samchain/econo-pairs-v1 huggingface dataset:
It was observed that countries where weight was given to low inflation recorded favourable economic developments. Theoretical works published some years later showed that expected and rules-based policy could stabilise the economy provided price and wage rigidity existed. Some examples are: Fischer (1977): “Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule”, Journal of Political Economy, 85, No. 1, pages 191-206), Taylor (1980): “Aggregate Dynamics and Staggered Contracts”, Journal of Political Economy, 88, No 1, pages 1-24 and Calvo (1983): “Staggered Prices in a Utility-Maximizing Framework”, Journal of Monetary Economics, 12, No. 3, pages 983-998. Only when these articles were published was the theoretical basis in place for keeping promises while at the same time allowing monetary policy to contribute to stabilising the economy. 25  See reference in footnote 13. 26  See Eitrheim, Øyvind (2005) in Eitrheim and Qvigstad (Eds. ): “Tilbakeblikk på norsk pengehistorie. Konferanse 7. juni 2005 på Bogstad gård (Norwegian monetary history in retrospect. Conference, 7 June 2005, Oslo)”, Occasional Papers No. 37, Norges Bank. 27  Bahr, Henrik (1962): “Høyesteretts dom i gullklausulsaken (The Supreme Court ruling in the gold clause case)”, Lov og Rett: norsk juridisk tidsskrift, booklet No. 5, pages 193-211. 28  Two government-guaranteed banks had also issued bonds. BIS Review 136/2008  7  Since the beginning of the 1980s, there has been a broad consensus that monetary policy must be geared towards price stability. This paradigm shift also reached Norway, but not until the end of the 1980s.

Svein Gjedrem: Ten years of inflation targeting strategy in Poland compared with the experience of other countries Presentation by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the conference "20 years after the collapse of the socialist economy. Transformation, economic growth and convergence in Poland and other Central and Eastern European countries ", National Bank of Poland, Warsaw, 5 June 2009. *  *  *  Thank you for the invitation to speak at your conference. It is a pleasure for me to be here in Warsaw on this occasion. Norges Bank was given an inflation targeting mandate in 2001. Inflation expectations have been well anchored around the 2.5 per cent target rate in recent years. We practice flexible inflation targeting. The credibility of our inflation target has enabled monetary policy to support a stable economic growth path. However, like other countries, Norway was hit by the international economic downturn that followed the financial crisis. The estimated growth rate for 2009 is minus one percent. Preceding the downturn, we went through a long period of low CPI inflation. Headline CPI in Norway is strongly affected by fluctuating energy prices. An inflation measure that instead includes trend energy prices, CPIXE, illustrates how the inflation rate gradually has been approaching our target of 2.5 per cent. In this – until the fall of 2008 – rather benign macroeconomic environment, rising property prices, high credit growth and a low saving ratio posed a policy challenge – as in many countries.
This requires being specific in terms of how savings can be made, and then firm and tenacious in the implementation phase. Second, we tend to focus public debate and promises on taxes, thereby confusing the symptom with the cause. This may be described as a sort of "Bermuda triangle" of fiscal frustration: (a) successive tax cuts since 2014 have fuelled our deficits and are now costing us around 2 points of GDP (b) however, French people actually express major political doubts about these tax cuts: they are never considered sufficient (c) the constant change in tax measures is economically ineffective as these changes make households and SMEs unfamiliar with them; tax instability and complexity interfere with the expectations of economic players. Page 7 of 19 II. At the same time, intellectual and academic investment have continued to decline Public initiatives that rarely go anywhere Over these same decades, public reform has been the focus of successive but diminishing expectations. In 1989, the government of Michel Rocard launched the "Renewal of Public Service” programme. The adoption of the Organic Budget Law (LOLF) in 2001 represented a great source of hope with its focus on performance and tracking results by public mission - without, alas, ever having been properly “adopted” in either public or parliamentary debate.

Page 11 of 19  How to define “future expenditure” More broadly, it is still difficult today to formally calculate productive or "future" expenditure, i.e. spending that would have the most favourable long-term effects on economic growth and output capacity or on the climate transition. A consensus appears to be emerging in economic research literature whereby spending on public investment has a more positive effect on growth than operating expenditure. For example, according to our internal models, mediumand short-term multipliers are higher for public investment than for public sector wages. But would this also be true in respect of expenditure on any roundabout or multimedia centre? There is fierce debate around what exactly investment or productive capital actually includes: “basic” infrastructure like roads, bridges and airports generally form the common denominator, to which building construction is sometimes added. “Social” infrastructure such as education or public health  Page 12 of 19 facilities constitute another potential category of productive expenditure: investment in education and skills boosts labour productivity and the economy's innovation capacity. More recently, “digital” infrastructure has sometimes been included in productive expenditure, albeit with less clearly defined boundaries, and before us the enormous challenge of artificial intelligence. This  list  of  questions  without  answers  may  appear  frustrating. But it is also, primarily, a call for more research, and Paris should be a centre of excellence here thanks to institutions that are pioneers in this area (France Stratégie, OECD in the international arena, etc.).
The technical analysis assesses the recent trend of the indicators, their current status and also their expected behaviour in the coming quarters consistent with the macroeconomic forecasts prepared quarterly by the Banco de España. The forward-looking analysis is particularly relevant in this context since, in the event of the CCyB being activated, banks have 12 months to comply with the requirement. According to these indicators, the credit cycle continues to show values below the activation thresholds (having regard to the credit-to-GDP gap, which remains below its long-term trend value), although it is progressively converging on the long-term equilibrium level. In fact, forecasts as to how it will trend in the coming years indicate that this indicator will turn positive towards 2021 Q1 and might exceed the activation threshold in 2021 Q2. Some complementary quantitative indicators are along the same lines. This is particularly the case for credit intensity, which shows the weight of the change in credit relative to GDP, and the overvaluation of house prices currently show values close to equilibrium, with an upward trend that is forecast to continue over the next two years. Non-financial privatesector debt service, for its part, has maintained the reduction that marked its path at the start of the global financial crisis. Foreseeably, this reduction will continue, albeit more moderately so over the coming two years, given that the process of debt reduction has eased significantly and interest rates have less margin for further cuts.

So far, deposit institutions do not appear to be significantly increasing their exposure to risk, although there are some factors where we are exercising greater watchfulness. In fact, the total volume of lending granted by deposit institutions in Spain to the nonfinancial private sector has continued to fall (-1.2% in June), or shows muted increases when the construction and real estate development sectors are excluded. Moreover, the debt ratios of the non-financial private sector have continued falling, standing at levels below the euro area average. Specifically, the debt/GDP ratio of the non-financial private sector was slightly above 130%, 3 pp down on a year earlier, and 2 pp less than the euro area average, having declined by more than 70 pp from its peak during the crisis. 5/10  In the case of non-financial corporations, overall external financing has continued to expand at year-on-year rates of close to 2%, with significant growth in bond financing and a fall-off since the start of the year in new bank lending extended to non-financial corporations. Overall, the reduction in the deleveraging of non-financial corporations exceeds 50 pp of GDP, from the peak reached during the crisis. Further, in recent years banks appear to be setting greater store by variables such as productivity in lending standards, which results in a more efficient allocation of credit. Nonetheless, some firms still show a certain degree of financial fragility.
The broken line is the Riksbank’s forecast from the Monetary Policy Report in October 2013. Sources: Statistics Sweden and the Riksbank. Figure 2. More expansionary monetary policy  Repo rate  5  5  4  4  3  3  2  2  1  1  0  0 07  09  9  11  13  15  Unemployment  9 8  7  7  6  6 5 07  09  Main scenario  11  13  Lower policy rate  15  4  3  3  2  2  1  1  0  0 07  8  5  CPIF  4  09  11  13  15  Household debt ratio  180  180  170  170  160  160  150  150 07  09  11  13  15  Own calculations  Note. Forecasts from the Monetary Policy Report, October 2013. Repo rate, per cent, quarterly averages. The CPIF, annual percentage change, quarterly averages. Unemployment, percentage of labour force, 15–74 years, seasonally-adjusted data. Real interest rate, 1 year, per cent, quarterly averages. Debt ratio, per cent of disposable income. Effects on CPIF and unemployment according to the Riksbank’s macro model, Ramses. Effects on debt ratio according to own calculations – see footnote 14. Sources: Statistics Sweden, Riksbank and own calculations. BIS central bankers’ speeches  11  Figure 3.

But in the beginning, it was not entirely clear that the inflation target would be a success. Monetary policy was therefore mainly focused on creating confidence in the target initially. The repo rate was kept at a high level to bring down inflation, despite relatively high unemployment, which led to criticism from several areas.3 As inflation expectations became anchored, however, there was scope to include developments in the real economy in monetary policy. One could deliberately allow inflation to deviate from the target for a period of time if this would give a better long-run development in employment and unemployment. The inflation-targeting policy was thus flexible. The framework for the inflation-targeting policy has of course developed considerably over the past twenty years, much due to academic research. Research has also contributed insights into the economic policy problems faced by Sweden and several other countries in the 1970s and 1980s. It was difficult for decision-makers to inspire confidence in the long-run aim to hold inflation low, as participants in the economy understood that there were incentives to deviate from the target in the short run, for example, to reduce unemployment. It could therefore be beneficial if monetary policy were conducted with a focus on a clearlyformulated, long-run target for price stability and an arm’s length away from the current party politics.
Weaker consumption demand has direct effects on growth, and thus also on unemployment (see Figure 7). This in turn has indirect effects on financial stability in that the banks’ loan losses in the corporate sector may increase as a result of the poorer economic activity. Another aspect that can affect financial stability is that an increasingly large share of the banks’ funding is through foreign investors (see Figure 8). Confidence among foreign investors may be affected substantially by a fall in house prices. This could have direct effects on financial stability in that the banks have greater difficulty obtaining funding – historically, foreign investors have proved to be “volatile”. Indirect effects may then arise on the macro economy in that the banks’ lending declines, which subdues demand. A combination of all of these effects may mean that the consequences for the economy are serious, if there is a decline in the housing market. So how much should we worry about this? The Riksbank’s inquiry into the risks in the Swedish housing market, which was published in spring 2011, showed that the high house prices in Sweden can largely be explained by high incomes, low real interest rates and a low rate of construction. The low rate of construction, particularly in metropolitan regions, is something I consider to be a growing problem. At the same time, our inquiry noted that the fact that there are explanations for the high house prices in Sweden does not offer a guarantee against future price falls.

The financial supervisory authority in Sweden, Finansinspektionen, also promotes stability in the financial system, but with a greater focus on individual institutions – what we usually call microprudential supervision. As knowledge of the risks in individual financial institutions is extremely important for successful macroprudential policy, it is essential that Finansinspektionen also participates in macroprudential policy (see Figure 9). This is particularly important in a country like Sweden with four dominant major banks. Thus, the competence and experience of both the Riksbank and Finansinspektionen will need to be utilised if macroprudential policy is to be effective in Sweden. What other requirements can one reasonably make of a framework for macroprudential policy so that it will function efficiently? The framework for macroprudential policy in Sweden should entail a clear mandate and effective tools… The Riksbank has earlier highlighted a number of general criteria that should be met for macroprudential policy to function successfully, and which I certainly agree with. There are four main criteria.11 Firstly, it is necessary to have a good power for decision making, in the form of a clear mandate and well-defined tools. Secondly, a strong independence from political and sectorspecific considerations is needed, as I mentioned earlier. Independence assumes, thirdly, that there are forms for clearly holding the authorities accountable, for instance, through farreaching requirements for transparency and reporting. Fourthly, a substantial and lasting capacity for analysis is required.
•  Early termination: For resolution to work effectively, resolution authorities need to ensure that counterparties do not use entry into resolution of a firm as grounds for closing out derivatives and other contracts. Disorderly close out could generate exactly the adverse impact of failure on the broader system that resolution is intended to avoid. For that reason, powers to apply a stay on contract terminations and cross defaults are part of the Key Attributes. This power is included in the BRRD, along with to apply a stay power in recognition so that resolution actions taken by non-EU resolution authorities can be enforced within the EU. There are also provisions in the BRRD that will give resolution authorities the power to impose requirements that where EU firms are operating outside the EU, in the absence of a recognition power in the host regime, their financial contracts include terms that ensure the actions of the home resolution authority are enforceable 3. 2  BRRD article 32. 3  BRRD article 55. 2  BIS central bankers’ speeches  •  Bail-in: So to the bail-in where again the KAs and the BRRD are aligned 4. The most important thing to note here is that bail-in must respect the creditor hierarchy. Under BRRD, a small number of liabilities are excluded from bail-in – for example those with an original maturity of less than seven days, and in exceptional circumstances some additional liabilities may be excluded – for example in order to maintain continuity in critical functions.

Mugur Isărescu: Gaps and economic crises in South-East Europe – present and past Opening speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the conference "Gaps and Economic Crises in South-East Europe: Present and Past", Bucharest, 28 October 2016. * * * Distinguished guests, Ladies and gentlemen, Allow me to warmly welcome you to the National Bank of Romania. The board of the National Bank of Romania and I are glad to host, for the second time, the Annual Conference of the South-East European Monetary History Network. Five years ago, in March 2011, when NBR hosted this event for the first time, we expressed our interest and support. We firmly believe that a good understanding of history, of how our forerunners addressed issues linked to monetary and economic developments, sets the foundation for finding solutions to present day challenges. This conference brings together central bank representatives from Albania, Austria, Bulgaria, Greece, Serbia and Romania, as well as prominent members of academic and scientific European circles. I welcome you to Romania and hope you will have opportunity to enjoy your brief stay. This year, the meeting is focused on economic cycles and economic crises in South-East Europe, both past and present. This is a generous and challenging research topic. All the more so, there has always been a permanent concern in the past 150 years for the policy makers in the region to reduce the economic gaps between the countries in South-East Europe and the developed ones.
From this standpoint, the gravest danger is to index wages to inflation and, in particular, to inflation of external origin. This is a well-known finding in the economic literature and broadly confirmed by experience. The countries with wage indexation mechanisms are those that have least capacity to cope with external shocks like the oil price increase. They tend to feed into a wage-price spiral, with negative effects on purchasing power and employment. This experience is not unique to the 1970s. Even today in the euro area, countries like Spain that still have indexing mechanisms have above-average inflation. Unemployment has started to rise again – the first sign of an economic slowdown; the unemployment rate in Spain is at around 9%, compared with 8% in the middle of last year. In Italy, where there is no automatic indexing, the unemployment rate is below 6%, the lowest level since the early 1980s. It would be especially damaging for employment and inflation if the reform of the Italian wage bargaining system currently under debate, aimed at tying wage levels more strongly to productivity, were to contain inflation indexation clauses. Even worse would be the situation if a possible indexation were to be tied, as some are advocating, to a price index of frequently purchased goods, such as that developed by ISTAT for analytical purposes and reflecting only the frequency of purchases, not their economic value.

The second error to avoid is to tackle the effects deriving from a supply shock, like that connected to the increase in the oil price, with policies to stimulate demand. If the increase in oil price and other commodities is protracted, anticyclical policies simply postpone the adjustment by several months, making it more expensive. From the first oil shock – in the mid-1970s – it is possible to gain very clear insights that ought not to be forgotten. The comparison between the experience of Germany, which avoided using monetary and fiscal policy to compensate for the loss in purchasing power caused by the increase in oil price, and that of Italy, which instead sought to stimulate domestic demand is illuminating. The German economy and that of other countries which followed the same path emerged stronger from that difficult phase of adjustment than countries like Italy which followed the illusions of Keynesianism and only engineered a higher inflation rate. 1 The depreciation of the exchange rate did not allow to increase market share on a sustainable basis. Italy is still paying for that error, with a public debt above 100% of GDP and a debt burden that weighs heavily on taxpayers. The third error that history invites us not to repeat is to put up protectionist barriers to stop or impede the economic and financial integration under way at global level. Experience shows that such measures damage economic growth and tend to worsen crises. The 1929 crisis  1  See Figures 1-4 in the Annex.
For that reason, Norges Bank’s initial activity was to enter this market. Norges Bank provided loans secured by real property. At its birth, the Bank was, to use current terminology again, “market maker of last resort”. A private banking system gradually took shape. The first savings bank was founded in 1822 and the first commercial bank in 1848. In 1852 the first state mortgage bank was established. These developments allowed Norges Bank to withdraw from the mortgage market and concentrate instead on providing liquidity to the short-term money market. However, it was not until the 1860s that the Bank’s predominant task was supplying short-term liquidity. Much digging and research remains to answer the question of how Norges Bank dealt with the challenges during the 19th century. So far, scholars have not found that the Bank took emergency action when a financial crisis affected Norway in 1847. But when the crisis hit again ten years later, the Bank sent silver abroad to Hamburg, which was the financial centre of the Norwegian merchants. This support was important to enable Norwegian industry to carry out international payments and have their bills of exchange discounted. In 1892 a new Act was passed whereby Norges Bank became the bankers’ bank. As the Governor mentioned in his speech yesterday, this made Norges Bank a modern central bank in a legal sense. In 1899, Kristiania (as Oslo was called at the time) experienced dramatic fall in house prices.

At the recent release of the 2018 Financial Stability and Payment Systems Report, Bank Negara Malaysia reported that financial institutions in Malaysia will continue to support economic activity, including to households for affordable housing. Loan disbursements and net financing to households grew healthily last year by around 6.7% and 4.7% respectively. The approval rate stood at 71.3%, with around 70% of loans for first time buyers of properties priced below RM500,000. Finally, for policymakers, our role is to continue pursuing greater coordination with the private sector to build a sustainable housing market. In Malaysia, various initiatives have been announced to support this agenda, including the launch of Bank Negara Malaysia’s Fund for Affordable Homes, the National Home Ownership Campaign, stamp duty exemptions and provision of mortgage guarantees and rent-to-own schemes. While we are seeing a gradual rebalancing of housing supply towards the more affordable segments in Malaysia, it is important that future supply is tailored to the needs of future demand. As such, moving forward, it will be critical for Malaysia to accelerate the establishment of an integrated housing database. The database would be important to provide timely information to help build an efficient housing market through greater transparency and lead to better planning by policymakers and developers. The newly established single authority for affordable housing should play a proactive and strategic role in managing affordable housing in Malaysia. Local authorities and developers should also work together to reduce the cost of building houses.