samchain/econo-pairs-v1 huggingface dataset:
More specifically, when a respondent assigns a positive probability to three or more bins, we assume an underlying generalized beta distribution; and for fewer than three bins, we assume a triangular distribution. An example of such a fit is shown on Slide 3. 2  BIS central bankers’ speeches  Our findings over the past five years, based on different samples and different survey platforms, indicate that individuals are as willing and able to respond to well-written probabilistic questions as they are to traditional attitudinal questions on the same subject. Moreover, they do so sensibly, with responses to probabilistic questions having internal consistency and measurement reliability. The uncertainty expressed in consumers’ density forecasts is reliably related to other measures of uncertainty. For example, individuals who express higher levels of uncertainty in their subjective probability distribution are more likely to report a range when they are originally asked for their point forecast, and the width of this self-reported range is positively correlated with measured uncertainty. In the case of inflation, we find that uncertainty about future inflation is negatively related to self-assessed responsibility for investment decisions, planning horizons for financial decisions, and the respondent’s performance on a financial literacy measure. In addition to providing a measure of uncertainty, an important advantage of density forecasts over point forecasts is that they remove ambiguity about which (if any) measure of central tendency an individual’s point forecast corresponds to.

Speech  23 September 2021, 5.30 pm  Fifth Karl Brunner Distinguished Lecture Introduction of Carmen M. Reinhart  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank Zurich, 23 September 2021 © Swiss National Bank, Zurich, 2021  Page 1/4  Ladies and Gentlemen  Good evening. My name is Thomas Jordan and I am the Chairman of the Governing Board of the Swiss National Bank. We are very pleased to welcome you all to the fifth edition of the Karl Brunner Distinguished Lecture. We are delighted and honoured that Carmen Reinhart has accepted our invitation to give the lecture. This lecture was planned for September 2020, but had to be postponed by one year due to the pandemic, with the hope of welcoming Carmen and all of you in person here in Zurich. Given the still difficult situation with coronavirus, this has unfortunately not proven possible. Consequently, the fifth Karl Brunner Distinguished Lecture now takes place in a virtual format. The Swiss National Bank established this lecture series in commemoration of the Swiss economist Karl Brunner, who was one of the leading monetary economists of the twentieth century. Our aim is to contribute to the public debate on questions related to our mandate, by inviting prominent academics whose research is relevant to central banking. Carmen Reinhart is one of the most cited economists in the world, with contributions that cover a remarkable variety of topics, including financial crises, exchange rate policies and public debt.
Mr. Chairman, while it may be reasonably easy to define what Monetary Policy and Fiscal Policy means, it would not be so easy to define as to under whose purview such policies would fall into, when it comes to implementation. Of course, it is clear that the bulk of the Monetary Policy would be the direct responsibility of the Central Bank, and the bulk of the Fiscal Policy would be the responsibility of the Ministry of Finance. However, there are several grey areas and overlaps, which blur the boundaries of these policy frameworks, and therefore, there are many instances of policy actions of one institution impacting and influencing upon the policy framework of the other, and vice versa. Relationship between the central bank and the ministry of finance With that in mind, let us now examine as to how the relationship between the Central Bank and the Ministry of Finance have been structured according to our Laws. Mr. Chairman, as I already stated, the basic law governing the operations of the Monetary Board and the Central Bank, is the Monetary Law Act No.58 of 1949. The Monetary Law Act, (popularly called the MLA), covers the powers and purposes of the Central Bank, Monetary Board, Governor and Deputy Governors, Departments of the Central Bank, Reports and Publications, Profits and Losses and the Accounts of the Bank etc. In addition, chapters are devoted to the powers and purposes of the Central Bank, National Monetary Policy, instruments of the Central Bank, and the Central Bank’s relationship with the Government.

In retrospect, I can also state that this important move enabled the economy to face the emerging challenging times confidently, with the new inflows assisting the Government to maintain the growth momentum, while also allowing the Central Bank to maintain stability. One of the important lessons that we would take away from this case study is that the initiative was implemented as a result of the close harmonization between the MoF and the Central Bank. Had any one of the two agencies not fully supported this bold and imaginative move, the initiative would have failed, or worse still, been still-born. BIS central bankers’ speeches  7  Case Study 2: Debut International Sovereign Bond The second case study that I would describe this evening is the debut international sovereign bond of Sri Lanka, in 2007. Mr. Chairman, as you may recollect, by the second half of 2007, the country was fully engaged in the major humanitarian operation, while the global environment was becoming more and more unstable. The local environment was also tense, notwithstanding all efforts. Inflation was high; interest rates were high; the exchange rate was under threat; and the fiscal deficit was expanding rapidly, because of the ever increasing need for finances to fund the massive infrastructure development programme and to meet the costs of the humanitarian operation. To deal with this challenging situation, the MoF and the CB decided that it was vital that a further sizeable injection of long term foreign funds was given to the economy.
Moreover, firms today appear to be adapting their costs to more strained financial conditions, which has resulted partly in less office space per employee. A bubble in the housing market? Developments in the housing market have been markedly different than those in the rest of the property market. Housing prices have risen by almost 60 per cent since 1992. During the same period the general price level has increased by around 20 per cent. The sharp rise in prices has continued despite the economic slowdown in recent years. This is a new experience that distinguishes the situation from previous business cycles. A significant driving force behind these price developments is the lower interest rate level. Lower interest rates mean that households and firms can finance more expensive properties, all other things being equal. The low-inflation economy that has been established in Sweden since the crisis at the beginning of the 1990s has therefore also brought with it higher debt ratios among households. Debt as a proportion of disposable income has risen on average from 90 per cent in the mid-1990s mitten to around 120 per cent at the end of last year.2 In spite of this, households’ interest ratio, i.e. the proportion of disposable income that is used to make interest payments, has fallen from 7 per cent to below 5 per cent. In comparison, the ratio during the crisis years was up to 11 per cent.

A mild economic downturn There are many indications now that the Swedish and international economies have embarked on a stable upswing. This means that the recent economic downturn has been mild in an historical perspective. In 2001 the Swedish economy grew by 0.9 per cent, and in 2002 by 2.1 per cent. Last year the recovery was derailed slightly and the economy grew by 1.6 per cent. During these three years production fell in only one quarter. For a downturn the rate of growth from 2001 to 2003 was high. This was also reflected in the labour market, where employment held up throughout the period 2001 to 2003. Macroeconomic changes The mild economic slowdown is likely a result of institutional changes that have helped increase the stability of the economy. Unlike the situation at the beginning of the 1990s the government finances are sound and monetary policy is transparent and predictable. This does not only apply to Sweden but  BIS Review 28/2004  1  also to large parts of the rest of the world. Stability has become a guiding principle in the economic policies of OECD countries, among others, and has entailed an increased focus on healthy government finances and stable prices.1 The process has been helped by the absence of external cost shocks during the 1990s and beginning of the current decade such as the oil crises during the 1970s and 1980s.
But there are other factors contributing to the recovery: the fall in oil prices, which is translating into a boost to household incomes and into a reduction in firms’ production costs; the very significant depreciation of the euro; and the favourable economic activity figures of some of our trading partners within the Monetary Union. Turning to prices, the annual rate of inflation has been negative in the first three months of 2015, running at –1.3%, –1.1% and –0.7%, respectively, although the non-energy CPI and the core inflation index have been more stable, posting positive figures. In particular, in March, on preliminary figures, the annual rate – though still negative – is estimated to have stood at –0.7%, an increase of 0.4 pp on February, which largely stemmed from the correction in oil prices. Following several quarters of sluggish growth, a recovery is discernible in the euro area. Most member countries are posting positive GDP growth rates, although there are significant differences. Among the major economies, the pace of economic activity is highest in Spain and Germany. In 2014, euro area GDP grew by 0.9%, compared with a decline of 0.4% in 2013. Driving this recovery has been the increase in private consumption, in a setting of improved household confidence and income. Other favourable factors have been the contribution of exports and gross fixed capital formation, the latter due to the pick-up in construction.

Luis M Linde: Economic recovery in Spain Opening remarks by Mr Luis M Linde, Governor of the Bank of Spain, at the XXII Meeting of the Financial Sector, organised by ABC, Deloitte and Sociedad de Tasación, Madrid, 8 April 2015. *  *  *  Let me first thank Bieito Rubido, the Editor of ABC, Yolanda Gómez, the Deputy Editor, Fernando Ruiz, the Chairman of Deloitte and Juan Fernández-Aceytuno, the General Manager of Sociedad de Tasación, for their invitation to the opening of this Encuentro del Sector Financiero forum. In my address I shall briefly set out the situation of and outlook for the Spanish economy in the European setting; I shall review monetary policy developments in the euro area; and I shall conclude with some thoughts on the connection between political tensions and the functioning of the Monetary Union which, today, as a legacy of the crisis dating back to 2007, are evident and significant. The Spanish economy I shall begin with the situation of the Spanish economy. Recent figures confirm the momentum and strength of our economic recovery, against a background in which the correction of the macroeconomic imbalances and the improvement in the external environment continue. The policies deployed at home and in Europe are underpinning this sound performance.
To manage those risks, authorities can do more to work with market intermediaries to enhance transparency and understanding around secondary market liquidity. Securities market regulators may have an important role to play in developing globallyconsistent best practices in liquidity risk management and valuations. Liquidity buffers and redemption schemes should be assessed. And greater standardisation of debt securities will also need to be supported. The need to ensure resilience in the non-bank financial sector also raises questions about the nature of central bank operations. The maintenance of an effective monetary transmission mechanism now requires backstops for both banks and markets. Bagehot will need to be updated for the 21st century, with central banks standing ready to operate frequently, against a wide range of collateral and a broader range of counterparties. In short, diversity will reap rewards, but resilient diversity will require a significant programme of reform and alertness to new risks. Trusted The second pillar of the future of reform is to rebuild trust in finance. Trust between institutions, counterparties and investors is central to maintaining the ability of finance to function. Trust between regulators across jurisdictions is needed to maintain an open global system. 18  8  Chart 12 shows the sudden and sharp reversals of flows into US high-yield bond funds and sets those flows in the context of funds’ liquidity buffers. BIS central bankers’ speeches  And most fundamentally, trust between the public and the financial system is needed to maintain the social licence for finance to operate.

The alternative is the inefficient imposition of multiple regulatory regimes on the same markets and institutions. In this regard, the way is being led in OTC derivatives regulation where progress has been made in establishing that regulators should defer to each other, based on an assessment of whether their regulatory regimes deliver similar outcomes. Urgency is needed in applying that principle if we are to alleviate reductions in market liquidity and FSB members should begin to consider whether and where more widespread adoption of flexible approaches to regulating could be exploited. The FSB is fully committed to supporting continued openness of the global system and to pursuing a new phase of global financial reform. To ready itself for its new roles, it has agreed changes to the structure of its representation, strengthened the inclusiveness of its working procedures and taken steps to increase the transparency of its operations.26 Currently emerging economies are on track, by the middle of the century, to account for the majority of G20 GDP and equity market capitalisation. It is essential that their increasingly important role in the global economy is reflected in the FSB and other international organisations. The changes we have made to increase the number of seats held by emerging markets will allow us to reflect that while maintaining effectiveness in decision making. 26  12  FSB (2014d) reports on the changes to the structure of FSB representation.
It is possible to mitigate transitorily its effects on the real economy, but longer-term actions need to be taken to support competitiveness. But, in a world scenario with greater importance of emerging market economies, their currencies will be stronger than in the past. A more balanced recovery of the world economy should alleviate tensions. Commodity prices have been rising in the last few months, owing to a large extent to the strong growth of emerging market economies. Although they represent supply shocks that change relative prices, and in addition the supply response should mitigate this rise in the longer term, the short-term challenges are significant. The role of monetary policy is to avert second round effects that could contaminate inflation dynamics. For this reason, and in the context of solid growth and closed output gaps, monetary policy should gradually tighten in emerging markets, something we have been doing in Chile. Today the overall challenge for policymakers is to allow for sustainable growth. The Central Bank will fulfill its purpose and will continue to use its policies with flexibility, as proven in the recent intervention announcement, so that projected inflation stands at 3% over the policy horizon. This is the best contribution the Central Bank makes to Chile’s welfare and growth potential. References Banco Central de Chile (2007), “La Política Monetaria del Banco Central de Chile en el Marco de Metas de Inflación,” Política del Banco Central de Chile. Central Bank of Chile (2010), Monetary Policy Report, December. Cowan, K. and J. De Gregorio (2007).

The imbalance within the economy which these figures reflect - notably the continuing imbalance between the internationally-exposed companies and sectors, which are having a really rough time, and the domestically-orientated sectors which are doing much better - is certainly not ideal. The continuing imbalance is not without risks. On the one side, we may find it increasingly difficult to offset the negative impact of the global slowdown in the face of increasing domestic private sector debt; and if the slowdown in the UK spreads beyond manufacturing to the services sectors it may cause unemployment to rise which in turn could slow the growth of consumer spending. But, on the other side, we may find it difficult to moderate the growth of domestic demand when the international environment improves. There is no doubt that if we could simply redraw the map, we would opt for stronger external demand and weaker consumption growth. That would represent a more sustainable balance within our economy. Sadly that is a choice that we are not immediately free to make. Doing what we can to encourage domestic demand growth to compensate for the global economic weakness is certainly preferable to an unnecessary slowdown in the economy as a whole. And that is the path we must for the time being continue to pursue. 2  BIS Review 85/2001  So what then are the prospects?
Another possibility is that low long-term rates reflect unusually strong demand for long-term securities, for example, by pension funds seeking to improve the match between the durations of their assets and liabilities, by holders of mortgage-backed securities seeking to maintain the durations of their portfolios, or by foreign central banks that have been acquiring dollars. China may have been playing an especially large role, as its central bank has intervened in foreign exchange markets to peg the renminbi at a low level against the dollar. Of course, last week the People’s Bank of China announced that it had revalued the renminbi against the dollar by 2.1 percent, with the stated intention of managing the renminbi’s exchange value against an unspecified currency basket. This is not a large revaluation, but some observers think that it is the beginning of a much bigger move over time. If this is the case, we may gain a better understanding of the impact, if any, that Chinese exchange rate policy has had on U.S. bond rates. An alternative to “special factors” as an explanation for the low level of long-term yields is the possibility that the flat yield curve reflects the market’s assessment that bad news is on the horizon. In other words, investors may expect only modest increases in the funds rate in the future because they think that the drags I’ve described will keep demand on the weak side for some time to come.

We probably won’t know the most important sources of this “conundrum” until more time passes, but the causes of the conundrum do matter to monetary policy. If the first class of explanations turns out to be correct, the federal funds rate probably needs to be somewhat higher than would otherwise be appropriate to offset the additional stimulus due to the flat yield curve. If the latter explanation fits the bill, and the market is correct that the drags going forward will be unusually strong, a somewhat easier policy may be appropriate. Housing Whatever the source of the conundrum, clearly low long-term rates have contributed to the continuing boom in the housing market. The share of residential investment in GDP is now at its highest level in decades. The question on everyone’s mind, of course, is whether this source of strength in the economy could reverse course and become instead a source of weakness. Put more bluntly: Is there a housing “bubble” that might collapse, and if so, what would that mean for the economy? To begin to answer this question, we need to know what we mean by the term “bubble.” A bubble does not just mean that prices are rising rapidly—it’s more complicated than that. Instead, a bubble means that the price of an asset—in this case, housing—is significantly higher than its fundamental value. One common way of thinking about housing’s fundamental value is to consider the ratio of housing prices to rents. The price-to-rent ratio is equivalent to the price-to-dividend ratio for stocks.
Does that not offer a recipe for success in so many areas of our lives?   We tell our children to play less and study more, so that they can acquire the education necessary to lead productive and comfortable lives in future.   We tell ourselves to eat less and exercise more, so that we can keep in good health for a longer time and continue to enjoy good food.   Should it be any different in matters financial? What does it mean to be patient and prudent in finance? Three things.   Budget carefully    Borrow responsibly    Invest wisely  These are the three areas that MoneySENSE – our national financial education programme – will focus on increasingly. MoneySENSE – spearheaded by MAS and involving a number of government agencies – has been working in partnership with the financial industry, education institutes, and professional and consumer associations to help empower Singaporeans to manage their finances well. BIS central bankers’ speeches  1  Budget carefully Let me start with budgeting – the first area of focus. The financial questions we face in our lives are quite similar to the dilemma the children had with their marshmallows. If anything, they are more complicated. For one, marshmallows or the good things in life are usually not free. We have to pay for them with money we receive from working or from our savings. Or from borrowing.

In other words, we should be trying to prevent banks getting into difficulties in the first place. This requires effective management by the banks themselves as well as careful monitoring by the banking supervisors. The first of these we have tried to address through our recent Guideline on the Corporate Governance of Locally Incorporated Authorised Institutions. This is intended to encourage high standards of management in such institutions and thus help them to deal with the challenges ahead. These challenges also require enhancements to our system of banking supervision. As recommended by KPMG/Barents, we are introducing a more risk-based approach. This aims to be more forwardlooking than the old style of supervision. It focuses more precisely on the various types of risk being run by individual banks, the quantity of such risks and the quality of the system used to manage them. If used properly, it should lead to a less intrusive and less burdensome supervisory approach towards well-managed institutions. We have been developing this approach over the last year and have applied it to a number of the local banks. We intend to roll it out to cover foreign banks next year. It is important that the whole process should be transparent and to assist in this we intend to issue a framework document quite shortly which will outline the new approach. We are also engaged in a major rewrite of our supervisory guidelines to make them more user-friendly and to put them into a common format.