samchain/econo-pairs-v1 huggingface dataset:
At the same time, I take this opportunity to reiterate that the incidence of the specific products in question on the final result of inflation is minor and does not alter the inflation outlook presented on this occasion or that we have presented in the past (figure 3). BIS central bankers’ speeches  3  The world economy has begun moving towards a more balanced configuration in many dimensions, including a narrowing of the growth gap between developed and emerging economies, the normalization of financial conditions and the prices of commodities. On the output side, the slowdown of emerging economies, partly offset by stronger growth of some developed ones, results in a downward revision to Chile’s main trading partners’ growth forecast by two and five tenths of one point in 2013 and 2014, respectively, as compared with our March Monetary Policy Report (table 1). In the developed world, the performance of the United States stands out. Its upturn has been accompanied by growing private consumption and a gradual recovery of real estate, with positive numbers from the labor market, credit growth and consumer confidence. Plus the momentum of investment in the energy sector that are pulling costs down. The Japanese economy grew strongly in the first quarter of the year and short-term prospects have risen in response to the current policies of fiscal and monetary stimulus, but the sustainability of this improvement is yet to be seen. The outlook for the Eurozone continues to point to a contraction this year.

Rodrigo Vergara: The Monetary Policy Report and the Financial Stability Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 1 July 2013. *  *  *  The Monetary Policy Report of June 2013 and the Financial Stability Report of the first half of 2013 can be found at http://www.bcentral.cl. Introduction Mr. President of the Senate’s Finance Commission, Senator Andrés Zaldívar, senators members of this Commission, ladies and gentlemen, I appreciate your invitation to present our Board’s vision on recent macroeconomic and financial developments, their prospects and implications for monetary and financial policy. This vision is contained in detail in our Monetary Policy Report of June 2013 and our Financial Stability Report of the first half of 2013. The macroeconomic scenario facing the Chilean economy has undergone significant changes in recent months. Output and demand decelerated and, although some moderation in their growth rates was expected and desirable, the first quarter brought a sharper adjustment than had been anticipated. On the external front, there have been significant developments in the composition of global growth, the trajectory of commodity prices and the evolution of global financial markets. From a medium-term perspective, recent developments point to a healthy normalization of the unusual international conditions that have prevailed for some years now, and their effects on our local economy.
Temple Grandin (2011), comments based on a telephone interview in 2011, for further details please see: http://www.templegrandin.com/ Tetlock, P (2015), “Super forecasting: The Art and Science of Prediction”, ISBN: 978-1511358491 Todd, P and Gigerenzer, G (2012), “Ecological Rationality: Intelligence in the World”, Oxford Scholarship Online Walton, G and Spencer, S (2009) “Latent ability: grades and test scores systematically underestimate the intellectual ability of negatively stereotyped students”, Psychological Science Vol 20 Watts, D (2002), ‘A simple model of global cascades on random networks’, Proceedings of the National Academy of Sciences 9: 5766-5771. Wozniak, D, Harbaugh, W, Mayr, U, (2009), “Choices about competition: differences by gender and hormonal fluctuations, and the role of relative performance feedback”, University of Oregon Working Paper  18  BIS central bankers’ speeches  Figure 1: The Sneetches  Source: Dr Seuss (1953)  Chart 1: Incidence of the word diversity in books printed since the 16th Century  Source: Google Ngram Viewer. BIS central bankers’ speeches  19

01.04.2022  Conference "Rebuilding Social Capital: the role of central banks” Banco de Portugal Pablo Hernández de Cos Governor  Thank you very much Pedro. Thank you, Mario for the invitation. And congratulations to all the staff of the Banco de Portugal for this commemoration. The Banco de Portugal has indeed built an excellent reputation among the central bank community over all these years. It is surely a good starting point for the Banco de Portugal to rebuild social capital here in Portugal. As Lucrezia said, the topic of the conference — the role of central banks in building social capital — is a rather complex question. I will try to simplify it a bit, perhaps too much. I will approach the topic from one angle, which is related to the reason for the specific institutional setting that we, central banks or supervisors in general, have as compared to other public authorities, which is essentially one of independence, or autonomy, if you prefer. It is interesting to go back to the original reason why we want central banks and supervisors to be independent. This is based on the evidence that we have on the determinants of longterm growth, which points to the importance of the quality of institutions. Good quality of institutions is important in particular to allow long-term considerations to be incorporated into the decision-making process. This is, for me, the most relevant argument justifying independence of central banks.
Several legal reforms to ensure budgetary discipline and sustainability have contributed to these developments. Among those I would highlight the 2011 Constitutional reform which enshrined the principles of budgetary discipline and fiscal sustainability the maximum legal status; the 2012 Law on Budgetary Stability and Financial Sustainability which sets these principles in Spanish legislation; and the creation in 2013 of a new Independent Fiscal Responsibility Authority. Pension reform The recent pension reform aims at achieving financial sustainability of the Social Security System. It provides automatic mechanisms to absorb the challenges originated by the foreseen gradual ageing of the population and those from adverse developments in the economy. The most important change has been the establishment of a new mechanism for calculating the annual revaluation of pensions and the introduction of the so-called “sustainability factor” from 2019 onwards. The revaluation formula sets an annual pension increase based on the system’s budget constraints, replacing the previous mechanism in which this increase was linked to changes in the CPI. The sustainability factor is an automatic mechanism linking the initial retirement pensions to life expectancy. The Spanish financial system Now, I will briefly comment on several issues relating to the current situation of the Spanish banking system. After experiencing a severe crisis, far-reaching reforms have been implemented in the Spanish banking sector.

The core principles of the science’s consensus remain valid today. Page 3 sur 8 In particular the two first principles—central bank independence and the primacy of price stability—remain essential for the credibility of the central bank. We are benefiting from it today through the—so far—relatively firm anchoring of longterm inflation expectations despite the surge in current inflation. This being said, we should acknowledge that new questions have arisen with the unexpected return of high inflation. Let me highlight three. A first question is the slope of the Phillips curve. To the enduring debate of whether it had flattened since the 1970s we must now add the question of whether it could be steepening again in the current inflationary environment. The question is central to assess how to quell inflation without engineering a harder than necessary landing of economic activity. Second, we still have to understand better how inflation expectations influence actual inflation. In recent years, we have made considerable progress –including at the Banque de France—in measuring the expectations of firms and households, which are the ones that matter for price-setting and spending decisions. iv But there is still relatively little empirical work on how their inflation expectations map into their actual pricing and spending decisions. v What the extent of pass-through from inflation expectations to inflation is, or whether past inflation plays a role beyond inflation expectations remain open questions. vi  Page 4 sur 8 Third, what about forward guidance? It was a decisive input of science, thanks to Eggertsson and Woodford.
This may help to mitigate the slowing in consumption, both because households may find it easier to borrow to smooth their consumption if they still have a job and because it may limit the extent to which households increase their savings as a precaution against the possibility of future job losses. Further out, the prospects for consumption will depend importantly on the extent to which the deterioration in households’ financial position does indeed cause them to scale back their spending. As I have argued, there are good reasons for thinking this may happen. But it is also important to remember that there has already been a substantial adjustment in consumption; and that conventional measures of household balance sheets may exaggerate the scale of deterioration. Policy Let me conclude with a few remarks on policy. The current focus of monetary policy is on ensuring that there is sufficient stimulus in the economy to generate the strong and sustained recovery necessary to bring demand better into balance with supply and so ensure that inflation is on track to meet the inflation target. As I have said, the structural adjustments that need to occur – to the structure of the banking system; to the balance of global trade flows, and to the level of public and possibly  6  For more information see the box on page 29 of the August 2009 Inflation Report. BIS Review 114/2009  5  household debt – have the potential to delay and derail the recovery.

You’ll see that the vast majority of these countries have unemployment rates below 10% and that only two of them, Spain and South Africa, surpass the striking 20% threshold. Sometimes these high figures are attributed to other structural factors, such as the lower level of educational attainment and productivity. On other occasions, more conjunctural factors such as the real estate bubble are mentioned. But if we compare ourselves with other countries, the difference is a legal and institutional framework that seriously hampers labour supply. Because, as you can see, these 40 countries include the developed and less developed; some that have not had a real estate bubble and others that have, even bigger than Spain’s; some with a higher level of educational attainment than Spain, but many others far below us; countries with high productivity per employee, but others with much lower productivity than Spain. And yet, as I said, most of them have single-figure unemployment rates, at less than half the Spanish rate. But perhaps where it can be most clearly seen why our unemployment problem is caused by a singular institutional and legal framework that hampers employment is the performance of unemployment not at times of crisis as at present, but during boom periods. As you know,  2  BIS central bankers’ speeches  the lowest unemployment rate we have achieved, namely 8% in mid-2007, is far higher than that in the other European economies when their growth was highest.
As long as the provider of the annuity, typically an insurance company, knows how long we will live on average, then additional payments to the long-lived will be exactly offset by fewer payments to the short-lived. By pooling risks, annuity providers can offer insurance against longevity. But to offer a single annuity is risky. In Sense and Sensibility, Fanny Dashwood explains to her husband the drawbacks of providing an annuity to his family: “if you observe, people always live forever when there is any annuity to be paid them. An annuity is a very serious business; it comes over and over every year, and there is no getting rid of it”.18 Only a small fraction of savings are invested in annuities.19 One explanation for this is that annuity providers find it difficult to distinguish the healthy from the sick ex ante, the former purchasing more annuities than the latter, leading insurance companies to offer annuities on less attractive terms thus discouraging their purchase.20 This “adverse selection” is important - it is approximately 20% more expensive to buy annuities as an individual than in a group scheme.21 Collective risks raise additional problems. Longevity risk to a particular cohort can be shared only across generations. Those generations who are alive today can pool risks through financial markets.

The supply might come from lifeinsurance companies, who benefit from increased longevity to the extent that fewer early deaths mean lower claims, and financial intermediaries collecting the savings of those younger investors prepared to bear some of the longevity risk of the old.24 How close private markets can get to providing the optimal amount of risk sharing is hard to say. Private annuity markets which could pool individual longevity risk are small. For collective longevity risks, the burden of unexpectedly high longevity for a particular cohort should be spread over as many generations as possible. In theory, this provides a potential role for government to share risks across generations. 18  Fanny Dashwood is claiming that annuities lead to “moral hazard” to use the modern jargon: the provision of an annuity changes behaviour in a way that increases life expectancy. 19  See Yaari (1965) and Davidoff et al. (2003). For a discussion of pension arrangements in the US see Diamond (2003, 2004). 20  For a theoretical study of annuity provision under adverse selection, see Brugiavini (1993). 21  Finkelstein and Poterba (2004), for instance, note that 65 year old men who voluntarily buy annuities live about 20 percent longer than other men. Pauly and Zeng (2003) found that in the United States adverse selection made it impossible for a private market in prescription drug insurance to function.
To entrench the recovery will necessarily require absorbing large numbers of unemployed; the reversal of unemployment’s harmful effects on confidence and public finances; restoring health to the financial position of households and firms; and, in sum, the restructuring of a growth model that was not sustainable, especially under the new conditions created by the international crisis. And, as I have reiterated on many occasions, to do this it will be vital to adopt ambitious measures and reforms. The economic policies pursued since the start of the crisis have focused, logically, on countering the contractionary forces at play, and the efforts deployed have contributed to lessening their impact. But now the slump phase has bottomed out and there are signs of a possible stabilisation, we must adopt an approach geared to absorbing the most negative effects of the crisis, such as the high level of unemployment and of the budget deficit, by addressing the structural problems of the Spanish economy so as to restore its growth potential and to prevent the risk of a scenario of prolonged economic slackness from materialising. The demand-side policies pursued to combat the economic crisis have been very energetic. The cuts in official interest rates by the ECB have fed through to interbank markets and to credit transactions, and although borrowing conditions remain very tight, as a result of the upward revision of credit risk, the decline in interest rates is undoubtedly contributing to alleviating the financial pressure on the private sector.

We are at a crossroads where economic policy action may be decisive in setting us once more on a path of growth and increasing well-being. My testimony today, as part of the Parliamentary discussions on the Budget, offers me an opportunity to analyse the role budgetary policy should play and the need for this policy to be underpinned by a series of structural reforms that remove the obstacles to a recovery in economic activity, in employment and in public finances. I shall begin with a brief reference to the international setting and to the economic outlook for the euro area. It is well known that these settings determine the behaviour of monetary policy. Regarding this latter point, allow me to remind you that the ECB Governing Council will meet later this week; accordingly, my appearance here is during what we call purdah period, and my comments should not be interpreted, under any circumstances, as a prelude to or anticipation of the monetary policy discussions or decisions at this meeting. After several quarters of continuous deterioration which led the world economy to the biggest contraction since the Second World War, the latest economic indicators are beginning to point to a pick-up in activity and in international trade, which is more evident in the emerging than in the more advanced economies, where the signs of improvement are somewhat more incipient.
This has played a major role in the ongoing reduction in Iceland’s foreign debt, as I will touch on later. Inflation has been at or below target for two full years. This is the longest such period since inflation targeting was adopted 15 years ago this Easter. And it has happened in spite of steep wage increases, which under typical conditions would have generated much higher inflation. But it so happens that conditions are far from being typical. Iceland’s terms of trade have improved markedly with the decline in oil and commodity prices, and tendencies towards deflation can be seen widely abroad. This has worked to counteract domestic inflationary pressures. At the same time, exports of goods and services have grown strongly, not least because of the booming tourism industry. According to newly published figures from Statistics Iceland, national income grew by nearly 8% in real terms in 2015, looking through the failed banks’ estates. When national income is measured, GDP is adjusted for income that reverts to non-residents and for changes in terms of trade. This tells us more about purchasing power in the economy as a whole than GDP does, and it explains in part why the recent wage increases have thus far generated much more real wage growth than inflation. There has been a substantial change recently in Iceland’s net external debt. According to newly published figures, external debt amounted to 14½% of GDP at the end of 2015.

The improvements in productivity registered in many countries at the end of the 1990s have further contributed to reducing inflation. While inflation has stabilised, the fluctuations in asset prices and exchange rates have scarcely declined. The rise in asset prices, the decline in private savings and the credit boom that took place in many countries at the end of the 1990s created fears that major financial imbalances would accumulate. This applied in particular to the USA, but similar patterns were demonstrated in other countries, including Sweden. There was concern that if asset prices fell, this could trigger processes that would eventually result in a very deep and prolonged economic downturn. If monetary policy were strictly oriented towards an inflation target and inflationary pressure were low, this would lead to relatively low nominal interest rates. It could mean that the scope for using monetary policy to stimulate the economy in a deep recession was limited – problems with the “zero bound” could arise. Comparisons with developments in Japan in the late 1980s and afterwards seem appropriate here. Even in a minor economic downturn, credit restrictions at the banks caused by large losses could reduce the effectiveness of monetary policy. Measures that could prevent financial bubbles arising and reduce their consequences were thus discussed. Was there, for instance, reason and opportunity as a preventive measure to take into account asset prices when formulating monetary policy? Could solicitude for financial stability motivate interest rate changes?
First, our public sector purchases are typically guided by the capital key, thus limiting the scope for tilting strategies. Second, green bonds currently account for only a negligible share of public sector issuance in  the euro area. [42] Third, the availability of comparable climate-related data for sovereign issuers is limited. [43]  These and other considerations are key elements of our ongoing strategy review. In line with a recent NGFS publication[44], we will carefully evaluate potential implementation strategies based on their potential contributions to mitigating climate change, their operational feasibility, their capacity to reduce our own risk exposure, and their consequences for monetary policy effectiveness. Despite these implementation challenges, it is imperative that central banks ambitiously explore the scope for adjusting their monetary policy operations to take climate change into account within the limits of their legal mandate. Conclusion Let me conclude. Even though governments should assume the leading role in the global fight against climate change, central banks cannot remain idle. As part of society’s collective effort to combat global warming, we have a responsibility to explore our capacity to act. Financial markets play a pivotal role in funding green innovation. Central banks, in turn, can help guide the actions of market participants. By providing early indications of our planned policy measures and setting an example for other financial market participants, we can act as a catalyst to help accelerate society’s transition to a carbon-neutral economy in line with our mandate.

Some calm has come to the external financial markets, originating, among other causes, in the announcements that steps will be taken towards a banking union and the statements by the governor of the European Central Bank regarding the possibility of shortly implementing a sovereign bond purchase plan, upon previous political agreement on a fiscal austerity program. Besides, no significant sovereign debt payments from peripheral economies have fallen due in the past several weeks. However, the region faces a tough path, because of considerable difficulties to carry out these actions. For example, how a banking union for the  4  BIS central bankers’ speeches  Eurozone could be materialized is unclear and, for the time being, there is no unanimous support from member countries. In addition, there is the negative outlook placed for Germany’s and other central Eurozone economies’ ratings. Plus, in the coming months, several events will occur that may revive market tensions. For September there is, among other developments, the evaluation of the tripartite group on the degree of compliance with agreed adjustments in Greece and the possibility of a new program, aside from the voting at the German constitutional tribunal on the legality of the ESM. For October, there is a strict calendar of debt maturities in Spain, which entails refinancing obligations in international markets. The impulse from abroad on the Chilean economy will be somewhat milder than was foreseen a few months back.