samchain/econo-pairs-v1 huggingface dataset:
In the 1980s and 1990s, Malaysia and Thailand sought to emulate the export-oriented success of the “tiger economies” while China and India pursued market-oriented reforms and opened up their economies to international trade. After the shock of the Asian crisis in the late 1990s, strong growth continued in the 2000s with China emerging as a major global economic and industrial power. We are now in a third phase of rapid economic growth in Asia in which there is more emphasis on the growth of domestic demand and self-sustaining growth, particularly in the larger economies in the region. With an expanding middle class and rising living standards,  1  See, for example, Maddison (2007). 2  See World Bank (1993) for a detailed analysis. BIS central bankers’ speeches  3  domestic consumer demand can provide a much stronger engine of growth. And a number of Asian economies – including China – are also investing heavily in public infrastructure. The sharp fall-off in export markets in the recent global recession has given added impetus to the desire to expand domestic demand and this provided an important platform for the recovery of Asian economies from the global recession.

Chart 3 – Shares of world GDP and population 2010 figures  GDP at market prices  EU-27, 26%  US, 23%  Apac G10*, 27%  Other, 24%  Population  Apac G10*, 46%  EU-27, 7% US, 5%  Other, 43%  *: Apac G10: Asia-Pacific G10, including Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan Province of China and Thailand. Source: IMF World Economic Outlook, World Bank and Eurostat. The pattern of the past thirty years has, therefore, been of a successful Asian model of development spreading out and encompassing a wider range of countries with larger populations and becoming more self-sustaining. The most likely scenario is that this pattern will continue over the next 20–30 years as the strong economic fundamentals which have supported high rates of growth in recent decades continue to enable productivity levels and living standards to catch up with the West. As chart 3 shows, the ten leading economies in the Asia-Pacific region are home to nearly half of the world’s population. And yet they still account for only just over a quarter of world GDP. This shortfall largely reflects the relatively low average living standards in India and China, which together account for over a third of the world’s population.
Financial institutions must be well-managed. Governance structures need to be in place to establish the appropriate decision-making processes, behaviors and incentives within these organizations. •  And, third, complexity. Financial institutions must become less complex. This objective speaks to the need to reduce the level of interconnectedness among large financial firms and to ensure that there are credible mechanisms for resolving even the largest firms without causing systemic disruption across the financial system. BIS central bankers’ speeches  1  Resiliency Much has been said about the U.S. and international set of regulatory reforms aimed at making global banking organizations more resilient – particularly in the areas of capital and liquidity. The importance of robust capital requirements for financial stability and the serious shortcomings of the pre-crisis regulatory capital regime have been well documented. A lot of work has been done on the capital front through a range of both domestic and international efforts. These efforts have addressed – in most cases – both the quantitative and qualitative elements of capital, and have also addressed the important management processes around capital. The Basel standards – and resulting U.S. regulation – address both the quantity and quality of capital and raise the bar on both elements for large firms. As well, the new capital rules will also require a capital buffer that increases with a firm’s size, complexity, interconnectedness and global footprint. Implementation of these new standards should significantly increase the safety and soundness of the financial system.

Implicit in these observations are strong forces pulling in different directions in the monetary and financial system on the Mainland, all with implications for monetary and financial stability, not just on the Mainland, but also for Hong Kong, being so close to and so integrated with the Mainland. There is great emphasis on controllability, gradualism and the ability to take initiatives in the reform and liberalisation of the Mainland, all in the context of the building of a socialist, market economy. I have no doubt that the Mainland authorities will be able to steer the right course through this potent scenario on the monetary and financial fronts, and avoid mishaps. One can therefore be optimistic about Hong Kong, as the international financial centre of the country, continuing to benefit from monetary and financial developments on the Mainland, although we should not forget that in the capitalist, free market environment that we are in, there is a possibility of market volatility or adjustment being magnified. The task is for all concerned to ensure that they are in a position to cope  4  BIS Review 139/2007  with magnified volatility, in other words, manage market risks that may be greater than what they have seen in the past. The linked exchange rate system Let me turn to the THIRD and last issue that I wish to cover this evening. This concerns our own exchange rate system.
Although they may amount to just a single krona or even less per transaction, the savings add up to a large amount because of all the payments that are required in a modern economy. Economies and greater efficiency have featured prominently in the banks’ activities in recent years. For the authorities it is always important to consider the conditions for competition and balance them against the forces for efficiency, such as economies of scale. It is also important to monitor developments to ensure that levels of risk do not rise again. Moreover, the Riksbank has been and is a major player in the payment system. We must also scrutinise this activity continuously to ensure that our approach does not impair economic efficiency in general. 6  BIS Review 53/2003  From what I have said about the future work it is hopefully clear that the financial markets are changing rapidly and present a development that is exciting in many ways. The Riksbank will continue to be a central player in this work. Talking about such issues feels natural at a university. Perhaps I have even succeeded in inspiring some of you to become involved in questions such as these and contribute to future developments. Thank you. BIS Review 53/2003  7

With the introduction of changes in the Board of Investment’s criteria for investment privileges, the government has geared up its effort in promoting high value added industries. It also announced Special Economic Zones in order to facilitate the growing networks of production, trade, and services initially with our neighboring countries. By expediting growth-enhancing infrastructure development and increasing ease of doing businesses, the government also helps promote crowding-in of private investment. Fiscal reforms are also in the pipeline in order to boost efficiency of the public spending, revenue collection, and other public administration. Reforms of state enterprises will also be vital to upgrading the country’s growth potential as they manage strategic assets of the country, and account for a large share of public capital expenditure. All in all, our car needs an engine overhaul. The government’s recent initiatives form an important part to uplift the car’s engine. In the meantime, I can assure you that we have a good suspension system to get through a bumpy road of market volatility ahead. Ladies and gentlemen, At this juncture – during which Thailand is going through multi-dimensional reforms – the Bank of Thailand will do our part to safeguard stability, support the economic recovery, and facilitate long-term structural reforms. 1  4  El-Erian, Mohamed A. “Navigating the New Normal in Industrial Countries.” Per Jacobsson Foundation Lecture. 10 Oct. 2010. Web. <https://www.imf.org/external/np/speeches/2010/101010.htm#P12_100>. BIS central bankers’ speeches  There are three main elements of our policy navigation that I would like to share with you this morning.
Above all, it would mean that individual countries were not forced to pay large compensation amounts to depositors in other countries. I am aware that this type of suggestion is far-reaching and controversial. It would mean a transfer of power from the member states to the EU. But the suggested arrangements would only apply to the banks conducting cross-border operations of sufficiently large scope to warrant EU-wide measures. The main advantage of such a “supranational” arrangement is that the public frameworks for regulation, supervision and crisis management can correspond to the actual structure of the financial market. When supervision and crisis management are centralised, this also creates the conditions for reducing the administrative burdens on the banks and at the same time managing the risks where they actually arise. Both the banks and the individual countries would be the winners in such a system. Conclusion My main message today has been that financial integration is increasing rapidly in Europe, and that this leads to better conditions for economic growth, but that it also means that regulations, supervision and arrangements for crisis management must become more international. Financial integration provides us with a number of new challenges and we must work together to find solutions to the problems that arise. Thank you! 4  BIS Review 38/2007

That’s because it’s the job of policy to respond to things that are unpredictable, in order to offset their effects, as best we can. So even if it’s the MPC that sets interest rates, in some narrow sense, it’s ultimately the economy that determines them. And our forecasts are intended not as some reliable guide of a particular policy path, but to help people understand how we see the nature and distribution of economic risks over the future. 1  Broadbent (2014). BIS central bankers’ speeches  5  Chart 3 Policy decisions better correlated with economic growth  Chart 4 Controlling for growth, IR forecasts uninformative about policy  Source: ONS, CBI, Markit Economics, Bank calculations. Source: ONS, CBI, Markit Economics, Bank calculations. The “excess” volatility of bond yields One way to think about the unpredictability of the future is to look at financial markets. Prices of financial assets are in many ways the embodiment of forecasts: they depend critically on how people think the future will evolve. So every time the price of an asset changes, someone’s forecast has gone wrong, or at least has had to be revised 2. And as you know, asset prices change a lot! In fact, if anything, as the economist Robert Shiller observed many years ago 3, they appear to move too much.
32  All speeches are available online at www.bankofengland.co.uk/speeches  32  Table 3: Regressions of labour share on UK-listed firms’ mark-ups Log labour share  Log labour share  Log labour share  Log mark-up  -0.094*** (0.019)  -0.093*** (0.024)  -0.067*** (0.020)  Log mark-up squared  -0.024 (0.019)  Concentration Log mark-up * concentration (interaction term)  -0.033 (0.020) 0.061 (0.074)  0.062 (0.073)  -0.225 (0.151)  -0.233 (0.151)  Firm fixed effects  Yes  Yes  Yes  Time fixed effects  Yes  Yes  Yes  N  21997  17218  17218  0.013  0.014  0.015  R  2  Sources: Thomson Reuters Worldscope and Bank calculations. Notes: Standard errors in parentheses; * p < 0.10; ** p < 0.05; ***p < 0.01 Labour share defined as nominal wage bill divided by nominal value-added, where value-added is defined as the sum of operating income (before depreciation, depletion and amortisation costs) and labour expenses. To deal with outliers, we trim observations where the measured labour share is less than zero or greater than one before running regressions. 33  All speeches are available online at www.bankofengland.co.uk/speeches  33  Chart 13: Impact of mark-up shock on annual inflation, output gap and policy rate Annual inflation:  Output gap:  34  All speeches are available online at www.bankofengland.co.uk/speeches  34  Policy rate:  Sources: Bank calculations. Notes: COMPASS contains various mark-ups shocks. For simplicity, the shock shown here is the value-added mark-up shock.

More precisely, whilst 𝜔𝑖𝑡 is unobserved to the econometrician directly, it is assumed to consist of two components: a part that’s observable to the firm (but not to the econometrician) and a part that’s unanticipated to the firm itself when it makes its input demand choices. The key identifying assumption is that we can express 𝜔𝑖𝑡 as a function of inputs (one of which is a so-called control variable, in our case COGS), i.e. 𝜔𝑖𝑡 = ℎ(𝑣𝑖𝑡 , 𝑘𝑖𝑡 ). We don’t know what ℎ(⋅) is, but we can approximate it as a high-order polynomial (in our case, of order 2). The estimation approach, which we run separately for all observations in a given 2-digit industry since 𝜷𝑗 are assumed to be industry-specific, relies on two stages: 2 First stage: In the first stage, we run a regression of 𝑦𝑖𝑗𝑡 on 𝑣𝑖𝑡 , 𝑣𝑖𝑡2 , 𝑘𝑖𝑡 , 𝑘𝑖𝑡 , and 𝑣𝑖𝑡 𝑘𝑖𝑡 . Note that – to the extent  that 𝜔𝑖𝑡 depends linearly on 𝑣𝑖𝑡 and 𝑘𝑖𝑡 – the estimated coefficients on these two variables will subsume the coefficients corresponding to these inputs and how 𝜔𝑖𝑡 depends on them. This step allows us to control for unobserved productivity (up to our approximation) and obtain an estimate of expected output, 𝑦̂𝑖𝑗𝑡 , and an estimate of the measurement error, 𝜖̂𝑖𝑡 . Since we have arguably controlled for unobserved productivity, our 𝑦̂𝑖𝑗𝑡 should be a consistent estimate of 𝐸(𝑦𝑖𝑗𝑡 ).
The constraints imposed by such a financial infrastructure, and the inadequacies and inefficiencies attendant thereto, provide key justification for the development of the capital market which will play the lead role for mobilizing domestic and foreign investment, as well as engendering low cost, efficient, financial intermediation. While in our financial sector development we have taken steps to improve the payments system, supervision of banks, strengthening their capital base, and enhancing efficiency in general, we have also put strong emphasis on ensuring the emergence of a comprehensive financial sector, that will meet the demands of an emerging market economy such as ours. BIS Review 107/2007  1  In the process of developing the capital market, we have worked with private sector and external development partners, especially the First Initiative and the Commonwealth Secretariat, to put in place a robust legal and regulatory framework that will facilitate the process. Through the Resident Consultant provided by the First Initiative, we have defined the system of regulations that would guide the operations of the capital market, and the stock exchange in particular, in all facets of its operations. We have ensured that these are consistent with acceptable international standards, and I can now confidently say that our stock exchange will operate with adequate safety and protection of the interests of the investing public. No one therefore should entertain any fears in transacting business through our stock market. The process of developing the legal framework has been participatory and transparent.

Or the incentives, here in the USA, for Government Sponsored Enterprises such as Fannie and Freddie – massive players in global capital markets and so with a significance stretching beyond your borders – to take on more risk in lending to poorer households. Or for banks to badge illiquid ABS tranches as trading positions in order to benefit from much lower Trading Book capital requirements. Or for banks to move credit portfolios to off-balance sheet vehicles supported by liquidity lines against which no regulatory capital had to be held. I could go on and on. The microeconomics of finance matters hugely to stability. The faultlines of the system are sometimes obscure. And a macroprudential authority needs, therefore, to be attentive to the complex ways in which the different parts of the financial system interact, generating leverage and liquidity risk. Threats may often be buried in the complex details of the system – subprime CDO2, conduits and SIVs etc in the latest crisis; investment trust cross holdings in the 1920s – but the task is to make the connections without getting lost in the trees. Which brings me from scene setting to the real world of the new UK framework. The UK’s new Financial Policy Committee Who we are The FPC exists. We will hold our first formal policy meeting in June. We are a Committee of eleven.
When we adjust the forecast of the real exchange rate for the expected difference in inflation between Sweden and the euro area, we get similar development paths for the nominal krona/euro rate. As differences in inflation are expected to be small, the forecast strengthening of the real rate is also reflected in the nominal rate. Towards the end of the forecast period, the rate should lie, according to the assessments of the Riksbank, within an interval of approximately 8.20 to 9 kronor per euro. The forecast for the rate at the end of 2003, however, consists of a narrower interval, around 8.50 to around 9 kronor per euro. Consequently, should Sweden join ERM2 around the end of the year, this kind of estimate would advocate a suitable central rate between the interval 8.50 to around 9 kronor per euro. It should be noted that the models imply an expected strengthening in both real and nominal terms but that this strengthening from next year onward will be rather limited. When choosing a central rate, it is vital to find a rate vis-à-vis the euro that is consistent with a balanced development in the Swedish economy in both the short and long term. It is important to remember that the real exchange rate, i.e. the relative price between baskets of goods in Sweden and the euro area Member States would be variable even if were to introduce the euro as our currency. But the adjustment would then occur through the relative rate of price increases.

This would primarily have direct effects for the members of the Executive Board but is not something that worries me. However, it could also affect our ability to attract employees. Certain categories of employee may no longer consider us to be as exciting a workplace. For others, the opposite may be the case, particularly for those that want to work in a more international environment. Transparency is and has been a guiding principle of the Riksbank for many years. Should Sweden decide to join monetary union, the Riksbank would continue to be a transparent institution. In some respects, our actions would be naturally restricted by the common regulations for the euro area. To the extent we perceive this to be a problem for our operations and an obstacle to the transparency we safeguard, we would of course seek to effect a change. Concluding remarks Approximately three months remain until 14 September, when the Swedish people will be saying “yes” or “no” to the euro in a referendum. In light of this, I have addressed some issues today that are directly relevant to the Riksbank’s operations and the preparatory work that we are carrying out in the event of a “yes” vote. During the preparatory phase, Sweden may - if the government so decides - join ERM2. We are well prepared for this, having an economy that is in step with that of the euro area.
With the increase in money supply, the SNB has simply reacted to rising demand, and its focus in doing so has been firmly on its mandate to ensure the stability of the Swiss franc and thus the supply of sound money. It is worth noting here that bank deposits, which are also relevant for the development of inflation, have grown at a comparatively moderate rate. Growth in the monetary aggregates referred to by economists as M2 and M3 has been much less strong than would have been expected on  Page 6/8  the basis of the increase in the monetary base or base money (M0) alone (cf. chart 3). In other words, there has been a marked decline in the money multiplier. 9 The increase in base money reflects the rise in demand for the Swiss franc, which is seen worldwide as a safe haven in times of crisis. Without an expansion in the monetary base, money would have been excessively scarce and its price would have risen massively. This would in turn have led to a marked drop in the level of prices, our currency would have appreciated even more, and economic activity would have declined. Can this strong expansion be reversed when necessary? Yes, it can. If the demand for Swiss francs weakens, the supply of money can be reduced at any time, thus ensuring that the currency retains its value. The SNB has a wide range of ways and means at its disposal for absorbing liquidity.

It has often been argued that economic growth should be given priority at the current stage, and only later on should the nominal convergence goals be pursued more vigorously. As a result, we have heard many warnings against fast EMU entry. In reality, however, most of the accession countries have already achieved impressive results in the nominal convergence process. They are now among the countries with moderate or even very low  BIS Review 17/2003  1  inflation rates, and their nominal interest rates have converged to the EU levels. In the majority of cases, no practical problems with achieving the Maastricht criteria on inflation and long-term interest rates are thus envisaged. Moreover, this progress has often been achieved simultaneously with satisfactory growth performance, even though some countries have gone through periods of growth slowdown correcting previous imbalances in their economies. Therefore, I think that the potential conflict between real and nominal convergence has often been exaggerated. The two processes have different time horizons, nominal convergence being achievable in the medium-run, whilst real convergence remains a long-run matter. There is, however, one particular link between the two processes that needs to be taken into account when we design our policies towards EMU accession. Faster GDP growth is likely to lead to a real exchange rate appreciation, making it impossible to have both very low inflation and a completely stable nominal exchange rate. This issue is well known and has received much attention.