samchain/econo-pairs-v1 huggingface dataset:
International support of the New Partnership for Africa’s Development (NEPAD) had led to some increase in aid in 2002; the trend was expected to continue in 2003 (OECD, ADB). The future outlook in the performance of the real sector is set to improve due to: •  low production costs (labour, electricity, and water, among other inputs);  •  comparative advantage in areas such as specialised agricultural production;  •  Numerous investment opportunities are available in the mining sector, which remains largely untapped, despite the richness and variety of minerals in Africa. The scope for improvement of environmental sustainability in Africa, hence economic growth is extremely vast;  •  Expansion of markets through regional integration within Africa with necessary networks will facilitate for increased capacity utilisation among existing and potential productive businesses; and  •  Additional areas of improvement include the expansion of hydroelectric power facilities along the major rivers such as the Nile, Congo and Zambezi to provide a viable source of clean energy to the majority of the population, which presently primarily relies on biomass fuel.3  For the African continent to embrace the potential benefits of globalisation, it is vital for African countries to implement supportive fiscal and monetary frameworks that promote investment. Prudent policies in these areas provide an important contribution to macroeconomic stability, a key prerequisite for economic growth. In addition, African countries must now commence the process of adding value to their export products as they compete and interact with a global market. 5.

In this regard, measures need to be developed to quickly put Africa’s high potential economic growth on a path that is environmentally sustainable. Deliberate actions need to be taken in successfully transferring environmentally friendly technologies to Africa. A case in point is the use of solar technology, for which achievements thus far are promising. Most of Africa is endowed with solar energy, and transforming it into usable energy would substitute the widespread use of wood fire energy by the majority of the continent’s population. In addition, because this is proven technology no more resources need to be devoted to Research and Development. Further, solar energy circumvents the costs related to the generation and distribution of yet another clean source of energy, hydroenergy. In addition to generation, distribution of hydroelectricity presents Africa with a unique challenge of supply network or grids due to the vast landscapes that constitute the rural setting where majority of the population resides. This is part of the wider infrastructural constraint that the continent is yet to overcome. 4. Africa and the world economy  In the real sector, a number of African exports experienced an overall increase in prices in 2003. International gold prices increased, much to the benefit of the continents top producers, South Africa and Ghana. Likewise, oil prices increased during the same period leading to higher revenues for countries such as Nigeria, Equatorial Guinea, and Chad (ADB, 2003).
Peter Praet: Japan and the EU in the global economy – challenges and opportunities Speech by Mr Peter Praet, Member of the Executive Board of the European Central Bank, at the conference “Japan and the EU in the global economy – challenges and opportunities”, organised by Bruegel, the Graduate School of Economics, Kobe University, and Fondation France-Japon de l’EHESS, Brussels, 7 October 2013. *  *  *  I would like to thank Stephan Fahr, Georgi Krustev and Ana Lima for their contributions to this speech; all views expressed remain mine. Ladies and gentlemen, It is a pleasure to be able to share some thoughts on the challenges and opportunities Japan and Europe are facing in the global economy. Since the beginning of the financial crisis, there has been no shortage of challenges along the road back to what I would call the “normal functioning” of our economies. One of the biggest challenges I see is still to be addressed: that of how to grow in an era of deleveraging. Deleveraging can occur in an orderly fashion or it can be chaotic. It may drag our economies down or it can place them on a stronger footing. Which of these will be the case depends to a large extent on how we manage the process. Today, I will focus my comments on the policy challenges faced by our two economies, especially as regards how to manage the deleveraging process in the euro area, keeping in mind the Japanese experience during the 1990s.

Economic research can contribute significantly to this, and in this context, some fundamental questions need to be addressed. – First, what is the macroeconomic impact of financial regulations? A greater understanding of how financial regulations act at the aggregate level is needed, both in containing systemic risk and in affecting the growth potential of economies. This would enable us to make more informed policy recommendations. – Second, how should systemic risk for banks, non-bank financial institutions and markets be identified and measured? Economists have proposed several methods of measuring systemic risk. But more research is needed in order to understand systemic risk arising from banks and non-bank financial institutions and their interaction. – Third, how should monetary policy be conducted in the context of macroprudential policy? And there are many more questions, some of which will be discussed during this workshop. We are eager to learn from the expertise and the experience of other countries. Norges Bank is committed to investing in research and supporting cooperation with other central bankers and foreign academics. This workshop is one product of this commitment. We are fortunate to have such prominent speakers contributing to the program. I wish you fruitful and stimulating discussions, and I hope you enjoy your stay in Oslo. Fortunately, the weather is on our side, motivating us to stay focused on our work. It would have been more difficult on a sunny day in June. 2  BIS central bankers’ speeches
Øystein Olsen: Financial economics and the challenges in managing Norway’s Government Pension Fund Introductory remarks by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the NBIM (Norges Bank Investment Management) Financial Research Conference, Oslo, 30 August 2011. *  *  *  It is a great pleasure for me to welcome each of you to the first NBIM Financial Research Conference. The objective of today’s conference is to present and discuss a set of papers at the forefront of academic research on financial economics. This event is also part of Norges Bank’s efforts to strengthen ties with the academic community. In addition to some of the best researchers in financial economics, we have in this room some of the top investment professionals in Norway. The opportunities for interesting discussions should be good. At the outset, the intention of this conference was to present leading academic research, without placing weight on its direct relevance to NBIM. However, as this conference will show, there is considerable common ground between the research frontier of financial economics and our challenges in managing the Government Pension Fund. Over the last three decades, researchers have moved a long way from the Capital Asset Pricing Model. One important result of empirical financial research is that expected returns on traded assets vary much more over time and across assets, than was previously thought and implicitly assumed by the CAPM.

In 2016, Shariah-compliant trade finance accounted for 24.1% of total trade finance provided by the Malaysian banking sector. However, our Islamic finance industry only financed about 5% of total exports in Malaysia, again, signifying an untapped growth area with large potential. Increasing bank financing for SMEs would also encourage more market based solutions to meet the funding needs of the halal sector participants, which are now largely reliant on government initiatives. There are however a number of challenges that may impede trade finance facilitation by Islamic finance players. I would like to highlight two. First is – “process inefficiencies” – that can contribute to higher operational risks such as fraud. This can be mitigated through use of technology that reduces reliance on traditionally document-intensive and multi-tiered manual processes. In Malaysia, I am happy to note that six Islamic banks have embarked on digitalisation of trade finance processes – through an integrated web-based platform that offers trade finance and working capital management solutions. The second challenge is, – the need to improve connectivity between the Islamic finance industry and the international trade community – to facilitate effective intermediation of trade finance needs. Again, the use of technology can ease the application and submission of trade-related information and documents which can expedite the whole process. If these challenges are not addressed, industry players are at risk of becoming irrelevant in the trade finance space.
Fintech is transforming the relation with customers, the means of payment, as well as the modes of financing and transfers. On this particular last point, the potential gains are enormous for developing countries receiving large flows of their nationals abroad. In 2018, according to the World Bank, these transfers may have totaled 689 billion dollars, more than three-quarters of which were intended to developing countries. Traditional business models of banks are now challenged by the new financing methods, thus putting more pressure on their profitability and pushing them, in some cases, to greater risk-taking, which would eventually impact financial stability. 5  In emerging and developing countries, with internet and mobile telecommunications  penetration,  Fintech  now  offers  tremendous  opportunities to strengthen financial inclusion and economic and social development. According to a statement issued last November by the United Nations Secretary General, within a period of six years, 1.2 billion people have accessed financial services through technology. In a report issued in 2016, the Mckinsey Institute estimated the potential of Fintech in emerging economies by 2025 to an additional 6 percent of GDP, i.e. 3.7 trillion Dollars, and 95 million new jobs. The same report also revealed that two billion people and 200 million of very small, small and medium enterprises in emerging countries do not have access to credit, while those who have are still facing high costs.

Our target is not only to adapt our business lines and redesign our processes, but also to play a role in the development and support of our ecosystem, through a participatory approach. Ladies and gentlemen, To conclude, I would say that we may have taken some time to grasp the scale of the digital revolution, but the numerous initiatives and interactions, such as this meeting, leave us with the hope that the backlog will be quickly cleared and that this revolution will effectively contribute to sustainable and inclusive development in our countries. In this respect, we are pleased to note the willingness of international organizations, including the IMF, main interlocutor of central banks, to upgrade their means and human resources with a view to providing support to their member countries. As such, I suggest, if you deem it suitable, that we request the Fund to institutionalize such a meeting in our region, at the frequency most appropriate to us. Hence, we would be able to continue the debates and exchanges, assess the progress made, ultimately unite our efforts, and capitalize on our mutual experiences in order to better address the current and future challenges of digital transformation. Thank you. 10
This asymmetry contributed to the sharp increase in market volatility, the dramatic reduction in market liquidity, and the impairment in market function following the Lehman failure. Fear that this could happen again if another firm failed, encouraged flight from other dealers perceived by market participants to be relatively weak that might have large potential exposures. Of course, as if this were not bad enough, the opaqueness of the OTC derivatives market made the situation much worse. No one had a clear insight into the financial health of their counterparties. Although each market participant could calculate its bilateral exposures to a particular dealer and the particular dealer could understand its own exposure to each of its own counterparties, this didn’t answer the broader question: how exposed were the clients and dealers to others in the financial system through their derivatives trades and other open positions? Because there was no easy way to know who was in difficulty or not, the incentives were all on the side of assuming the worse – closing out open trades, hoarding liquidity, and retreating to the sidelines. The crisis had made it crystal clear that the regulatory regime had not kept pace with the rapid growth of the global OTC derivatives market. In assessing the shortcomings of the OTC derivatives market after the crisis, a global consensus has been reached. Although I will be over-simplifying in the interest of time, I view the following aspects of reform as the most important.

Transparency into counterparty risk should be greatly improved via disclosure requirements and the ability to aggregate trade information in trade repositories, and end user trading positions should be much better protected by segregation and portability requirements and a more robust financial market infrastructure. Although there is still much to do as part of this process, I’m optimistic that we are on the right road. We just need to continue to push ahead and not forget the lessons learned from the financial crisis. Thank you for your kind attention. I would be happy to take a few questions. BIS central bankers’ speeches  7
For the unemployment gap to be a practicable measure in monetary policy requires that the cyclical part of unemployment (which can be influenced by monetary policy) can be distinguished, with a reasonable degree of certainty, from equilibrium unemployment (which depends on how the labour market functions). As will be seen, this is not a trivial problem. In my speech today, I will discuss resource utilisation: specifically what is known as the unemployment gap and its role in monetary policy decision-making. Recently, there has been  1  This is usually called a flexible inflation-targeting policy. The term flexible inflation-targeting policy was introduced by Svensson (1999). The definition of the term entails the central bank minimising a squared loss function consisting of both inflation’s deviation from target and output’s deviation from potential output. A central bank that only considers inflation’s deviation from target is said to be conducting a strict inflationtargeting policy. BIS central bankers’ speeches  1  frequent discussion of the unemployment gap in monetary policy contexts, but this is not a new discussion.2 For my part, I’m extremely doubtful about placing too much importance on the unemployment gap when taking monetary policy decisions in the here and now. It may look easy in theory; but in practice, it is not. My view is that we should continue to use several different measures of resource utilisation instead. Taken together, these can serve as guidance for monetary policy.

Placing an excessive focus on monetary policy in this context could easily lead to the underlying problems on the labour market – and the solutions to them – not receiving the discussion they deserve. The target of monetary policy is to stabilise inflation at around two per cent. Without prejudicing this target, monetary policy should also strive to stabilise production and employment around long-term sustainable development paths.1 Put very simply, this is a matter of trying to steer demand so that resource utilisation is balanced but inflation does not deviate too far from two per cent. It’s easy to describe, but it’s a difficult balancing act in practice. Unlike inflation, resource utilisation is not observable; instead, its level must be estimated. The Riksbank has put a lot of work into estimating various so-called gap measures that show how strained resource utilisation is, compared with a normal situation (examples of these include the GDP gap, the hours gap and the unemployment gap). Using these various measures as a basis, we make an overall assessment of resource utilisation. What these gap measures have in common is the comparison of the various quantities actually measured to unobservable quantities. For example, the unemployment gap is calculated by comparing actual unemployment to estimated equilibrium unemployment. So all of these calculations are uncertain.
The ease with which the U.S. financial system absorbed the substantial scale of corporate defaults that peaked in recent years in 2002 provides some support for the argument that broader and deeper capital markets make the system more resilient. In general, there does not seem to be strong empirical support for the proposition that derivatives increase volatility in financial markets. Volatility is not higher where derivatives are most prevalent. Credit market innovation does not appear to have resulted in a large increase in leverage in the corporate sector, as some had feared. Indeed, nonfinancial corporate leverage in the United States is currently low by recent historical standards. The overall degree of balance sheet leverage by corporations, for example, is higher in some more traditional financial systems than it is in systems where credit market innovations are more advanced. Default rates do not appear to have risen, nor recovery rates fallen as these credit innovations have spread, despite concerns they might lead to excess lending, the mis-pricing of credit risk and more messy and more complicated workouts, resulting from the greater diffusion of the investor base. And although the sources of the broad moderation in GDP volatility observed in the United States over the past two decades are still the subject of debate, the fact that this moderation occurred during a period of extensive innovation in credit and other financial markets should provide some comfort for those who expected the opposite. Innovations in credit markets are inevitably accompanied by challenges.

The stronger these shock absorbers, the more resilient markets will be in the face of future shocks, and the more confident we can be that banks will be a source of strength and of liquidity to markets in periods of stress and that the financial system will contribute to improved economic performance over time. Thank you. 4  BIS Review 29/2007
In the United States, for example, the 2010 deficit ratio stood at more than 10% of GDP and the latest IMF projections suggest only a relatively limited decline to around 8% of GDP in 2012. US debt reached around 95% of GDP in 2010 and would further increase to around 105% of GDP in 2012. Japan and the UK ran similarly high deficits. In the case of Japan, the deficit ratio amounted to around 9% of GDP in 2010 and, after an increase in 2011, would return to around this level in 2012. In the UK, according to the latest European Commission forecast the deficit ratio would decline from 10.3% in 2010 to around 8 % in 2012. Against this background, what are the reasons for the particularly severe disruptions in some euro area sovereign debt markets and the related contagion effects, which are undermining financial stability in the euro area as a whole? To approach this question it is helpful to take a closer look at the specificities of the euro area institutional setup. The combination of a single monetary policy and strongly decentralised fiscal policies constitutes a specific feature of the euro area. The weak European governance has not been able to remove incentives for national fiscal policymakers to allow the emergence of fiscal imbalances in the form of running excessive deficits at the cost of other participating Member States. The Stability and Growth Pact (SGP) was established to address such coordination problems.

For this reason, both when the SMP was first announced in May 2010 and when its active implementation was confirmed in August 2011, the ECB took special note of the commitments of euro area governments to ensure the sustainability of their public finances and address the shortcomings of economic governance in the euro area. Fiscal imbalances, governance in a Monetary Union and sovereign contagion It is clear that a lasting solution to the current sovereign debt crisis requires making swift progress in the consolidation of public finances, the boosting of sustainable economic growth and the strengthening of the governance framework at the euro area level – to which I will now turn. The fiscal situation in euro area countries deteriorated significantly following the financial crisis.10 In 2010, the aggregate fiscal balance of the euro area stood at more than 6% of GDP, up from an almost balanced budget in 2000. The latest projections by the European Commission suggest that the euro area deficit ratio would gradually decline to around 3½% of GDP in 2012. Euro area debt amounted to more than 85% of GDP in 2010 and would increase to around 90% of GDP in 2012. Moreover, 14 out of 17 euro area countries are currently facing an excessive deficit procedure related to a budgetary deficit above the 3% of GDP reference value. To be sure, the fiscal situation in the aftermath of the crisis is even worse in other major economies.