samchain/econo-pairs-v1 huggingface dataset:
In the early phases of the upturn, output growth primarily reflected a strong increase in the number of person-hours worked partly owing to the marked increase in average working hours when sickness absence fell in 2004. A high level of inward labour migration after EU enlargement in 2004 also contributed to increasing economic capacity. Historically, there has been a close relationship between the change in prices for domestically produced goods and services and the level of capacity utilisation, here measured by the output gap. This relationship broke down in 2006. Surprisingly low inflation through 2006, despite appreciably stronger output and employment growth, may indicate that developments have been influenced by conditions on the production and supply side of the economy. The present economic expansion differs from previous upturns in that inflation has remained low so far despite strong growth and increasing capacity utilisation. There are probably several reasons for this. First, low import prices and high prices for our commodity exports have improved Norway’s terms of trade considerably. Prices for oil and gas, shipping, fish, industrial commodities and engineering products have increased considerably. Moreover, Norwegian importers have gained access to new markets in central Europe and Asia which offer considerably cheaper consumer goods. The terms of trade have improved by about 40 per cent since 2002. A similar situation has not been seen since World War I when earnings in the shipping industry and other export industries were exceptionally high for a period. Second, an ample supply of labour has boosted output growth.

It would also mean that the Swedish payment infrastructure is to a greater extent harmonised with the rest of the EU, which can increase competition and the quality of the payment services offered to Swedish customers. RIX plays a central role in the Swedish payment system The payment system the Riksbank currently supplies to financial institutions is called RIX. Institutions wishing to become participants in RIX enter into an agreement with the Riksbank. The Riksbank is a public institution, which means that entry to the RIX system is given on competitively neutral terms to institutions meeting the conditions that are set. It is difficult to overestimate the importance of RIX for the Swedish economy. From the time that RIX opens at 0700 hours on a typical working day until it closes at 1700 hours, a good 20,000 payments are settled to a total value of more than  2 According to the international standards on financial infrastructure issued by the CPMI-IOSCO, systemically im-  portant infrastructures should settle in central bank money whenever it is practically possible. 3 The Eurosystem consists of the European Central Bank and the national central banks in the euro area. 2 [8]  SEK 600 billion.4 RIX is the hub of the Swedish payment system and it is therefore also logical that the functions and accessibility of RIX will be in focus when the Riksbank upgrades its capacity to meet the challenges of the future payment market. The Riksbank is not in any unique situation in this respect.
Widespread consultation would be needed, and due account taken of confidentiality rules, before any reporting framework can be implemented.”  7  See Communique Meeting of Finance Ministers and Central Bank Governors Washington, DC, April 18–19, 2013 “We also call for a feasibility study on how information from trade repositories can be aggregated and shared among authorities, so as to enable comprehensive monitoring of risks to financial stability.”  8  See CPSS / IOSCO. Report on OTC Derivatives Data Repository and Aggregation Requirements. January 2012. BIS central bankers’ speeches  7  The goal of financial stability will remain elusive so long as we have financial firms that are judged as “too big to fail.” Some might argue that this is reason enough to break up these firms. I do not believe that this is the best course of action. As I have outlined here today, I prefer a multi-faceted approach that strives to: (1) minimize the risk that a large complex financial firm faces default, (2) have in place a credible resolution regime if a default becomes imminent, (3) improve the resiliency of our financial system so that any shocks resulting from a resolution are not amplified across the system, and (4) build out a global data model for effectively monitoring global financial markets.

As an example, an increasing number of trade repositories are collecting valuable transaction data. However, the full benefit of these data can only be realized if we can aggregate this information across the trade repositories, and if regulators have access to the data needed to support their respective mandates.7 The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have produced an analysis of some of the foundational steps that need to be taken.8 Again, implementing these steps will take time and will need our continued attention. 5  See FSB and IMF (2009) The Financial Crisis and Information Gaps. Report to the G-20 Finance Ministers and Central Bank Governors. 6  FSB and IMF (2009), recommendation no. 9: “The FSB, in close consultation with the IMF, to convene relevant central banks, national supervisors, and other international financial institutions, to develop by end 2010 a common draft template for systemically important global financial institutions for the purpose of better understanding the exposures of these institutions to different financial sectors and national markets. This work should be undertaken in concert with related work on the systemic importance of financial institutions.
In other cases, uncertainty about the possible consequences of Year 2000 disruptions could lead to over-reactions on the part of market participants. As supervisors, we will need to be increasingly alert to the possibility of Year 2000 rumors affecting the liquidity of firms during the latter half of 1999, and should support the disclosure of accurate information in response. The Basle Committee’s Year 2000 Task Force will be developing a contingency planning document focused on issues relevant for bank supervisors. I am pleased to see that the Joint Year 2000 Council also has formed a sub-group to address contingency issues, including sound practices for financial institution contingency planning as well as market-wide aspects. As I see it, there are three broad areas to consider in developing contingency plans. First, each firm should have a contingency plan that covers business continuity issues in the case of operational problems affecting its own systems. Institutions also should develop contingency plans that would help address Year 2000 problems arising from their vendors or customers, or as a result of disruptions to public infrastructure. These plans should seek to assess the risks that firms face in each instance and should focus on the possible measures that may be available to mitigate those risks. Second, supervisors and regulators need to develop their own contingency plans for how they will deal with problems affecting them or the institutions under their jurisdiction. Most organizations have some experience in contingency planning for various types of market disruptions, so this will not be entirely new ground.

In this new world, phenomena which had traditionally a local or even a national impact may be amplified and become dangerous at the global level: amplification of financial cycles, herd behaviour, global contagion. Analysing the opportunities and the risks, and understanding the functioning of our system with a view to making it as stable as possible is a very exiting, ambitious and urgent task. And, last but not least, union. I can not avoid mentioning the question of completing monetary union with the entry of the United Kingdom. I would like to stress the following points in this regard: let us never forget that the UK is unanimously warmly welcomed in the euro area. It depends only on the decision of the British people and of the British authorities to join in. You know that the Germans and the French on the continent, as well as all other nations on the continent are very warmly hoping for a positive decision by the UK. I thank you for your attention. BIS Review 60/2002  5
Unemployment rate in different counties, Q1 1990, Q1 1993 and Q1 2002 Per cent  14  14 Q1 1990  12 10  Q1 1993 Q1 2002  12 10  Q1 2002 for the hole economy 8  6  6  4  4  2  2  0  0  St oc kh ol m U pp Sö sa de la rm an Ö la st nd er gö tl Jö and nk öp in Kr on g ob er g Ka lm ar G ot la nd Bl ek in ge Sk ån e Vä H al st la ra nd G öt al a Vä nd rm la nd Ö re Vä br st o m an la nd D al ar na G äv Vä le bo st er r no g rrl an d Jä m tla Vä nd st er bo tt N or en rb ot te n  8  Source: Statistics Sweden (Labour Force Surveys)  BIS Review 40/2002  9

36 The inflation target was finally formalised in a new regulation on monetary policy in 2001, a good eleven years after New Zealand, nine years after the United Kingdom and eight years after Sweden. The mandate for Norges Bank states that monetary policy shall, in addition to securing price stability, contribute to stabilising output and employment. It is possible to give weight to cyclical fluctuations in interest rate setting, and to new information, as long as there is confidence that inflation remains near the target. The central bank’s announced interest rate strategy ahead will be adjusted as new information emerges. This stands in contrast to the parity system, which was more rigid. The authorities cannot systematically allow policy to be more expansionary than announced to bring down unemployment. As Kydland and Prescott demonstrated, this would lead to  33  Another difference is that under parity policy the authorities stabilised the price of gold and not the price of a basket of representative goods – the consumer price index. Today, stabilisation of the consumer price index would be described as price level targeting. Inflation targeting, on the other hand, implies stabilisation of changes in the consumer price index. There is also a difference in that there is no longer any redemption obligation. Confidence is not based on gold reserves, but more generally on responsible economic policy as a basis for achieving the inflation target through the active use of the interest rate.
Writing back in 1848, John Stuart Mill captured well the societal benefits of diversity: 15 “It is hardly possible to overrate the value, in the present low state of human improvement, of placing human beings in contact with persons dissimilar to themselves, and with modes of thought and action unlike those with which they are familiar…Such communication has always been, and is peculiarly in the present age, one of the primary sources of progress” More recently, Scott Page (2011) has encapsulated the positive social externality of diversity more formally. Economists love an equation, so here is one: Collective Ability = Individual Ability + Diversity Recent evidence, drawn from a range of disciplines and settings, has tended to confirm Mill and Page’s conjectures. Diversity generates a positive social externality, helping the collective far exceed the sum of its individual parts. Diversity is synergy. This has been found at almost every scale of social grouping, from small communities and organisations, to large economies and nation states. The benefits have been found, too, in non-social settings, such as ecological and logistical systems. 16 One channel through which diversity may improve societal outcomes is by fostering innovation and creativity. If different raw ingredients are added to the intellectual melting pot, the final dish is likely to be richer and more innovative. 17 Psychologists believe that divergent thinking is the cradle of creativity. That is why creativity is often found to be greatest among very young children whose thinking is unconstrained by convention.

So too, arguably, did a lack of gender diversity. 35 And a lack of diversity within the financial eco-system – with many institutions holding very similar portfolios – fed and watered these seeds. This lack of diversity, intellectual and financial, contributed significantly to the depth and severity of the crisis. 36 This old lesson from evolutionary biology and systems theory was learned painfully and abruptly by policymakers and practitioners in 2008. What applies at the level of institutions and systems may also apply at the level of nation states. Democracy can be thought of as a sociological mechanism for maximising the diversity of decision-making. By design, it leans against the hubris bias of autocracy or monarchy while reducing the groupthink bias of single-party rule. As synergy is diversity, so too is democracy. And for the same reasons as among institutions and eco-systems, democracy has also been found to make for more robust decision-making. 37 So much for the benefits. None of this is to say that diversity is costless. History is littered with examples of the problems associated with integrating and assimilating diverse peoples. Several recent empirical studies have corroborated those perceptions, again at both the micro and macro scale. For example, there is evidence that diversity in the workplace may sometimes lower employee morale and job performance. 38 And there is evidence that racially diverse communities have fewer social interactions and thus are associated with lower levels of trust.
CPI and Growth) That Sweden in the 1970s and 1980s lost so much ground in terms of prosperity in relation to many other European countries is certainly due in part to the stabilisation policy then being conducted. Prices and wages were allowed to drive each other up, while budget policy was far too weak. Devaluation followed devaluation, with low investment and weak productivity growth as the result. BIS Review 14/1998  -2-  High inflation also leads to arbitrary changes in the distribution of income and wealth in society. Wages and profits normally rise at the same rate as inflation. The value of real estate and some financial investments rises even faster. At the same time nominal fixed interest rates and transfers lag behind. The high profits made by the owners of houses and co-operatives in the 1970s and 1980s occurred in practice at the expense of tenants and those with bank savings. Between 1971 and 1974, for example, house prices rose by 50 per cent and agricultural property by 80 per cent. In contrast those who had their savings in bonds or in the bank saw their assets shrink by about a third in real terms.

When this is carefully done the Riksbank – say some of the critics – can use the expected higher inflation (that we ourselves have created) as an argument for making the interest rate increases we have wanted to make all along. This type of criticism was common last autumn, for example, when the BIS Review 14/1998  -8-  Riksbank spoke in various connections about its inflation outlook and explained that interest rate increases might be necessary. I have the following answer to these criticisms. To begin with, the Riksbank’s focus on inflation developments is entirely natural. It is undoubtedly our task to show clearly the reasons for our decisions. Without a candid accounting of monetary policy from the Riksbank’s perspective it would be more difficult for the political decision-makers and the general public to evaluate monetary policy and our fulfilment of our objective. Think what type of debate we would have and how monetary policy would be seen if the Riksbank only made its decisions without commenting at all on the outlook for inflation and without giving reasons for its policies. Thus the need for the Riksbank to speak about inflation is obvious. Naturally it cannot be ruled out that in doing so it will influence households and businesses in their views on price developments, however our influence should not be exaggerated. The cause-and-effect relationship is rather the reverse: the Riksbank reacts to inflationary developments, which in turn are determined by a great number of decisions by businesses and households.
Reports from the Bank’s regional Agents indicated that business sentiment had deteriorated sharply, and the CBI October Industrial Trends Survey showed that optimism about business conditions among manufacturers fell to its lowest level since 1980. The possibility of a recession was widely discussed. The MPC responded to the change in sentiment and to worsening conditions in the world economy. It reduced interest rates by 2½ percentage points between October 1998 and June 1999. There has been a marked turn around in sentiment during this year. Confidence measures have returned to their pre-October 1998 levels. This volatility in sentiment, is not reflected in the statistics on economic growth. The latest estimates of output for the UK show that over the past two years, output growth has been steady and close to trend with the exception of two quarters (1998 Q4 and 1999 Q1) during which a run down in stocks temporarily reduced growth. In part this stability was the result of pre-emptive monetary policy which, by reacting to the forward-looking information in surveys and other data, was able to offset the volatility in confidence feeding through to the real economy. For sometime now, the high level of sterling together with falling world commodity and food prices have restrained retail price inflation. The prices of imports into the UK fell by 15% in the past four years. It is inevitable that this favourable impact on inflation can be only temporary.

In 2022, Norges Bank decided to raise the countercyclical capital buffer rate for banks to 2.5 percent, effective from March 2023, which brings the rate back to its pre-pandemic level. Norges Bank continuously and closely monitors financial market developments and has a contingency framework for taking measures required to safeguard financial stability if needed. Let me conclude. The current high rate of inflation follows a long period of low and stable inflation in our part of the world. Some of the driving forces that kept inflation low in the decades before the pandemic may be going into reverse. Globalisation has been met with gradually growing opposition. Demographic trends are changing. Combined, this could make the job of keeping inflation low more demanding. 4/5  BIS - Central bankers' speeches  The global economy will increasingly be impacted by climate change and the need to reduce emissions. Understanding the economic effects of climate change and the energy transition is essential for making forecasts and the right trade-offs in the conduct of monetary policy. This is therefore defined as a focus area in Norges Bank's Strategy 2025. The main contribution monetary policy can make to the transition is to ensure low and stable inflation. A flexible and forward-looking inflation targeting regime, where we look through short-term inflation fluctuations, is a good basis for addressing the structural changes we are facing. A small open economy like Norway will be exposed to shocks, as we have acutely experienced in recent years.
1)  𝑦1 = 𝐸1𝑃𝑆 𝑦2 − 𝜎(𝑖1 − 𝐸1𝑃𝑆 𝜋2 + 𝜔𝑠1 )  IS curve  2)  𝜋1 = 𝜅𝑦1 + 𝐸1𝑃𝑆 𝜋2 + 𝜈𝑠1  Phillips curve  3)  𝑠1 = 𝜓𝑘1  Banking sector credit spreads  4)  𝐵1𝐵 = 𝜙0 + 𝜙𝑖 𝑖1 + 𝜙𝑠𝐵 𝑠1 + 𝜉1𝐵  Banking sector real credit growth  5)  𝐵1𝑀 = 𝜙0 + 𝜙𝑖 𝑖1 + 𝜙𝑠𝑀 𝑠1 + 𝜉1𝑀  Market based sector real credit growth  6)  𝛾1𝐵 = (1 + (𝑒𝑥𝑝(ℎ0 + ℎ𝐵 𝐵1𝐵 + ℎ𝑘 𝑘1 ))−1 )−1  Banking sector crisis probability  7)  𝛾1𝑀 = (1 + (𝑒𝑥𝑝(ℎ0 + ℎ𝐵 𝐵1𝑀 ))−1 )−1  Market-based sector crisis probability  8)  𝛾1 = 𝑏𝛾1𝐵 + (1 − 𝑏)𝛾1𝑀  Total crisis probability  The IS and Phillips curves determine, respectively, output (𝑦1 ) and inflation (𝜋1 ), as functions of current and expected future output and inflation  17  and the policy interest rate (𝑖1 ). Output and inflation also depend on  banking sector credit spreads (𝑠1 ). Spreads push down on aggregate demand in the IS curve by increasing the interest facing borrowers in the economy. They also have a negative near-term effect on aggregate supply, raising inflation for a given level of output via an endogenous cost-push mechanism in the Phillips Curve.

The solution is the Nash equilibrium policy setting for the four policy instruments. 14  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  14  References Aikman, D, Giese, J, Kapadia, S and McLeay, M (forthcoming), “Targeting Financial Stability: Macroprudential or Monetary Policy?” Aiyar, S, Calomiris, C and Wieladek, T (2014), “Does Macro-Prudential Regulation Leak? Evidence from a UK Policy Experiment”, Journal of Money, Credit and Banking, 46(1): 181–214 Ajello, A, Laubach, T, Lopez-Salido, D and Nakata, T (2016), “Financial Stability and Optimal Interest Rate Policy”, Finance and Economics Discussion Series 2016-067. Washington: Board of Governors of the Federal Reserve System. Berrospide, J, Correa, R, Goldberg, L, and Niepmann, F (2016) “International Banking and Cross-Border Effects of Regulation: Lessons from the United States”, Board of Governors of the Federal Reserve System International Finance Discussion Papers No. 1180. Brooke, M, Bush, O, Edwards, R, Ellis, J, Francis, B, Harimohan, R, Neiss, K and Siegert, C (2015), “Measuring the macroeconomic costs and benefits of higher UK bank capital requirements”, Bank of England Financial Stability Paper No. 35. Bush, O, ‘Keynes, Kant and Capital Flows’, The World Financial Review. Cerutti, E, Claessens, S and Laeven, L (2015) “The Use and Effectiveness of Macroprudential Policies: New Evidence”, IMF Working Paper No.15/61. Cesa-Bianchi, A, Eguren Martin, F and Thwaites, G (forthcoming), “Foreign Booms, Domestic Busts: The Global Dimension of Banking Crises” Drehmann, M, Borio, C and Tsatsaronis, K (2011), “Anchoring Countercyclical Capital Buffers: The Role of Credit Aggregates”, International Journal of Central Banking 7(4): 189–240.
The only exception from the pattern is Slovenia, where the costs of government borrowing went on a rising track in the period of 2011-2013, reflecting the banking system crisis and the adverse feedback loop to the sovereign segment. The average long-term interest rate in the 2008-2012 equaled close to 7%, and declined to an average of 3.7% in the 2013-2015 period, which is an adjustment of around 3 p.p. Also, the spread of the interest rates of countries in the region relative to the interest rate of Germany, as a risk-free anchoring rate, followed a declining path, and hence more favorable conditions to borrow. Some of the simple indicators for the fiscal space, like the interest rate – growth differential, although improved compared to the acute phase of the crisis, still is less favorable relative to the precrisis period.

Chart 10: External positions and assets prices indicators y/y growth rates of stock market indices  Current account deficit in % of GDP Region  CEE  SEE  SRB  Baltics  ROM  HUN  CRO  MKD  BIH  SLO  BUL  POL  15.0  5  10.0 0 5.0 -5  0.0 -5.0  -10  -10.0 -15  -15.0 -20.0  -20 2007-2004  2012-2007  2015-2013  -25.0  AVERAGE(2009-2012)  -25  IIP, net as % of GDP Region  CEE  AVERAGE(2013-2016)  Real Estate Prices, y/y change in % SEE  Baltics  0  BUL  CZR  EST  CRO  LAT  LIT  HUN  POL  ROM  SLO  MKD  SRB  12  -10  10 8  -20  6 -30  4 2  -40  0 -50  -2 -4  -60  -6 -8  -70 2007-2004  2012-2008  2015-2013  average 2010-2013  average 2014-2016  Source: International Monetary Fund, Balance of Payments Statistics, WEO October 2016 Database, Eurostat. Despite the absence of sizable inflows, relatively high external financial exposure of the region underlines the risks in case of global tightening of the financial conditions in the context of tightening of the US monetary policy or a “surprise” tapering by ECB.