samchain/econo-pairs-v1 huggingface dataset:
And second, as immigrants are much more mobile than natives – both across and within borders – labour supply becomes more responsive to changes in economic conditions. This helps reduce labour market tightness in the presence of positive demand shocks, and softens upward wage and price adjustments. Therefore, the higher mobility of immigrants across countries, sectors and occupations gives a better output-inflation trade-off. In other words, we can sustain bigger and longer-lasting expansions with more moderate effects on inflation. But the cross-border mobility of immigrants is greatly affected by how strict the receiving country’s immigration policies are. Immigrants will return home more willingly, or move temporarily to an alternative destination, when re-entry is easier. Governments should take this into account when designing immigration policies, and co-ordination among European countries in this area also needs to be stepped up. I believe that cross-country labour mobility brings sizeable benefits for global economic prosperity. But high immigration also poses many challenges, not least the social assimilation of the new foreign residents. Here we need effective policies to hold the rate of immigration at the right level. There is little doubt that immigration cannot carry on increasing indefinitely at high rates. And we must not forget that the favourable effects on inflation may gradually fall off as inward flows of foreign workers diminish. As immigrants are more willing to substitute consumption for leisure, we might expect their participation rates and the number of hours they wish to work to be higher than those of the native population.

Miguel Fernández Ordóñez: Immigration and the inflation moderation debate Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Symposium “The Phillips curve and the natural rate hypothesis”, Kiel Institute for the World Economy, Kiel, 3 June 2007. *  *  *  Introduction It is a pleasure to be here today at this Symposium in such distinguished company. The organisers have put together an impressive programme on a key topic for policymakers and central bankers in particular. As you know, the relationship between inflation and economic activity has always been at the heart of the macroeconomics discipline. And theoretical developments in this field have had a significant and direct influence on actual monetary policymaking. We are currently in a unique situation. For an unusually long period, in the context of high global growth, inflation has remained low and stable. Many commentators – and not only central bankers – would agree that better-managed monetary policy has had a lot to do with this favourable inflation performance. And there is a lively debate about which specific aspects of monetary policymaking have been responsible for it. Let’s look at three questions this debate has raised. First, do central bankers now have better knowledge of the economy and of monetary policy transmission and, consequently, are adopting more effective decisions? Second, have monetary policy regimes shifted towards making price stability a more prominent target?
The final part will be a discussion about the challenges ahead. Ladies and Gentlemen, Since my previous FCCT address, things have changed dramatically. Two years ago, the main policy issue surrounding the economy was the sharp acceleration in inflation due to drastic increases in oil prices. Two months after my talk, starting with the fall of Lehman Brothers, the world went into the deepest recession never seen since the Great Depression. Thailand was not spared, as the Thai economy last year experienced negative growth for the first time since the 1997 crisis. In tandem with the slowdown of the global economy, oil prices collapsed and inflation was no longer an issue. Over the past two years, policy focus would be on how to restore the stability of the global and individual country’s financial systems and how to prevent such a systemic crisis from happening in the future. In other words, the spotlight has turned from price stability to financial system stability, or in short, financial stability. 1 The global financial crisis has a significant impact on central banks’ thinking of economic and financial stability policies in three major areas. First, it is now widely accepted that monetary policy also needs to take care of financial stability concerns. The pursuit of price stability alone is not enough to ensure a smooth progress of the economy.

More recently in 2006, seeing that banks were strong enough, we asked them to further set aside sizable provisions for loan losses in compliance with a new international accounting standard. This had an adverse impact on banks’ bottom line at the time, but the extra provisioning would later provide cushions for Thai banks during last year’s economic downturn. Regarding all these instances, it should be noted that in choosing the specific macroprudential measure to be used, the Bank of Thailand has exercised great caution in  BIS Review 96/2010  3  terms of market friendliness, for a fine line exists between the balance of financial efficiency and financial stability. Here, I would like to note that having both monetary policy and regulatory responsibilities together allows us to see the big picture when making policies, whether monetary or macroprudential ones. This synergy has also enabled us to act quickly and decisively with an informed judgment, which served us well during the global financial crisis. In Thailand, talk of removing regulatory duties from the Bank of Thailand surfaced from time to time after the 1997 crisis, and I think we were fortunate that the government did not go through that path. In addition, with regard to the purview of our regulation, the new Financial Institutions Business Act (Section 5) allows room for the Bank of Thailand to regulate any unregulated financial businesses that may have significant impacts on the economic and financial systems.
The fixed exchange rate regime, which was introduced in 1986, reinstated monetary policy as an instrument of economic policy in Norway and laid the foundation for more stable economic developments later on. Inflation slowed gradually from the end of the 1980s and has been around 2½ per cent on average since then. The prolonged period of low and stable inflation has probably contributed to anchoring inflation expectations. 2  BIS Review 53/2003  When the Government introduced flexible inflation targeting, it set a target for core inflation of 2½ per cent over time.1 Core inflation has slowed over the past 12 months and is now considerably below target. Stabilising developments in output and employment According to the mandate, one of the aims of monetary policy is to stabilise developments in output and employment. The economy grows over time. Output moves in waves. Actual output will be alternately above and below the long- term trend. The difference between trend output and actual output is called the output gap. Stabilising output means aiming to keep actual output close to trend level. We have had pronounced economic cycles in the Norwegian economy. The downturn at the beginning of the 1990s was followed by an upturn from 1993. This upturn peaked in 1998. The economy then shifted from an upturn with high growth rates to an expansion with lower growth but low unemployment, labour shortages in many sectors and strong growth in labour costs.

For example, one of the banks under our direct supervision published its own climate strategy – which aims at achieving net zero emissions for its lending portfolio by 2050 or sooner – in tandem with a number of (interim) targets and related metrics, as well as the progress made in meeting them. For each of these targets and metrics, the bank discloses the sectors covered, the underlying methodology and the scenarios used to draw up benchmarks. For the methodologies and scenarios, it reports on the options it chose, the data sources it used and the changes it made with respect to the previous disclosure. Another bank endeavoured to align its portfolios with science-based transition pathways, including technology pathways originating from the International Energy Agency’s “Net Zero by 2050” report. The bank disclosed dashboards that displayed the performance of its loan books in various transition sectors, such as power generation, oil and gas, automotive, steel, cement and real estate, against a science-based transition pathway. It also disclosed the precise indicators used, the underlying methodologies and the reference scenarios for each indicator. For each of 3/4  BIS central bankers' speeches  the indicators, the bank then disclosed its current and projected performance against the pathway and set associated targets. Importantly, many of the banks raising the bar in C&E disclosures are small and medium-sized – showing that remarkable progress is achievable by all.
The spread is currently relatively high – on this measure housing is unusually “cheap” compared with government bonds – and, taken at face value, would point to somewhat faster growth of house prices over the future. But perhaps this is justifiable. If you thought relatively weak economic growth was likely to persist over the next few years – and that’s  11  All speeches are available online at www.bankofengland.co.uk/speeches  11  certainly the consensus view – you might reasonably expect the same for rental prices. Amidst higher uncertainty, prospective homebuyers might need an additional discount, relative to rents, to buy a house (the warranted “risk premium” on housing might be above average). Recent house price growth is already quite a bit lower than the rate crudely suggested by Chart 12. Near-term survey indicators – Chart 13 plots the RICS balance – offer little prospect of an acceleration any time soon, let alone the kind of pick-up you’d need to make much of a dent in the longer-term, 15-year average used in Chart 10. All this is why it seems to me improbable that aggregate mortgage debt will grow that rapidly over the next few years. People coming into the housing market, and trading up it, are unlikely to have to pay (or therefore borrow) much more than their predecessors did, several years earlier.

Ardian Fullani: Lending to the economy and the long-term stability of the banking system Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at a forum on “Lending to the economy and the long-term stability of the banking system”, Tirana, 4 March 2013. *  *  *  Dear Guests, Welcoming you to this forum, allow me to say a few words about its importance. The Bank of Albania considers that an open and ongoing communication with the banking industry and business community is a pre-condition to ensuring greater macroeconomic and financial stability of the country. These meetings serve as platforms to present incentives and strategic decisions, with direct impact on the economic and financial activity of both sectors represented in this meeting. Therefore, this is an open forum where the Bank of Albania’s analysis, conclusions and decision making will be confronted by the analyses and conclusions drawn by both other groups. I believe this meeting will lead us to a good understanding and assignment of responsibilities to provide Albania’s economic activity with a new stimulus by reviving lending to economy. Hence, allow me to share with you the main topic of today’s forum: lending to the economy and the banking system’s long-term stability. Besides professional discussions on the topic, this meeting is also aimed at launching the Bank of Albania’s new initiative, which I would call the Bank of Albania’s package to revive lending. Let me elaborate this topic further, dividing my speech into three main sections: 1.
- N21 MPR  3.5 2023 2024 Unemp. - Scenario  Sources: ONS and Bank calculations. In the literature estimates of the policy lag seem to vary quite a bit. In Cloyne and Hurtgen (2016, ‘The macroeconomic effects of monetary policy: a new measure for the United Kingdom’, American Economic Journal: Macroeconomics), the authors find that the peak effect of changes in UK monetary policy takes well over two years to come through. Cesa-Bianchi, Thwaites and Vicondoa (2020, ‘Monetary policy transmission in the United Kingdom: a high frequency identification approach’, European Economic Review) provide evidence of material effects after barely a year. 2  4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  In other words, there would’ve been no way to control inflation in prices but, at the same time, leave nominal wages and nominal household incomes untouched. It’s sometimes been suggested that, had monetary policy acted to suppress it, consumers might have been protected from this rise in the cost of living. Unfortunately, that’s not true. At a fundamental level this is because monetary policy cannot, over the long run, offset real economic shocks. If structural productivity grows more slowly, for example – as it did after the financial crisis – then, ultimately, real wages will do so as well, no matter what happens to monetary policy.

Traditional housing loan finance – a good alternative The Swedish mortgage institutions have traditionally been financed with collateral in their entire balance sheet. There is thus no direct link between a particular loan and the collateral belonging to it on the one hand and certain issued bond loans on the other. In many countries, mortgage companies are obliged to collect a number of housing loans and then issue bond loans in the market with these as collateral. There are different techniques for this to which I will return later. The Swedish model thus has advantages to the extent that borrowing can take place without a fixed link to lending. In this way, large loans can be placed in the market, which will make it easier to maintain regular trade and good liquidity in the loans. This has occurred with the so-called benchmark bonds. However, housing loan institutions, among other things due to considerable loan volumes and a good price formation for domestic loans have also been able to successfully compete in the international bond market. BIS Review 113/1999  2  If one is to borrow on the balance sheet, it must naturally be in such a state as to be accepted by the lenders. The Swedish institutions have managed this by strict operating rules, which place limits on what the institutions may engage in and allow lenders to ensure that the institutions get involved in what they have said they are going to do and nothing else.
For example I have personally heard from small firms who say they do not want to “get in hock to their banks again” and so they are turning to alternative funding sources or simply not investing at all. 11  Technically this is a collateral swap, and in line with good accounting practice it is not recorded on balance sheet. But there is full quarterly disclosure, bank-by-bank. 8  BIS central bankers’ speeches  And from the lender’s point of view, they still have to judge the chances of getting their money back. Again this is more complicated for lending to businesses than for households – especially small businesses which are much more diverse. At the margin there will be some individual business credits which look a better bet at a lower interest rate, but some other businesses won’t get credit at any price. In aggregate, corporate lending is also probably being held back by the fact that the commercial property market is still weak. Nearly 50% of bank and building society lending to corporates is to the property sector and a good part of the rest will be secured on property. Given losses suffered by most banks on their commercial property portfolios, they are reluctant to increase lending for that purpose. Finally, some banks have had to cut back particular forms of lending as a result of State Aid rulings, so they will struggle not to reduce their total lending, even if they use the FLS to the full to support their core activities.

But that would have meant deliberately trying to weaken output growth and seeking to raise unemployment so that domestic inflationary pressures were lower. The relative price changes would still have happened, albeit at a lower overall inflation rate (wage growth would also have been lower). That would not have been consistent with the Remit that the MPC has been given and I doubt it would have been a more attractive outcome to most people. The current policy debate Despite the medium-term limitations of monetary policy, my own view is that QE has nevertheless been a powerful force in supporting the economy at crucial points over the past 4 ½ years. Given the shocks that have hit the UK since 2008, and the dependence of the UK on financial services, output could have fallen much, much further than the 6% fall from peak to trough that is actually recorded, and the unemployment rate could easily have peaked well into double figures instead of the 8 ½% that actually transpired. But I have also made clear that I do not think monetary policy can itself guarantee sustained real growth in the mediumterm. It can provide a temporary stimulus and the right monetary conditions for a recovery, but sustained real growth will depend on real factors such as real external demand for UKproduced goods and services. We need real productivity growth to make UK production competitive and we need real supply-side reforms to boost expected future real incomes.
Much high quality work has already been done on this subject by local experts. However, they thought it might be helpful for the New York Fed, as an independent third party, to evaluate what might be done to promote competitiveness and productivity on the Island. I readily agreed that we would do so. I commissioned a team of economists from our Research group and other experts from our international and outreach teams, to analyze the challenges facing Puerto Rico. I asked them to put forward some recommendations on how to capitalize on the Island’s strengths and restore growth. The report released today on the competitiveness of Puerto Rico’s economy, is the product of their work and extensive consultation with local, national and international experts. I have  BIS central bankers’ speeches  1  read it closely and commend it to your attention. The report is intended as nonpartisan technical analysis and should be viewed in that vein. Even those who do not agree with every aspect of the analysis, I hope, will acknowledge that this is a serious, good-faith effort to examine, in detail, a number of important issues that deserve attention. Of course, many of these issues can only be considered as part of the political process. It is for the people of Puerto Rico to judge the appropriate trade-offs involved – not me, certainly, or my staff at the New York Fed. In a few moments Jamie McAndrews, executive vice president and director of research, will summarize the report and its recommendations.

The credit easing package and expanded APP has been effective too in reducing wholesale funding costs for banks, allowing banks to pass on better funding conditions to their customers. Since summer last year the average cost of borrowing for euro area non-financial corporations has fallen by around 70 bps, and by 90 bps and 110 bps for NFCs in Spain and Italy, respectively. The latest evidence from the July Bank Lending Survey confirms the improvement in credit conditions. During the second quarter of 2015 credit standards continued to ease for firms, and even more so for households. Reflecting the endogenous relationship between credit supply and demand, credit demand also increased among both groups driven mostly by the low level of interest rates. The impact of the expanded APP on bank funding costs has been partially reversed by the recent market repricing. Here, however, the credit easing package and our broader asset purchases could act as complements, in particular the Targeted Long-Term Refinancing Operations. For the APP, the ECB defines the volume of liquidity it would like to inject, but cannot determine the price; for TLTROs, we define the price of the liquidity, but banks determine the volume. One tool can therefore act as an automatic stabiliser for the other. Indeed, as wholesale funding costs for banks have risen, so has the attractiveness of the TLTRO. This substitution effect accounts in particular for the higher participation in the fourth operation by banks in less vulnerable countries.
The authorities thus received constant feedback on key indicators affecting national economic performance and could react accordingly. These indicators were sensitive, multiple and very reactive. In contrast to the pre-euro period, a loss of competitiveness will not show up quickly on radar screens like foreign exchange markets, interest-rate markets or the external accounts. As a result, economic managers must monitor the relevant competitiveness indicators with even greater vigilance. The sanctions for economic policy errors could come more slowly and insidiously via rising unemployment and weak growth. The rules of a market economy, especially competition, continue to apply to each economy. Jobs are created by consumers when they choose the goods and services they feel are the best value for money. Businessmen allocate these jobs to various possible locations in various countries according to the relative competitiveness of these locations. It is therefore necessary to monitor competitiveness even more closely than before through indicators such as unit production costs and the tax and regulatory framework. The close multilateral surveillance and the frank discussions provided in the context, inter alia, of the Eurogroup, will help monitor competitiveness trends with a view to ensure early warnings and appropriate reactions. *  *  *  Let me address, in conclusion, two questions: the issue of sustainable growth and the present diagnosis of the Eurosystem as regards the balance of risks. –  Growth: Central bankers are sometimes portrayed as being excessively cautious and reserved with respect to economic growth.

Once a month, immediately after the meeting of the Governing Council, the President of the ECB holds a press conference- which starts with a precise exposition of the diagnosis of the Governing Council which is immediately made available in real time on the ECB website. This will be the case when we will meet next Wednesday in Frankfurt. It is extremely important to stress that the Eurosystem was the first in the world to introduce, on the 1st January 1999, the concept of regular, frequent, real-time transparency in the domain of monetary policy. This illustrates the extent to which some criticisms are profoundly unjust! It is especially noteworthy, in this regard, that soon after we had embarked upon this new concept of real-time transparency, other important central banks decided to go along the same path. Being accountable for an independent institution in a modern democracy or, as it is the case for the Eurosystem, in a subtle set of democracies like the European Union, means being accountable to public opinion at large. In this respect, the public speeches and testimonies of the President of the ECB for the benefit of both European institutions and public opinion, the public speeches and testimonies of the Governors of the National Central Banks to national institutions and public opinion, are crucial. Explaining tirelessly the reasons and the reasoning that underpin the decisions of the Governing Council is a key part of our  2  BIS Review 28/2001  collective duty.