mismatches, without necessarily imposing a specific currency matching requirement. –  The one-year liquidity ratio or Net Stable Funding Ratio (NSFR), for its part, aims to limit the risk of excessive maturity transformation such as illustrated by the failure of Northern Rock.
On the health front, combating the virus obviously continues to be a priority objective until an effective medical solution has been developed. This may require continuing to adapt the capacity of the health system to ease the effects of the second wave on public health and to manage potential and subsequent fresh outbreaks. At some point further ahead, the objective must be to purchase the necessary doses of the treatment or vaccine, for distribution to the population at large. Beyond the health sphere, the short-term priority must be to continue to support households and firms until a sound and sustained recovery is in place. This is something we will very likely not see until a medical solution is available that will render restrictions on people’s movements and on certain sectors of economic activity unnecessary. Until this is the case, budgetary support for private economic agents is crucial to minimise the risk that the present health and economic crisis may trigger a financial crisis, which would entail much higher and longer lasting costs in terms of production and employment. However, these support measures must now be more selective, concentrated on the population groups and businesses most affected by the crisis, to maximise their effectiveness in a setting in which public funds are necessarily limited. This was the backdrop for the extension of the furlough schemes up to January 2021 agreed between the Government and the social agents.

28  As I said earlier, one of the ingredients of the economic policy response to the crisis has been the temporary suspension of fiscal discipline rules in Europe until the pandemic is over, which is projected to be in 2022. These rules require the structural deficit to be reduced by 0.5 pp each year, so closing the current deficit, which is estimated to be some 5 pp of GDP, would take approximately a decade of adjustment.8  According to the Banco de España’s simulations, using a model that describes the behaviour of the government debt ratio on the basis of certain assumptions regarding its determinants, in the absence of fiscal consolidation measures government debt will reach around 130% of GDP over the next 15 years. Conversely, a process of gradual fiscal consolidation, following the guidelines of the Stability and Growth Pact, as I have described, could significantly moderate the government debt dynamics. In particular, a fiscal policy that improves the primary structural balance by 0.5 pp of GDP per year, until budget balance is achieved, would result in a sustained reduction in the government debt ratio, such that by 2035 it would stand at around its end-2019 level. This consolidation process would be especially effective if it were combined with the implementation of ambitious structural reforms to increase the economy’s potential growth and therefore the size of the main tax bases.
But central banks and, beyond, financial intermediaries cannot substitute for adequate – and sometimes difficult – public policies. The green transition does hold risks – including for inflation –, but it also offers economic and financial opportunities, as new technologies gradually reach scalability. The sooner we start, the more positive (or the less negative) the economic balance will be. 2/ Let me now turn to the second major transformation underway: the digital transformation. Here, Europe is still lagging behind the United States and China. It is of the utmost importance to remain at the technological frontier in order to reap the benefits of innovation in terms of productivity and growth, as the winner often takes all. Beyond the economic fallouts, it is also a matter of strategic autonomy.

These disruptions are also reflected in the monetary, financial and payments spheres – which we scrutinize as central banks and supervisors –, where digitalisation is bringing about a triple revolution – and it is far from over: (i) First, the arrival of new players: new actors born from the tech world – Fintechs and Bigtechs – are challenging historical players with radically new approaches to financial services and at present much less regulation; (ii) Second, the emergence of new assets: crypto-assets from the blockchain universe in the form of tokens: they will not be credible as “crypto-currencies”, but could be used as settlement means – think of stablecoins for instance; (iii) Lastly, the emergence of decentralised market infrastructures: new technologies tend to reduce the use of proven centralised settlement systems. 2/3  BIS central bankers' speeches  These revolutions offer the potential for increased market efficiency while reducing costs and time. But they entail several risks, and they could lead to significant concentration effects among a few dominant private networks: these would in practice “re-intermediate”, but without the trust and regulation associated with the architecture of the monetary and financial edifice that we – public and private players – have built together over a period of decades. In the face of this major challenge, we need to both innovate and regulate.
As a major interface between Europe and the rest of the world I have little doubt that euro-activity in London will mean more rather than less euro activity in other European financial centres like Frankfurt, Paris, Milan, Amsterdam or Copenhagen. And I have little doubt either that what is good for those centres will be good too for the City. Thirdly, and perhaps most fundamentally, the United Kingdom, even while it does not participate in the euro, can contribute to its success by continuing to pursue macro-economic, both fiscal and monetary, discipline in parallel with the euro-area countries. The Government is committed to this course as a matter of national economic self-interest - one of its very first acts in Government for example was to hand operational independence for the conduct of monetary policy to the Bank of England. But these same policies are calculated, too, to make us a more prosperous and active trading partner for Europe as a whole, and to ensure that we do not have any avoidable disruptive effect on the policies or on the economy of the euro participants. More than this they are calculated to foster sustainable economic convergence as the necessary precursor to our eventual adherence to the euro club. And in the meantime the British Government will continue to pursue, and to advocate in the councils of Europe the supply-side flexibility that will be vital to its success.

High productivity growth contributed to low inflation in 2006 Inflation rose last year, but was nevertheless below the 2 per cent target. CPI inflation rose by an average of 1.4 per cent. Underlying inflation, UND1X, was 1.2 per cent. A comparison with our forecasts shows that inflation was lower in 2006 than we had anticipated in 2004. On the other hand we succeeded in predicting last year’s inflation in the forecasts we made in 2005. One reason why inflation has been low in recent years is that prices of imported goods have developed weakly. This is probably linked to stiff international price competitive pressure. Another important reason is that productivity has risen faster than the Riksbank and other forecasters had expected. The unexpectedly high productivity growth has meant that companies have been able to increase production at a rapid rate without costs per unit produced rising to any great extent. Understanding which mechanisms and changes in the economy that lie behind the strong productivity has been, and is, an important task for the Riksbank. Other forecasters have also assumed that companies’ production conditions should have been affected by the various structural changes we have seen acting in the economy over many years now. I am thinking here of phenomena such as globalisation and the rapid development of information technology. Most analysts probably agree that these changes have contributed to increased competitive pressure and that they have enabled production to be made more efficient in several ways.
The IMF has shown that, in all advanced countries, including the United States and the United Kingdom, these losses accounted for around two thirds of the deterioration in fiscal positions observed during the crisis. Fiscal deterioration was compounded, in some countries, by the size of implicit blanket guarantees, which materialized as the crisis unfolded through public money injections in the financial sector. Unfortunately, these problems were not specific to the euro area. Public debt jumped by around 30% of GDP in the United Kingdom and in the United Kingdom. Structural deficits in these countries stand at similar or higher levels than those in most parts of the euro area. This is also true for Japan. Overall, the crisis has brought to light major deficiencies in the implementation of fiscal discipline and, more generally, in the economic governance of the euro area. The founders of the euro had put in place the Growth and Stability Pact. The principles were sound. The framework was adequate. The implementation has been extremely weak. Bluntly speaking, peer pressure failed to ensure consistent and rigorous compliance with the principles which had been agreed upon. It was, and remains necessary to make a “quantum leap” in economic governance. 2  BIS central bankers’ speeches  What have we done? Governments are addressing these deficiencies. Significant progress has been made over the past year. At the national level, all Member States have embarked upon credible public finance consolidation plans that are already bearing fruit.

If we look beyond uncertainties, we have also received positive news; in particular, recovery is underway in Europe. As you may know, a meeting of the ECB Governing Council will be held in three days, so I have to respect a silent period and I will not speak on monetary policy matters. But I can emphasize that, in response to weak inflation and heightened uncertainties, the Eurosystem, of which the Banque de France is a member, has acted decisively. In addition, several European countries have implemented structural reforms since the onset of the crisis and, at the same time, the EU and the euro area have taken significant steps to enhance economic and financial integration and stability. All these efforts have strengthened the euro area’s resilience as shown by limited reactions to Brexit or the US elections or by the unaffected, steady recovery in the euro area. 1/ Changes in economic conditions [Slide 2] In Europe, economic recovery is underway. Europe is continuing to recover, at 1.7% in 2016, and is expected to carry on recovering in 2017. Euro area growth is robust since it is supported by domestic demand, i.e. household consumption and corporate investment. New more detailed euro area growth and inflation projections will be published on 8 December. It is particularly important to note that labour market conditions are improving and unemployment is receding. In the euro area, on the past 4 years, the unemployment rate has dropped from 13% to 9.8% last October and is at its lowest level in four years.
Consider rule setting and reporting. At over 638,000 words, the PRA Rule Book is longer than War and Peace. It is also somewhat less interesting and infinitely more complex. We are currently using advanced analytics to understand the complexity and interconnectedness of the PRA rulebook, to identify ways to simplify our rules, and to make compliance with them easier for firms. And to explore ways to make reporting more efficient and effective, we are running a Digital Regulatory Reporting pilot, with the FCA, on machine readable reporting requirements that firms’ systems could interpret and ultimately automate regulatory data collection. These initiatives are goods in and of themselves, but they also create the potential to unlock the power of AI in order to improve the quality of our supervision. Conclusion  When Keynes marvelled at new possibilities, a decade of wealth creation would follow, but its gains gave rise to imbalances in incomes and in trade. When combined with the Economic Consequences of the Peace, disaster ensued. Today, new technologies, the new economy and the new finance have the potential to unlock more sustainable and inclusive growth. Consumers can have greater choice and better-targeted services; small and medium sized businesses can access new credit to grow; banks themselves can become more productive, and the financial system overall can become more resilient. Most fundamentally, unlike in Keynes’ time, the gains from new technologies will not be limited to men or captured by denizens of the City. 6  Proudman, J (2018) Cyborg Supervision. Available https://www.bankofengland.co.uk/speech/2018/james-proudman-cyborgsupervision.

Indeed, some central banks have adopted interest rate guidance announcements covering the next two years. It is likely that monetary policy will, for some time, make use of a diversity of instruments. Macro-prudential measures will interact with monetary policies in a complex way. In that context, it is therefore all the more important to keep clarity of purpose and stick to two crucial features inherited from the pre-crisis consensus: the focus on price stability and, its corollary, central bank independence. There should be no ambiguity about what central banks are trying to achieve. The more non-conventional their actions, the less obscurity there should be as to their ultimate purpose. Non-conventional measures, like any others, can only achieve their objectives if inflation expectations are solidly and clearly anchored. From that point of view, calls by some economists and market participants for a temporary relaxation of price stability objectives  2  BIS central bankers’ speeches  are, in my view, totally misguided. I find it significant, on the contrary, that two major central banks have recently decided to quantify their price stability objectives and enhance their communication accordingly. BIS central bankers’ speeches  3
To build confidence in the Bank over time, the central bank must manage this form of autonomy in a sound manner. I have emphasised the importance of an efficiently run central bank that concentrates on core tasks. Over the past 10–12 years, the number of central banking staff in Norges Bank has been reduced from 1200 to 300 (see Chart 1). This is an adequate staff level. We no longer produce statistics, and we are no longer a manufacturing enterprise. We issue the currency, but we do not print banknotes or mint coins. The distribution of money has been taken over by private business. 1  Lecture at Norwegian Polytechnic Society, Oslo 17 September 1985. Published in Economic Bulletin No. 3, 1985. BIS Review 154/2010  1  As a result, we have been able to reduce the Bank’s operating costs by about NOK 600 million per year, measured at constant prices. At the same time, the Bank’s equity capital has increased more than twofold and now stands at close to NOK 70 billion (see Chart 2). The central bank’s formal independence must be supported by a solid capital base. 2  The objectives pursued by the central bank are for the common good. The objective of monetary policy has always been determined by the government and the Storting (Norwegian parliament) and was for a long period set out in an Act. Norges Bank has issued notes and coin throughout its history, for the first hundred years based on the silver or gold standard.

The Board of Directors believes that we have apparently not yet tightened monetary conditions to the extent needed to bring inflation back to the target next year. Therefore, we hold open the prospect of a further key rate increase at the upcoming meetings. Nonetheless, the situation might change. At the next meeting, we will consider how our today’s and earlier decisions, given the time lags, influence monetary conditions, among other factors. We will take into account that, even with the key rate unchanged, monetary conditions might toughen if inflation and inflation expectations go down. At our core meeting in February, we will adjust the range of the key rate forecast and the medium-term forecast in general. 3/4  BIS central bankers' speeches  Thank you for attention. 4/4  BIS central bankers' speeches