samchain/econo-pairs-v1 huggingface dataset:
2  For an outline, see Asplund, M. & Friberg, R. (1998), “Links between competition and inflation”, Sveriges Riksbank Quarterly Review 3, Sveriges Riksbank. 3  See, for instance, Dutz, M. & Hayri, A., (1999), "Does more intense competition lead to higher growth? ", Discussion paper No. 2249, Centre for Economic Policy Research. Nickell, S, (1996), "Competition and Corporate Performance", Journal of Political Economy, No. 4. 2  BIS Review 25/2002  The relative price level in Sweden The price level in Sweden is approximately 28 percentage points higher than the EU average and 4 Sweden is thus, along with the other Nordic countries, one of the most expensive countries in the EU. There is a considerable spread of price levels within the EU, as illustrated in diagram 1. The price level in the most expensive country (Sweden) is twice as high as that in the cheapest country (Portugal). Sweden in general has higher prices on goods and services not traded across borders, while the price level for trade goods such as clothes and furniture is below or in line with the EU average. Diagram 1: Differences in price levels for private consumption in relation to the EU average 2000.

10  Government Bill 01/02:167, "Changes in the Competition Act for more efficient combating of cartels, etc.". BIS Review 25/2002  5  registered in a special product register containing information on the exact contents also hampers import competition as most other countries do not have such registers. The fact that the Swedish market is small means that it is not economically viable for foreign manufacturers to make the adaptation required by Swedish rules or legislation. The existence of recycling systems for cans and bottles also makes import competition more difficult in the soft drinks market (soft drinks are approximately 40 per cent more expensive in Sweden than the rest of the EU). The fact that requirements motivated by concern for the environment could impede competition does not, of course, mean that they should be abolished. On the other hand, this is a good argument for coordinating the various regulatory systems in Europe. The bank sector  As I am today speaking to people who work in the bank sector, I thought I would take the opportunity to say a few words on competitive conditions in this sector. The bank sector was characterised by extensive regulations right up until the mid-1980s, which acted as an impediment to dynamic development in this sector. Few new operators could enter and competitive pressure was fairly low. However, the deregulation that has occurred since then has radically changed this picture.
It has also shown a striking positive relationship with growth in GDP per head: for  19  For example, the models of Solow-Swann model (Solow (1956) and Swann (1956)) and Ramsey-CassKoopmans (Ramsey (1929), Cass (1965), Koopmans (1965)). 20  See, for example, Eichengreen (2014). 21  These are taken from Clark (2009) for the period up until 1750 and based on Bank estimates in the subsequent period. 4  BIS central bankers’ speeches  every £ rise in the capital stock per head since 1850, GDP per head has risen by £ per head. This, too, is just as Neo-Classical growth theory would predict. That same pattern is replicated across countries. Chart 6 plots the relationship between the capital stock and GDP per head since 1980 in a cross-section of countries. Clearly, countries are on different steps on the growth escalator. But in each case this escalator has moved relentlessly upward, with sustained rises in the capital stock associated with secular rises in per capita incomes. Yesterday’s investment has been today’s growth. Sociological roots of industrial revolution If this were the whole story of three industrial revolutions, the growth recipe would be simple. Growth, like surfing, would mean simply waiting for the next big innovation wave to break. Rising living standards would be not so much natural as preternatural, “suspended between the mundane and the miraculous”. 22 Because policymakers cannot part the waves or perform other miracles, public policy would have a minimal role.

Brian P Sack: Preparing for a smooth (eventual) exit Remarks by Mr Brian P Sack, Executive Vice President of Markets Group of the Federal Reserve Bank of New York, at the National Association for Business Economics Policy Conference, Arlington, Virginia, 8 March 2010. *  *  *  Thank you for inviting me to speak today. In my remarks, I will provide an update on the progress that the Federal Reserve is making toward preparing for a smooth exit from the extraordinary policy actions that were taken in response to the financial crisis. 1 I should note up front that I will not be providing any information about the likely timing of policy tightening; those decisions will be made and communicated by the Federal Open Market Committee (FOMC). Instead, I will focus my comments on the policy tools and strategy that are likely to be used whenever that exit becomes appropriate. I will also discuss the preparedness of financial markets for the Fed’s exit, in order to assess how financial conditions may evolve as the exit approaches and gets under way. When the time comes to tighten monetary policy, the Federal Reserve will be embarking on a tightening cycle like no other in its history. First, this tightening cycle will have two policy dimensions, in that the FOMC will have to decide on the path of its asset holdings in addition to the path of the short-term interest rate.
16  The curve has flattened  A lowering of the curve does not change the sensitivity of pay growth to unemployment, and changes in unemployment, will put pressure on pay growth in the same way. It will all just happen at a lower level. A flattening of the curve, however, reduces the sensitivity of pay growth to unemployment at all levels and to all rates of change of unemployment. This appears to have happened in some estimations of the post crisis estimations of the curve. 15  17  See Broadbent (2014)  16  This could result in a ‘double whammy’: pay growth would be accelerated higher demand for labour while at the same time the inflation adjusted curve would shift up, accelerating pay growth further. This can be seen in Chart 8: a fall in unemployment would result in moving from point A to point B (at higher inflation expectations) or point C to point D (at lower expectations). If those inflation expectations were to change at the same time that unemployment falls, the move would be from C to point B. See also Mishkin (2007). 17  See for example BIS (2017) and IMF (2013). Blanchard et. al. (2015) argue that since 1990 there is no statistically significant slope to a price Phillips curve in many countries, including the UK.

Conclusion In conclusion, although the Federal Reserve will be removing its policy accommodation in a much-changed money market environment, the Desk is ready to implement policy firming when the FOMC determines that economic and financial conditions warrant it. The minutes of the March FOMC meeting outline the Federal Reserve’s intended operational approach, and our testing program gives us confidence that we have the necessary tools to enable a smooth liftoff. The minutes highlight that policymakers will be particularly careful at the start because demonstrating appropriate control over the federal funds rate and other short-term rates is a priority. This may entail elevated aggregate capacity in an ON RRP facility at liftoff because we don’t know how much support we are currently getting from the zero lower bound, which creates some uncertainty about the demand for ON RRPs. However, the ON RRP will be used only to the extent necessary for monetary policy control because it has some potential financial stability and footprint costs associated with it. Moreover, the Federal Reserve has a number of backup tools should things work differently than expected, and policymakers will make changes as necessary as normalization proceeds. BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches  BIS central bankers’ speeches  15
24  The IPCC gives a range of budgets for future emissions which depends on assumptions about other climate drivers and the level of risk of temperatures going >2 degrees that society is willing to accept. It sets these in the context of existing fossil fuel reserves. See table 2.2 in IPCC (2014). BIS central bankers’ speeches  7  If that estimate is even approximately correct it would render the vast majority of reserves “stranded” – oil, gas and coal that will be literally unburnable without expensive carbon capture technology, which itself alters fossil fuel economics. 25 The exposure of UK investors, including insurance companies, to these shifts is potentially huge. 19% of FTSE 100 companies are in natural resource and extraction sectors; and a further 11% by value are in power utilities, chemicals, construction and industrial goods sectors. Globally, these two tiers of companies between them account for around one third of equity and fixed income assets. On the other hand, financing the de-carbonisation of our economy is a major opportunity for insurers as long-term investors. It implies a sweeping reallocation of resources and a technological revolution, with investment in long-term infrastructure assets at roughly quadruple the present rate. 26 For this to happen, “green” finance cannot conceivably remain a niche interest over the medium term. There are a number of factors which could influence the speed of transition to a low carbon economy including public policy, technology, investor preferences and physical events.

The Special Liquidity Scheme was designed to provide that support on a one-off basis, in large size and for a long maturity. The form of the Scheme was an asset swap (effectively a collateral upgrade). For a fee, the commercial banks were lent nine-month Treasury bills against a broad set of eligible collateral. In practice the collateral received in the Scheme was dominated by own-name residential mortgage backed securities (RMBS and covered bonds). The banks could use the Treasury bills to raise liquidity in the market, at a time when the primary, secondary and repo markets for RMBS were all closed. These bills were also eligible in the Bank’s repo operations. The Scheme was limited to lending against collateral that was held on balance sheet at the end of 2007. The principle was that the Bank shouldn’t support the banks in issuing new securities for which there might not be a private market or to subsidise new lending. 12 The fact that the Special Liquidity Scheme was a form of asset swap meant that it had no impact on the supply of central bank money and thus no direct implications for monetary policy. Following standard accounting practice, it was not on the Bank’s balance sheet. 13 The Scheme will expire at the end of January 2012. It will not be extended or replaced. After three years of large-scale liquidity support the Bank expects each institution to be in a position to fund itself through normal market mechanisms.
Thus, the Banco de España’s latest macroeconomic projections described a scenario of weaker momentum in activity and greater inflationary pressure than in the previous December 2021 projections. Specifically, the projections envisage that GDP will grow by 4.5% in 2022, 2.9% in 2023 and 2.5% in 2024. In the area of prices, the April projections pointed to an average rate of change of 7.5% in the HICP in 2022. Inflation is expected to then drop sharply to 2% and 1.6% in 2023 and 2024, respectively. It should be stressed that this sharp slowdown is based on two assumptions. The first is that there will be a slowdown in the growth of energy prices, in line with those on the futures markets. The second is that a moderate wage growth response and a squeezing of trade margins will prevent the emergence of the price-wage feedback loop. The economic outlook is, in any event, subject to a very high level of uncertainty. In fact, the information that has become available since these projections were published would, in the absence of further shocks, point to a new downward revision to GDP growth in 2022, due to developments in Q1 being more unfavourable than expected. As regards inflation, the new data suggest higher growth in the non-energy component, along with strong growth in the energy component, albeit somewhat more modest than expected in April.

Another important example of delegation to experts has been the creation of independent central banks to decide on monetary policy to deliver an inflation target set by government. Frustration with high inflation in the 1970s made many countries move towards de-politicizing decisions about monetary policy and interest rates. Research suggested that political pressure led to an ‘inflation bias’ in policymaking, which could be 8  solved by delegating responsibility for price stability to independent central banks. The following decades  1  Source: Ourworldindata.org Source: World Health Organisation 3 Source: The World Bank 4 Where poverty is defined as living on less than $ a day at 2011 prices. Source: World Bank (http://data.worldbank.org/topic/poverty) 5 Source: World Bank 6 Source The Food and Agriculture Organisation (FAO) of the United Nations 7 Until 46 BC, the calendar used in the Roman Empire consisted of 12 months of a total of 355 days, with the intention that an additional month would be added in some years so as to keep the calendar in line with the solar year (of 365¼ days). The pontifices had some discretion over the calendar, meaning they could use it for political advantage by lengthening or shortening the terms of Roman magistrates who were supposed to serve for a calendar year. This led to considerable confusion for ordinary citizens as to what date it was. Moreover, by the 40s BC the Roman calendar was three months ahead of the solar calendar.
The Bank of Albania is responsible for the formulation and implementation of the monetary policy, regulation and supervision of the banking system, regulation and development of the payment system, and promotion of financial stability. In the framework of the cooperation with SECO, it benefits not only in academic but also in concrete terms. The developed forecasting and analysis models enable the monetary policy to play a more proactive role, as testified in the successful management of appreciation pressures on the exchange rate in the previous year. Thanks to SECO-funded cooperation projects, the Bank of Albania has adopted contemporary models and methodologies for evaluating the adequate level of the foreign currency reserve – currently 1/3  BIS central bankers' speeches  standing at EUR 3.3-3.4 billion, managing liquidity in the banking sector, and withstanding adverse scenarios. Also, the study of various phenomena related to the functioning of the financial system has prepared the ground for the drafting and approval of a series of regulations, which – among others – have accelerated the process for the reduction of non-performing loans and will create a safer and more efficient regulatory environment with regard to managing financial shocks. Lastly, the cooperation with SECO has generated a number of projects, which are being currently implemented in the field of payment systems. One particular example is the national strategy for promoting the use of retail payments, which serves, among others, to lowering their costs, promoting remittances and boosting financial inclusion.

This agreement between the Bank of Albania and SECO, the centre of expertise for all core issues relating to economic policy, in Switzerland and not only, helps the Bank of Albania to fulfil the objectives, to carry out its duties and to withstand future challenges. 2/3  BIS central bankers' speeches  I would like to thank once again Mr Maître and the State Secretariat for Economic Affairs for the contribution to the Bank of Albania. I look forward to the fruitful and successful cooperation under the new agreement Thank you! 3/3  BIS central bankers' speeches
Greece’s problems Greece is the country that has lately been the main subject of speculation and discussion with regard to the sustainability of its public finances. Decades of substantial public-finance deficits have meant that Greece entered this recession with a gross public debt of over 100 per cent of GDP. The growth of the Greek economy has so far been less affected by the global economic downturn than the OECD average. This is partly explained by Greece’s relatively limited exposure to the world market but also by a considerable increase in public expenditure. This increase in expenditure, together with a slight fall in revenues, means that public sector indebtedness in Greece has increased to 115 per cent of GDP, and according to OECD forecasts from November it is expected to reach 130 per cent of GDP in 2011. (Slide: Gross public debt in Greece). The development of the central government debt in Greece, together with uncertainty about the country’s ability to actually carry out the far-reaching consolidation of its public finances, has caused Greek government bond rates to rocket. The market participants have seen an imminent risk that Greece will not be able to overcome its debt crisis without outside assistance. (Slide: Difference between Greece’s and Germany’s government bond rates). A couple of weeks ago, the euro countries reached an agreement, together with the IMF, on the design of a financial support package for Greece in order to safeguard financial stability in the euro area.

This condition is currently difficult to comply with, since banks are still in the process of setting up their MREL and, for some, it will not be easy to attain these thresholds as their access to the capital markets is limited, or there may be an adverse impact on their income statement. 4  BIS central bankers’ speeches  To date, the Single Resolution Board (SRB), the European resolution authority, has not taken a final, firm decision on the MREL, but everything suggests it will be demanding. At the Banco de España we advocate that the requirements should take into account the resolution strategy and should be prudent and adapted to banks’ economic and financial reality. In any event, cooperatives should build the concept of resolution into their planning and management, and continue working on the formation of voluntary and private mutual support mechanisms. Conclusion In sum, let me say that all the banking supervisors and regulators participating in this process are mindful of how important it is to finalise the Basel III review as soon as possible and of the significance of providing banks and market participants with certainty. I would not wish to conclude without reiterating the importance of a healthy and efficient cooperative sector, as it faces today’s challenges: the pressure exerted by the low interest rate environment on results, as is the case for other banks; the new regulatory demands; enhanced governance; the management and commercialisation of resources; and deeper association initiatives. Thank you for your attention.
So, as yet, we do not seem to be in a liquidity trap in which yields can be pushed down no further. What to my mind is a more open question, though, is the degree of traction these lower yields have on demand at the present juncture. Looser monetary policy works in large part by encouraging households and businesses to bring forward future spending to the present. It is plausible, however, that such intertemporal substitution will be weaker when uncertainty is elevated and when banks and some households are concentrating on repairing their balance sheets. For instance, a modest fall in the cost of capital may do little to boost investment spending when the environment is so dominated by uncertainty about the outlook for demand. To illustrate this, Chart 9 shows the results from CBI business surveys of the factors holding back investment spending at the current juncture. Uncertainty about the outlook for demand is far and away the dominant factor. That does not mean that quantitative easing is impotent, as demand will still be affected by the wealth effect from the higher asset prices, as well as by any related exchange rate depreciation. But I think there are reasons to believe the effect of lower yields may be weaker than usual at the current juncture (in old speak, the IS curve may be quite steep, even though the LM curve may not be absolutely flat).

During the crisis we and other central banks have been forced to undertake a much wider range of actions than we would normally contemplate, lending against a broader range of collateral and for longer tenors than usual, and intervening in markets where we do not usually operate. While many of the new facilities were invented on the hoof as the crisis unfolded and should become redundant once normality returns, they will nevertheless remain in the emergency toolkit in case of future need. 2  This uses Basel I risk weights, though it seems unlikely that measures of risk-weighted assets calculated under the Basel II or III rules would have performed that much better. 4  BIS central bankers’ speeches  But once the immediate crisis has past, how can central banks foster the recovery? There is now ample evidence (IMF, 2009; Reinhart and Rogoff, 2009) suggesting recoveries after recessions associated with financial crises are typically much more drawn out than those after “normal” recessions. For instance, a study by the IMF of 122 post-war recessions across 21 countries finds that, on average, output surpasses its pre-crisis peak around a year after the start of a “normal” recession. But that average period rises to 2½ years following financial crises. And the mean level of output across the 15 recessions associated with financial crises is still some 6% below a continuation of the pre-crisis trend some seven years after the onset of the crisis (though there is considerable heterogeneity in individual country experience, as Chart 3 shows).