samchain/econo-pairs-v1 huggingface dataset:
On average, the inflation rate amounted to just under 2 per cent a year during the period 1993-2002, and the budget balance was turned around from a deficit of 12 per cent of GDP in 1993 to a surplus of 4 per cent in 2001. Real wages increased on average by 2 per cent a year, which can be compared with the stagnant or even declining real wages in the 1970s and 1980s. At the same time, unemployment was halved from 8 per cent in 1993 to the current figure of 4 per cent. Thus, the Swedish economy is currently in a much better condition than it was 10 years ago. However, there are many indications that it may become more difficult to combine a good growth rate with a low inflation rate in future. At present there is no unutilised capacity in the economy as there was directly following the crisis at the beginning of the 1990s. It also appears as though the labour supply will grow at a slow rate in the near future as a result both of demographic reasons and of a high rate of absence due to sickness. This impairs the opportunities for growth in the Swedish economy. It could also mean that, when the economy shows an upswing, the Riksbank will be forced to conduct a tighter monetary policy to prevent tension arising between supply and demand on the labour market.

However, it was also observed in the report that there was a risk that wage cost increases in coming years could be higher than this figure of 4-5 per cent. At our meeting in February we saw no reason to make any appreciable change to this assessment. The newly-received statistics on wages and prices have not reinforced the upside risk. The National Accounts for the third quarter of 2002 and the revisions for earlier quarters made by Statistics Sweden indicate that productivity growth last year may have been slightly higher than we anticipated. In addition, the outcome in the short-term wage statistics showed lower increases than expected in the central government sector. However, the local bargaining rounds are not yet complete and retrospective revisions will be made, so the statistics should still be interpreted with caution. Other factors here are price rises on electricity and oil, which could contribute to higher wage demands if they influence the view of future inflation. The long-term scope for wage increases The Riksbank has the task of ensuring that the inflation target is achieved, broadly speaking regardless of how wage costs develop. Developments in wage costs play an important role, as they influence inflation, but we do not really need to decide whether one particular development in wage costs is more favourable than another. At the same time, it is evidently good to have a wage development that makes it easier for the Riksbank to conduct its monetary policy and safeguard low inflation without overly high real costs.
His paper "Monetary Policy Today: Sixteen Questions and About Twelve Answers" followed up on a previous assignment he discharged in the form of a key-note dinner speech in Frankfurt in 1999, at what was the first research conference organised by the then brand-new European Central Bank. What I found noticeable from Professor Blinder’s 2006 presentation was that the list of issues had grown longer rather than shorter since 1999 (from 15 to 16), although he noted that this should not be misinterpreted as lack of progress. It was the result of dropping four issues from his list – because, in his view, they were either resolved or had moved out of the radar screen – and  BIS Review 132/2007  1  adding five. Most remarkably, among the issues that had been dropped were low and stable inflation as the central goal of monetary policy, and central bank independence. I think Professor Blinder was right to remove these issues from his list. There is a broad agreement among academic economists and policy makers alike that maintaining price stability is the best contribution that monetary policy can make to support sustainable growth and job creation. This consensus reflects the fundamental tenet that, as the rational expectations literature has helped us understand 1 , there is no trade-off between growth and inflation at horizons longer than the short run, and that the real effects of monetary policy are short-lived and uncertain.

They are particularly useful because they are able to summarise a vast amount of information and analyses within a coherent and internally consistent accounting and economic framework. However, unlike in the case of inflation targeting strategies, they do not constitute the main vehicle around which the policy process and communication are organised. The Governing Council of the ECB bases its policy judgment on these and many other inputs, which include inter alia competing forecasts from other private and public organisations as well as other pieces of information that, for a number of reasons, are difficult to integrate within the framework of the projections. By way of example, information (i.e. data, indicators, analyses, etc.) that becomes available after the cut-off date for the projections cannot, by definition, be incorporated in the exercise. At a more fundamental level, we should acknowledge that even the state-of-the-art macroeconometric models of the kind used nowadays by leading central banks are, as yet, unable to fully incorporate a richer description of the economy’s financial structure. Wealth effects, swings in asset prices, credit and liquidity constraints and other financial frictions are not sufficiently taken into account. That results in an over-simplified view about the channels through which monetary policy can affect economic activity and inflation. It also affects the ability of such models to identify, and hence estimate with any degree of precision, the potentially significant role of financial variables and financial intermediation in the monetary transmission process.
Examining comparable 7  countries and the risks facing them suggests that this is not clearly the case. Furthermore, we must not forget that foreign exchange reserves can grow rapidly in small countries, as our own history illustrates, but they can also be depleted more rapidly than in large countries when shocks strike. Various small countries with their own currency and independent monetary policy have reserves equal to a third or more of GDP, among them Israel, Peru, Singapore, Switzerland, and the Czech Republic. Iceland is currently in the middle of the one-third of countries with the largest reserves but, with one exception, it has proportionally the least foreign currency reserve assets among the countries that have established a sovereign wealth fund. Honoured guests: I have spoken at length about monetary policy, the exchange rate, and the foreign exchange reserves, three topics of current interest. I have devoted less time to the financial system, which I discussed in greater depth last year. The Bank’s Financial Stability report will be published next week, however, and risks in the financial system will be covered thoroughly there. It is no secret that there are growing concerns about the housing market, and it may well be that macroprudential tools will be activated in the near future so as to mitigate the risks attached to it.

30 March 2017  Speech Már Guðmundsson, Governor of the Central Bank, delivered at the 56th Annual Meeting of the Central Bank of Iceland, 30 March 2017. Prime Minister, Minister of Finance and Economic Affairs, Speaker of Parliament, bank directors, foreign ambassadors, ladies and gentlemen! We have come together today for the 56th Annual Meeting of the Central Bank of Iceland. At the time of last year’s meeting, the domestic economy was considered relatively strong. GDP had risen above the pre-crisis peak. National income had risen even more in recent years because of improved terms of trade. Unlike many previous periods of full employment, the economy was well balanced internally and externally, as could be seen in a two-year period of inflation at or below target and a sizeable current account surplus. This was a good position, but we also realised that it could be fragile, as demand pressures were mounting and there was a real risk of overheating. Developments internationally had been favourable for us in many ways, but the tide could turn. We therefore needed to be on the watch, and economic policy had to take this risk into consideration. Then what do we say now, when growth has accelerated even further and demand pressures are even greater, yet inflation has remained below target, inflation expectations have subsided to target, the 2016 current account surplus was at a historical high, and we own more than we owe abroad?
Percent 16 Inflation Inflation target  14 12 10 8 6 4 2 0 1960  1968  1976  1984  1992  2000  2008  2016  Sources: Statistics Norway and Norges Bank 6. See Richard Clarida og Daniel Waldman (2008). “Is Bad News about Inflation Good News for the Exchange Rate? And, If So, Can That Tell Us Anything about the Conduct of Monetary Policy?” In: John Campbell (ed.) Asset prices and monetary policy. National Bureau of Economic Research Books, University of Chicago Press. 7. The mechanism can be described based on the Aukrust model. A weaker krone increases the wage capacity of the manufacturing sector, which sets the wage norm. Increased wage capacity can lead to higher negotiated wage increases. Since wage growth in manufacturing sets the standard for wage growth in the rest of the economy, wage growth in sheltered sectors will also increase. These sectors can more readily pass on higher costs to prices, driving up overall inflation. Higher inflation can, in turn, lead to a further krone depreciation, if the foreign exchange market does not have confidence in monetary policy. Norges Bank  Economic perspectives 2023  7  First, the world is hit by a pandemic. We know the story: Much of the economy is locked down, large-scale government support is provided, and central banks pursue a highly expansionary monetary policy. In May 2020, Norges Bank reduces its policy rate to zero.

2/4  BIS - Central bankers' speeches  There is also uncertainty surrounding geopolitical developments and the impact on the supply side if events on the ground worsen and they create further energy and commodity price shocks and disruptions. In such case, inflation and output would be worse than projected in 2023 and 2024. On the other hand, if there is an improvement in geopolitics, energy prices may fall as rapidly as they rose. Therefore monetary policy has to act in the middle of a lot of uncertainty in a number of areas, hence monitoring and pacing is still very important. Domestic economic developments Let me now turn to domestic economic developments. The Cyprus economy, continued to record noteworthy GDP growth, despite the outbreak of the war. Real GDP growth in Cyprus expanded by about 6 percent during the first half of 2022, mainly driven by a faster than expected recovery in tourism-related activities and, to a lesser extent, by growth in information and communication activities and in professional services. At the same time, weakness in the Cyprus GDP performance could be expected to become visible towards the end of 2022 and the first half of 2023, primarily owing to the anticipated worsening in the international economic outlook, which also has an impact on the domestic developments. For 2023, GDP growth is expected to reach 2.5 per cent. In terms of inflation, the Harmonised Index of Consumer Prices (HICP) reached 9 percent in September 2022 compared with 3.6 percent in September 2021.
But the themes of that time are remarkably topical – embracing new technology to improve risk mitigation and innovation in financial market infrastructures and working together between public and private sectors to achieve common goals. Fairly or otherwise, the post-trade sector does not always have a reputation as being the most forward-thinking when it comes to reform. In a speech in November 1996, the Bank’s then-Governor said the following: “For many years, payments and settlements risk was largely disregarded as an administrative matter for the “back office”. Perhaps not surprisingly, as the numbers have grown there has … been a growing awareness – among both commercial and central bankers – of its crucial importance, so that it has moved up the agenda, from the back office to the board room.” I am not sure those issues have been neglected quite as badly in recent years as they were then – but, given the changes afoot, we are I believe entering another period where central banks and market participants will again need to show real ambition, and work closely together to harness the potential benefits of another wave of innovation in ways that maintain stability for all. Thank you. 9  See http://www.bankofengland.co.uk/banknotes/Pages/digitalcurrencies/default.aspx and http://www.bankof england.co.uk/research/Pages/onebank/cbdc.aspx. 10  http://www.bankofengland.co.uk/Pages/fintech/default.aspx. 8  BIS central bankers’ speeches

We have high prudential standards and rigorous supervision that give market players confidence. And we are at the crossroads of Asia, which is growing significantly faster than the Western economies. 2010 was a good year for Singapore’s financial centre. The financial services sector grew by 12% last year. Several specific factors in Asia underpin the demand for financial services provided by Singapore: increase in trade, demand for infrastructure investments, rise of Asian corporates, and growth of individual wealth. As a well regulated and diversified international financial centre, Singapore plays a natural role in facilitating trade and  4  BIS central bankers’ speeches  investments in the region. High regulatory standards and a conducive business environment will continue to support stable growth in financial services. Conclusion Before I conclude, I want to highlight one more significant theme. This year marks MAS’ 40th anniversary. MAS is where it is today because of the outstanding contributions of its staff – both past and present. The economic and financial stability that Singapore has enjoyed is the result of tireless efforts of generations of MAS officers. They have helped to secure for Singaporeans a low rate of inflation, preserve the purchasing power of our official foreign reserves, keep our financial sector safe and sound amidst crisis and change, and grow Singapore as a vibrant and trusted financial centre. But MAS could not have done this alone. I would like to thank the financial services industry and all our partners for working alongside MAS to meet its objectives.
The dominant role of the household sector in the early stages of the recovery is not particularly surprising: businesses are likely to need a sustained pickup in demand before they have either the need or the confidence to increase capacity. But the durability of the recovery will depend on the baton of growth being handed over to the corporate sector, whose spending and investment will help to foster stronger growth in productivity and real incomes. And here the reduction in uncertainty may continue to play an important role. It’s perhaps easy to see how reduced uncertainty may help to prompt a one-off increase in business spending, as companies move away from defensive, wait-and-see strategies and blow the cobwebs off plans for deferred investment projects. But the impact of diminished uncertainty may stretch beyond simply a short-run boost. In part that reflects the possibility that the combination of reduced uncertainty and increased spending by households and companies may become self-reinforcing: reduced uncertainty helps to spur additional spending and investment, which in turn further reduces uncertainty about future demand and so on.7 Movements in uncertainty can amplify the recovery just as they amplified the downturn. This virtuous circle may be enhanced by the benefits reduced uncertainty can have for the supply-side of our economy. Increased investment will add to our productive capacity. A strengthening labour market may give employees confidence to move jobs, so better aligning available skills with vacancies.

The member countries can decide on an appropriate name and the structure of the apex body. For convenience, I have taken the liberty to name it as the SAARC Payments Council (SPC) which can be chaired by a member central bank or co-chaired by two central banks. The Council should draft vision and mission statements for the SAARC region and prepare a road map for payment reforms for the next 5 – 10 years, taking into consideration the modernization that needs to be attended to by member countries at national and regional levels. Under SPC, there should be several task forces consisting of senior officials of central banks and other financial institutions directly involved in payment and settlement related activities who will attend to the preliminary work, such as stocktaking and identification of gaps in the national payment systems. There should be task forces on (a) policy and operational matters; (b) legal and regulatory aspects; (c) technical and institutional infrastructure; and (d) communication and exchange of information. The task forces should make their recommendations to the SPC, which will take considered decisions. In nominating members to the task forces, where possible, countries should select officers from their respective NPCs, as such councils are expected to have representatives of all stakeholders with the necessary skills and expertise to handle work relating to the above areas. Sri Lanka has already established an NPC with a clear mandate to take forward payment reforms across the nation.
Amongst other examples, recent work by Jeremy Stein and Samuel Hanson at Harvard and, subsequently, by a Bank of England team11 has found some evidence that changes in Federal Reserve and Bank of England policy rates are accompanied by material (similarly signed) changes in long-term real forward rates. This is striking given the usual assumptions about monetary policy being both credible (no effect of cyclical policy on long-term inflation expectations) and neutral (no effect on real magnitudes beyond cyclical horizons). While, I must stress, not proving anything, this is consistent with a group of investors responding to lower short-term rates by moving along the maturity spectrum in a “search for yield”. That interpretation is, to my mind, fortified by a finding, for the US, that the effect on long forward real rates is greater when short nominal rates are low. Imagine the behaviour of asset managers who have guaranteed a minimum nominal return to investors. This is the “carry trade” – perhaps mythical for many years to many economists as there is a flavour of “irrationality” around it, but part of the fabric of the world for practitioners. Although current mainstream “structural” models of conventional monetary policy do not work like that, perhaps we should not be too amazed.

It means being ready temporarily to raise regulatory requirements above their minimum level when risks from the economic and financial environment exceed anything remotely calibrated into the standards that apply in broadly normal conditions. And it means promptly relaxing those extra requirements once the risk to stability has passed. This is a massive step. No one is pretending that the policy community knows how to cast it in terms of a numerical target or a uniquely useful set of indicators, against which society can monitor us. And that underlines the importance of Parliament itself approving the instruments granted to the FPC, and of our being sufficiently transparent to enable public scrutiny of and debate about our analysis and policy decisions. The Bank/FSA Discussion Paper on macroprudential instruments published last December was a contribution to that.25 Back to current account imbalances: they do matter But that is not all that we, policymakers, should be modest about. If, as I believe, macroprudential policy can prospectively fill a gap, we must not pretend that it can be a cure for everything. Even if we had avoided the worst consequences of seriously suboptimal gross capital flows – a badly overlevered banking system dependent on flighty wholesale funding – there would still have been the problem of unsustainable global current account imbalances. Whether the eventual adjustment would have been disorderly and how costly is hard to tell.
The experience at federal level motivated various cantons to follow suit. This has proved to be a very effective fiscal policy reform. The debt brake is a rule that links expenditure to the amount of cyclically adjusted revenue. It aims at a balanced structural budget over the medium term. Fiscal policy maintains a countercyclical profile through the mechanism of automatic stabilisers. The strict implementation of this rule led to  BIS central bankers’ speeches  5  significant budget surpluses in the boom years preceding the global financial crisis. Importantly, the debt brake has made it possible to regain control over public spending, which had steadily increased during the 1990s. Since the main focus of the debt brake rule is on long-term sustainability, the framework leaves little room for discretionary spending. The Federal Government can make an exception and allow additional emergency spending only in the event of a proven severe crisis. During the recent crisis, the healthy state of Swiss public finances enabled the automatic stabilisers to play their role to the full extent, which contributed to supporting the economy, without threatening medium-term fiscal stability. In particular, public spending on the unemployed and short-term workers increased significantly, while income and profit tax revenues decreased. Contrary to what we have seen in other countries, no tax increases or austerity measures were needed to correct the public finance trajectory. This has had a positive impact on households’ disposable income, and hence on both private consumption and business confidence.

Both new and current Member States alike will be able to enjoy the mutual benefits of a wider Union, in particular from the expanded internal market, as the cases of past enlargements showed. Trade integration has already reached a high level in the acceding countries, where 67% of the total exports and 60% of total import stems from the EU. Both the current and new Member States have prepared intensively for enlargement. Let me first focus on the situation in the new Member States and then in the present Union members. I will concentrate on the ultimate objective of enlargement from the monetary standpoint, namely the future adoption of the euro by the new EU Member States. The acceding countries have made remarkable progress in recent years. They significantly advanced macroeconomic stabilisation and structural reforms. Moreover, the former centrally planned economies have been able to establish functioning market economies. Overall, the progress they have made so far is encouraging. There remain, however, great challenges. The key ones are to advance real convergence while safeguarding and, where necessary, enhancing macroeconomic and financial stability. Locking in inflation at low levels, preserving the soundness of the financial sector, correcting of unsustainable external imbalances in a few cases and renewing efforts towards fiscal consolidation are all of the utmost importance. Moreover, the gap in per capita income between the  BIS Review 23/2004  1  current and most of the new Member States remains large.