samchain/econo-pairs-v1 huggingface dataset:
Mr. Heikensten discusses monetary policy Address by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, at the Autumn Conference arranged by the Centre for Business and Policy Studies on 14/10/98. First a word of thanks for the opportunity to attend this meeting. The autumn conferences are a fine tradition to which it is a pleasure to contribute. On previous occasions I have used the opportunity to look back over the past year and discuss what the Riksbank has been doing, including how monetary policy is conducted. Then I have tried to look ahead and pick out some issues of importance for monetary policy in the longer run. My approach this year will be broadly the same. First a review of what has happened since last autumn, with comments on how the Riksbank’s assessment of inflation has evolved over the year. Then, as previously, a look at the question of how we communicate policy and how it has been perceived in financial markets. On this occasion we are in the throes of an international financial crisis, with great uncertainty as to what its real economic effects may be. Contagious effects of the crisis have gradually become larger and larger. Looking back, one can clearly see how the economic forecasts of most observers have swung during the year, from a phase of concern about a future increase in inflationary pressure to a phase of strong anxiety that the global economy will be hit by a recession.

I would hope that the insurance industry, and the liquidity and investment funds you run, might be investors in such paper, whose liquidity would receive some underpinning. Certainly you will  1  For example, see Buiter W (2009), “Central banks and financial crises”, paper presented at the Federal Reserve Bank of Kansas City’s symposium at Jackson Hole, Wyoming and Tucker (2009), “The repertoire of official sector interventions in the financial system: Last resort lending, market-making and capital” paper presented at the 2009 International Conference: Financial System and Monetary Policy Implementation, Bank of Japan. 2  BIS Review 71/2009  be an important part of the Bank’s consultative process led by my colleagues Paul Fisher and Sarah Breeden. Addressing trade and working capital finance has become all the more important given the reduction in the availability of trade-credit insurance, which our regional Agents hear quite a lot about. We therefore welcomed the initiative of that relatively concentrated industry to release a code of conduct, supported by the ABI, for handling difficult cases where unnecessary firm distress could be avoided. The Bank has followed this carefully given our role as midwife for the London Approach designed to help facilitate the orderly resolution of creditor/debtor problems. In a few cases over recent months, as well as over the trade-creditinsurance code, my colleague Andrew Bailey has played a behind-the-scenes role – the traditional role of providing the Bank’s good offices where (and only where) we can help, and where help is desired by those involved.
In contrast, I do not think that the GDP gap provides a reasonable view of the development of resource utilisation over the course of recent years. I shall return to this shortly. First, however, I would like to address the effects of the financial crisis on potential GDP, as this plays an important role in the assessment of the GDP gap. The financial crisis has had a negative effect on potential GDP The financial crisis has probably lowered the potential growth rate.12 There may be several reasons for this. The capital stock has been negatively affected by the financial crisis through the decrease of the investment level. Growth in the capital stock has come to a halt. Even though we expect investments to recover quite strongly in the period ahead, the capital stock will not reach the pre-crisis trend level. The labour force has probably also been affected negatively due to exclusion from the labour market, with competence among the labour force being undermined by long periods of unemployment. However, this reduction of the labour supply due to the crisis has been more than counteracted by an economic policy focused on increasing labour force participation. The number of people in the labour force has increased in recent years due to this. The most important factor, which is also the most difficult to explain, is that total factor productivity also fell during the most recent crisis. It is, of course, normal for productivity to develop less strongly at the start of a recession.

The December survey from the National Institute of Economic Research showed an unchanged inflow of orders and expectations of subdued production. The order statistics from Statistics Sweden, which fluctuate fairly widely from month to month, gave the impression of relatively weak orders in the fourth quarter of 1996. In December and January, however, the order inflow has picked up and more recent survey data likewise paint a brighter picture of activity in manufacturing. The improvement mainly applies to production for export but even the domestic market is somewhat optimistic about the future. Against this background, exports and industrial production could develop somewhat better than expected earlier. The changes are not very large but to date various indicators, including the continued undervaluation of the krona, do point in the same direction. In the case of private consumption, the indicators to date are not uniform. On the one hand, in the first three months of 1997 the number of new car registrations for private individuals has risen in annual terms by more than 60 per cent, albeit from a low level. Moreover, the survey of household purchasing plans by Statistics Sweden shows that since the autumn, household’s economic expectations have become more optimistic. The development of monetary aggregates such as M0 is also an indication of rising private consumption. On the other hand, the lower than expected savings ratio in 1996 may increase uncertainty regarding possible increases of private consumption in 1997 and 1998.
For example, the Central Bank holdings of Treasury bills have declined drastically this year from more than Rs 300 billion at end 2016 to around Rs 30 billion by now, as the new system ensures full market subscription through the auction system without creating adverse volatility in interest rates. The proposed Liability Management Act allows the Treasury to create a buffer fund to meet the expenditure in the following year, eliminating the necessity for the Central Bank to provide advances to the Treasury at the beginning of each year as per the current provisions of the MLA. These two measures would, in future, insulate monetary policy from fiscal dominance. These reforms are expected to create a win-win situation for both the Central Bank and the Treasury, as they would facilitate the Treasury to raise the required funds at the least possible cost from a more sophisticated government securities market at competitive rates, while helping the Central Bank to achieve its primary objective of maintaining price stability. Looking towards the Future: Flexible Inflation Targeting as the New Monetary Policy Framework In the “Road Map: Monetary and Financial Sector Policies for 2017 and Beyond” presented in January 2017, the Central Bank of Sri Lanka reiterated its intention to move to flexible inflation targeting in the medium-term as its new monetary policy 21  framework.

Evolution of Monetary and Exchange Rate Policy in Sri Lanka and the Way Forward by  Dr. P. Nandalal Weerasinghe1 Senior Deputy Governor Central Bank of Sri Lanka  I am deeply honoured to have been invited to deliver the Olcott Oration 2017 and to join a list of great Anandians who have delivered this Oration before. I cannot think of a greater honour that my school could confer on me. I accepted this invitation with humbleness, with gratitude and respect, and with great pride. Let me also take this opportunity to appreciate the support and guidance I received during my school career at Ananda College. The guidance our teachers gave us laid the foundation for any success later on in our lives. My oration today, is on the rather technical topic of monetary and exchange rate policy. The biggest challenge that I have to face is to present such a topic to an audience with a majority who might not be familiar with the technical jargon involved. However, I will attempt to keep the discussion as simple as possible. Central Banking and Price Stability The prime responsibility of any central bank around the world is to maintain price stability by way of maintaining low and stable inflation on a sustainable basis. At the outset, I would like to discuss why low and stable inflation is important for growth and stability of the economy. Based on experiences of many countries and different time periods, we have seen varying levels of inflation.
I wanted to speak to this, not to continue the debate about the rights and wrongs of this case, but instead to highlight some of the lessons that the Bank and industry might draw from it. In particular, I want to dispel the urban myth that has developed around these events. While the Prudential Regulation Authority (PRA) can impose financial penalties and suspension under the SMR, we do not run for our regulated entities a disproportionate “one strike and you are out” regime for an honest mistake. Neither explicitly nor implicitly. Not I as Governor, not the CEO of the PRA, not the head of the FCA. Not any of our supervisors in the PRA. The SMR is about clear responsibilities, proportionate consequences, and developing a culture of openness and accountability. Proportionate means taking into account the severity of the incident, the track record of the individual and their firm, as well as the firm’s wider response. An honest mistake that is freely admitted for which a firm takes prompt remedial action is not a firing offence. And here’s my point: we must not let recent events inadvertently tighten perceived standards for the industry because that could have Senior Managers running scared, drive compliance underground and undermine 12  For TSC report see: https://www.publications.parliament.uk/pa/cm201617/cmselect/cmtreasy/.../1092.pdf  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  our collective objectives. Another risk, flagged by some, is that it will also become harder to find candidates of sufficient calibre willing to take on senior roles.

It presupposes that the general public has ample opportunity to insight into our activities and that we are regularly  2  BIS Review 22/2008  examined. So assessment is important to us – both from an efficiency perspective and a democratic perspective. However, for the assessment to meet these purposes, there are a couple of factors to be taken into account. What can monetary policy achieve? To begin with, the demands – the actual base for the assessment – should be founded on what monetary policy can actually achieve. Monetary policy is able to secure an inflation rate that is in line with the inflation target over a number of years. It can also contribute to stabilising cyclical fluctuations in production and employment. However, monetary policy cannot achieve a permanently higher level of employment or growth in the economy. Both previous experience and economic theory have shown this to be the case. And this was one of the reasons why it was decided when drawing up the Sveriges Riksbank Act that it would be inappropriate for the Riksbank to have an explicit target regarding, for instance, GDP growth or employment, in addition to the price stability objective. It would then appear natural to assess monetary policy by looking at the way in which the inflation outcome relates to the Riksbank’s inflation target. But there are some factors here too that should be borne in mind. In retrospect One such factor is that efficient inflation targeting by necessity must be based on forecasts of economic development.
deposits) -192 0 0 0 0 0  10,253 13,058 3  29  All speeches are available online at www.bankofengland.co.uk/speeches  29

Use of instruments that diminish the risk associated with floating exchange rates is also gaining ground in Norway. The operational target of monetary policy in Norway is low and stable inflation. Developments in the krone exchange rate are nonetheless important when Norges Bank sets the interest rate. There are several reasons for this. First, changes in the krone exchange rate affect prices in krone terms for imported consumer goods and services. Second, exchange rate changes have an impact on competitiveness in Norwegian business and industry and on market opportunities at home and abroad. This affects the level of activity in the economy and, in turn, price and cost developments. In the period between Inflation Report 3/06, presented in November 2006, and Monetary Policy Report 1/07, presented in March this year, the krone appreciated more markedly than we had assumed. As a result, Monetary Policy Report 1/07 was based on the assumption that the krone would be somewhat stronger throughout the projection period. The exchange rate assumption in Inflation Report 3/06 is shown by the broken blue line in the chart on the left, while the broken red line denotes the exchange rate assumption in Monetary Policy Report 1/07. The isolated effect on the interest rate path of a stronger krone is illustrated in a box in Monetary Policy Report 1/07. As shown in the chart on the right, the stronger krone pointed to a somewhat lower path for the interest rate.
The slower catching up of the region is not a new phenomenon as it came on the surface right after the global financial crisis. Most of the post transition real convergence (around 60%) occurred in the 5-year period preceding the GFC, against the backdrop of the remarkably growth-conducive global context, rising globalisation and trade integration, as well as favourable terms of financing. Afterwards the convergence slowed down, and it took twelve years since 2008 up to the pandemic to achieve the pace pertinent for the five years pre GFC period. Now, with the global environment becoming highly uncertain, risk of deglobalisation and supply chains defragmentation becoming more certain, and tightening of the global financial conditions already in place, faster real convergence seems even more complex issue. In this vein, there are estimates that crisis has adversely affected growth potential of the CESEE region with average decline of 0.7 pp in 2020. 3/4  BIS - Central bankers' speeches  What are the main structural hurdles that prevent lifting of the growth potential and resilience? Growth accounting framework reveals that in the last decade the slowdown was mostly through the total factor productivity, while the growth in the region became more reliant on capital accumulation. Given the wide capital stock gaps compared to the more advanced countries, the accumulation of capital is warranted, and preferable way to grow. Yet, the fact that the other sources of growth seem to be muted, gives ground for concerns.

Anita Angelovska Bezhoska: Speech - National Bank of the Republic of North Macedonia 8th Research Conference Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the National Bank of the Republic of North Macedonia 8th Research Conference, co-organised with the European Investment Bank, Skopje, 28 April 2022. *** Respectable Minister of Finance, Mr.Besimi, Governors and central bank board members, VP of European Investment Bank, Ms Pavlova VP of European Bank of Reconstruction and Development, Mr.Bowman, Alternate Executive Director of IMF, Mr Dresse, Representatives of IMF, EIB, EBRD and BIS, Representatives of the banking sector, Representatives of academia, Distinguished guests, It is my great pleasure and honour to address you at the opening of the Conference co-organised with the EIB. This conference holds a special meaning for us. It marks three decades of monetary sovereignty, denoted by an independent central bank and stable national currency. It has been a long journey requiring a lot of efforts, knowledge and courage to withstand many turbulences. We have confronted many mountains at the very beginning of the transition in particular. However, as it is said "No matter how high a mountain you think has come in front of you- take small steps every day and you will eventually reach its summit''. Indeed, continuous prudent steps have resulted in a long-lasting delivery of low and stable inflation and exchange rate, as a foundation for the overall macroeconomic stability. Unfortunately, at this very moment we have once again faced new challenges, i.e.
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.

Higher wage growth and declining productivity growth are pushing up unit costs. Continued strong competition may prevent this cost increase from feeding fully through to prices. However, it is assumed that competition will curb inflation to a lesser extent in the period ahead and that high capacity utilisation and higher wage growth will gradually push up the rise in prices for domestically produced goods and services. As mentioned, there are probably several reasons why the rise in prices for domestically produced goods and services is picking up somewhat later during this cyclical expansion than the historical relationship between the rise in these prices and capacity utilisation would imply. Moderate wage growth has contributed to low inflation in recent years. The subdued rise in prices for imported, processed intermediate goods has curbed the rise in prices for goods and services. In recent years, competition has increased in many product markets. In many industries, high productivity growth has also had a dampening effect on inflation. Some of these factors may continue to influence inflation in the period ahead, albeit to a lesser extent than earlier. Inflation is projected to near the inflation target of 2.5 per cent as from 2008. At Norges Bank’s Executive Board meeting on 15 March, the key policy rate was raised by 0.25 percentage point to 4.00 per cent.
Taken at face value, the extraordinary policy measures implemented by the Bank, alongside those enacted by the Government, appear to have been successful in averting a deeper and more severe recession. And the hope now is that a sustained recovery in demand will follow consistent with the objectives of those polices. But the contribution of our asset purchases in bringing about this stabilisation is still an open question. One year on, what have we learnt about QE? Today, I will address three key questions. What is the theoretical foundation for such a policy? What are the key channels of transmission? And what can we say about its impact to date? These questions are critical for the operation of monetary policy. But they are equally important for the study of monetary policy. The financial crisis posed questions which the models most commonly used to analyse monetary policy were not well suited to answer. BIS Review 29/2010  1  There is an emerging literature that responds to these shortcomings. It is important – both for the theory and practice of monetary policy – that this continues. The theoretical foundation for unconventional monetary policy Let me turn first to the theoretical foundation for quantitative easing. Over the past 15 years, the canonical New-Keynesian New Classical synthesis model has become the benchmark for economists to study the operation of monetary policy.

** To conclude, I would like to stress that the completion of the Banking Union in Europe is one of the key elements of a broader ambition: the crucial strengthening of Economic Union. As Mario Draghi said on 11 May: "The people of Europe have come to know the euro and trust the euro. But they also expect the euro to deliver the stability and prosperity it promised. So our duty, as policymakers, is to return their trust and to address the areas of our union that […] are incomplete”. Beyond national democratic debates – there is no shortage of such debates today, both in Europe and elsewhere – this confidence in the euro is our shared asset everywhere. We are bound by this trust, while needing to respect reality, but also the urgency of time and – I think – of History. Page 6 of 6  i  “Risk-reducing and risk-sharing in our Monetary Union”, Speech by Mario Draghi, President of the ECB, at the European University Institute, Florence, 11 May 2018 ii Sapir, A. and Wolff, G. (2013), “The neglected side of banking union: reshaping Europe’s financial system”, note presented at the informal ECOFIN meeting in Vilnius on 14 September 2013.