samchain/econo-pairs-v1 huggingface dataset:
The most likely situation is therefore that although the high level of indebtedness, the large deficit in savings in both the household and corporate sectors, combined with over-investment in certain sectors, will subdue growth for a time, there will be no dramatic or prolonged economic recession. However, in order to increase saving in the economy and thus correct the constant deficit on the current account, it is necessary that growth is not primarily driven by increases in consumption. Net export and investment should instead be the motors behind growth to a larger extent than before. Bringing about this state of affairs requires a weaker dollar exchange rate. One can therefore look with scepticism on the idea that tax cuts will bring the American economy out of its decline. How will Sweden be affected? The American economy affects developments in the rest of the world through many different channels, with exports to the USA as the most direct channel and the one where the effects are easiest measured. However, exports to the USA are only responsible for a couple of per cent of GDP in Sweden and have a similar significance for the euro area. Spread effects via the expectations that largely govern consumption, investments and the stock market are probably much greater, although more difficult to measure. Nevertheless, there are numerous indications that the Swedish economy is more sensitive to developments in the USA than the economies in the euro area.

Distinguished ladies and gentlemen, another major finding from the survey is that the stock of private sector foreign assets rose by 16 percent to $ billion in 2020 mainly due to the increase in currency and deposits by the mining and deposit-taking corporations. The surge in the holdings of currency and deposits contributed significantly to the increase in foreign asset flows by 60 percent to $ million. However, FDI asset acquisitions slumped to $ million in 2020 from $ million in 2019 owing to the reduction in the mining sector’s debt flows to fellow enterprises. The United Kingdom was the major recipient of foreign asset flows and most of the private sector assets are domiciled there. Ladies and gentlemen, with regard to investor perceptions, political stability, ease of doing business, availability of resources, and market potential continued to feature as the main factors that influenced re-investment in Zambia. Despite the unprecedented effects of the covid-19 pandemic in constraining the business investment, the promotion of the use of digital financial services and the reduction in the monetary policy rate were seen as positive measures that supported business activity. However, the temporary closure of some commercial bank branches and the revision of banking operating hours due to the Covid-19 pandemic were perceived as having had a negative impact on investment. Esteemed invited guests, as I conclude, let me share with you some key measures recommended by the majority of the respondents to enhance investment.
Effective communication will enable all economic agents to better understand the reasons and the goal, and thus encourage their proper behavior for achieving the goals. Unclear or poor communication, in turn, may jeopardize the achievement of the underlying goals, since central banks do not directly influence the goals, but should influence the behavior of economic agents to achieve the goal. For example, the central bank cannot directly influence inflation, but through its measures – reducing the interest rate, or increasing liquidity in the economy – can stimulate banks to improve the financing terms, but also borrowers to increase demand, which will move the demand for goods and services in the desired direction and achieve the inflation target. Empirical research in the central banking community does confirm that, globally, the central bank communication is key to maintaining a low level or reducing inflation and in many cases even reducing instability in the real economy. Communication is an ongoing challenge for central banks. It is undisputed that effective central bank communication will always be marked by certain flexibility and adaptability, depending not only on the economic environment, but also on the public interest and trends in the communication and information networks and media, which, due to the development of technology and digitization, are changing, advancing and improving on a daily basis. The constant strengthening of transparency, that is, the promotion and development of communication with the public, including media, is a challenge for the National Bank of the Republic of Macedonia.

Namely, high inflation in the 1970s, feed by the inflationary bias of the discretionary fiscal policy, drew a clear distinction between monetary and fiscal policy objectives and instruments by granting a high level of central bank independence, on the one hand, and setting fiscal rules, on the other. The aim was to eliminate any monetary financing of governments and their excessive borrowing, which, as witnessed in the past, could lead to high price volatility. Alongside the concept of enhanced independence, greater central bank responsibility was required, which is also achieved with greater transparency. This required introduction of different communication and information on the policy conduct, and on central bank data and positions, assessments and expectations for the economic variables. At the end of the last century, the central bank community realized that besides performing its function effectively, it can also fully achieve its independence, only if it applies higher level of transparency and developed communication within its mandate. Yet another factor that emphasizes the need for greater central bank transparency is the financial market liberalization in the 1990s. The perception and theory that the monetary policy is more effective if the central bank systematically surprises the markets has long been left to oblivion, as it became clear that bringing policies through surprises and isolated steps cannot have a lasting effect on the economy.
After all, we have seen our hopes for a more rapid improvement in the economy dashed several times in this recovery. For instance, early last year most forecasters thought that the recovery was gaining traction and that economic activity would increase at a solid – though not spectacular – pace through 2012. Then, as now, the labor market was beginning to show some long-awaited improvement, and households and businesses seemed to be making good progress in repairing their balance sheets following the huge losses in wealth sustained during the recession. Analysts thought that higher prices for energy and other commodities would weigh on output growth, as would the supply-chain disruptions from the disaster in Japan. But these factors were expected to be transitory, and most forecasters thought growth would improve significantly once these influences had passed. Unfortunately, this forecast proved to be too optimistic. Revised data indicate that annualized real GDP growth was only 1 percent in the first half of 2011 and improved only modestly to 2 percent in the third quarter. Consumer spending was particularly sluggish, weighed down by slow growth in employment, income, and household wealth, as well as some continued limits in access to credit. Furthermore, the weakness in GDP growth began before the bulk of the effects of higher energy prices hit the economy and before the disaster in Japan happened. This timing, along with the continued softness of most economic indicators into the early summer, indicates that the slowing in output growth was not all due to temporary factors.

BIS Review 64/2002  1  Beyond the very short term, we consider that both the euro exchange rate, which has strengthened since early this year, and the overall economic environment are still contributing towards reducing inflationary pressure. Moreover, there should also be a further unwinding of the indirect effects of previous increases in oil prices and other factors that have added to the stickiness of the annual rate of HICP inflation excluding unprocessed food and energy prices. However, for inflation rates to fall below 2% in the course of 2003 and to remain in line with price stability thereafter, as indicated by recent forecasts, it is crucial that oil prices do not increase sharply again and that the upward trend in labour cost indicators observed in recent years does not continue. With regard to the latter, there seems to be notable inertia, despite the subdued economic expansion; therefore, vigilance is warranted. Regarding fiscal policies in the euro area, may I expressly refer you to the Governing Council's statement of Thursday, 24 October on the Stability and Growth Pact. There is a strong consensus within the Governing Council that the principle of budgetary discipline enshrined in the Treaty and the Stability and Growth Pact are indispensable for Economic and Monetary Union and that the Stability and Growth Pact has been successful in promoting sound public finances and fiscal convergence, as well as in supporting the return to price stability. Moreover, the Pact is in the interest of the Member States.
First, was the low interest rate reasonable given the information available at the time? Second, could a different monetary policy with higher interest rates have prevented the crisis? The first question, whether the low interest rate was reasonable given the available information, is the relevant one when evaluating monetary policy. It is more relevant to evaluate policy taking into account the information available ex ante to the policymaker rather than information ex post that was unknown to the policymaker at the time (see Svensson, 2009a, on evaluating monetary policy ex ante and ex post). 7 During the period in question, given the information available, there was a genuine and well-motivated fear of the U.S. falling into a Japanese-style deflationary liquidity trap, and the optimal policy in such a situation is a very expansionary monetary policy. 8 It may be that, in retrospect, the risk of deflation was exaggerated, but there was no way to know this ex ante. Hence, I consider the expansionary policy very appropriate. Adding some ex post evaluation, one can note that it did not lead ex post to very high inflation or an overheated economy. 9 The second question, whether a different monetary policy could have prevented the crisis, is relevant when assessing to what extent monetary policy can be blamed for causing the crisis, notwithstanding if it was reasonable from an ex ante perspective. The credit growth and the housing boom in the U.S. and elsewhere were very powerful.

Generally, to the extent financial instability depends on specific distortions, good regulation should aim to attack these distortions as close to the source as possible. To counter the observed procyclicality of existing regulation, macro-prudential regulation that is contingent on the business cycle and financial indicators may need to be introduced to induce better financial stability. Possible macro-prudential regulation includes variable capital, margin, and equity/loan requirements. As expressed by Bean (2009), “the best approach is likely to involve a portfolio of instruments”. 14 More generally, what is the relation between financial stability and monetary policy? Financial stability is an important objective of economic policy. A possible definition of financial stability is a situation when the financial system can fulfil its main functions (of submitting payments, channelling saving into investment and providing risk sharing) without disturbances that have  12  Kohn (2008), after extensive discussion, concludes that there is insufficient evidence that low interest rates would have contributed much to the house-price boom and that higher interest rates would have had much dampening effect on it. 13  The relationship for the Euro area countries is less weak, but for reasons explained by Bernanke (2010) it is potentially overstated. 14  Nyberg (2010) provides more discussion of macroprudential regulation and regulation reform. 4  BIS Review 16/2010  significant social costs. I find it helpful to conceptually distinguish financial-stability policy from monetary policy.
4/9  BIS central bankers' speeches  The hub of the payment system in Norway is Norges Bank’s settlement system, and it is our responsibility to make sure the system is efficient and reliable. Turnover is substantial, and transactions totalling close to NOK 240 billion were settled by Norges Bank in 2016 – every day. As a society, we are completely dependent on the smooth functioning of the payment system. Without a stable settlement system, it would not be possible to use customer deposits in bank accounts as a means of payment, and substantial resources are allocated, both by banks and by Norges Bank, to make the system as robust and efficient as possible. Technological innovation continues to bring us new methods of payment. Using smartphone apps such as Vipps and MobilePay, we can now make payments using our mobile phones. Technology giants such as Apple, Samsung and Google are also entering the payment market. Suppliers of goods and services are making their own apps and linking them to bonus and loyalty programmes. Although this may be a positive trend for many people, it comes at a price. It is difficult for us as consumers to keep track of the information we disclose and how it is used. This poses a challenge to data privacy and the security of the payment system. The apps are only a customer interface. Behind them lie international card schemes such as Visa and Mastercard.

Fortunately, inflation expectations remain relatively stable at levels somewhat above the current inflation rate. This stability should help prevent an undesirable further drop in inflation relative to our 2 percent objective. That said, there are some nascent signs that the economy may be doing better. For example, based on the first estimate, which is subject to revision, real (gross domestic product) GDP increased at a 2.8 percent annual rate in the third quarter of 2013, above the trend of the past four years. And the most recent payroll employment report showed a pickup in the monthly pace of job gains. The 3-month moving average rose back above a 200,000 pace after slowing to about 150,000 as of July of this year. I hope that this marks a turning point for the economy. But before we rush to this conclusion a few more cautionary comments are appropriate. With respect to GDP growth, it turns out that inventory investment contributed ¾ of a percentage point to that overall growth rate. Thus, because this impetus from inventories will likely reverse this quarter, the real GDP growth rate is likely to slow to around a 2 percent annual rate or a bit less in the fourth quarter. With respect to payroll employment, we have seen such bursts in payroll growth before over the past few years and have been disappointed when the pickups proved temporary and did not lead to a rise in the overall growth rate. But, I have to admit that I am getting more hopeful.
It should not be forgotten that extensive capital regulations entail a mispricing of risks. Deregulation then leads to desirable price adjustments. But it is during these transitional corrections that financial problems are liable to occur. Changes have often outstripped the ability of the system, including the institutional infrastructure, to keep pace. In most cases, neither the banks nor the public authorities had the necessary prerequisites for adapting to the new conditions that a freer capital market created. The expansion of lending had too free a rein in many countries and the authorities did not adequately monitor what was happening at either micro or macro level. 1  BIS Review 65/2000  Due to a rapid expansion of credit, the deregulation and opening up of the domestic financial system was often followed by economic overheating. Asset prices rose sharply and imbalances developed. Furthermore, in countries with a fixed exchange rate system, extensive short-term borrowing abroad was stimulated. A large proportion of these funds was often channelled through the domestic banking system and rendered this rather vulnerable. When capital flows subsequently reversed, the adjustment was often dramatic. Production fell, unemployment rose and both the currency and the banking system faced an acute crisis. Although several factors may have played some part in the run-up to recent financial crises, it is important to bear in mind that a deregulated financial system with free capital movements is not the basic problem.

Regulatory gaps were another important factor in causing the crisis. American International Group, Inc. (AIG) is a case in point. AIG Financial Products, a subsidiary of the AIG parent company, provided guarantees against default on complex collateralized debt obligations, leveraging the AAA rating of the AIG parent company in the process. This activity was conducted with inadequate regulatory oversight, poor risk management and insufficient capital. Finally, many of the incentives built into the system ultimately undermined its stability. The problems with incentives were evident in a number of areas, including faulty compensation  BIS Review 14/2010  1  schemes and risk management that was too narrowly focused on one business area without regard for the broader entity. These incentives created important externalities in which participants did not bear the full costs of their actions. Turning to where we are now, the U.S. financial system is in much better shape today than it was a year ago. The capital markets are generally open for business – with the important exception of some securitization markets – and the major securities dealers that survived the crisis have seen a sharp recovery in profitability. The largest U.S. bank holding companies, which went through the Supervisory Capital Assessment Program exercise, have more and better quality capital, having raised more than $ billion of common equity over the past year in the capital markets and generated nearly as much common equity via preferred stock conversions and from gains on asset sales. However, many smaller and medium-sized banks remain under significant pressure.
In 2014, the FPC introduced limits on the flow of mortgages with a high loan to income (LTI) in order to guard against the buildup of highly indebted households. 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  But the current low real interest rate environment at the medium and longer terms that are of interest to households and businesses are not, to my mind, primarily the product of central bank policy. Persistent longer term trends have been pushing down with increasing force on real long term interest rates for two to three decades now. 24  Low productivity assumptions are an important more recent part of this story  alongside demographic and income distribution trends. Chart 9: Yields on UK government bonds Per cent 2.5 2 1.5  Nominal  1  0.5 0 2018  2022  2026  2030  2034  2038  2042  -0.5 -1 -1.5  Real  -2 -2.5  -3  That pressure has been amplified in recent years by headwinds from the crisis. It may also have been amplified by the very structural uncertainties about the macro-economic ‘model’ in advanced economies and fears about secular stagnation that have been much of my subject today. I expect that if the slow healing continues, and some of the more extreme concerns about secular stagnation of our economies fade, we will see larger term premia and some increase in medium and long term returns.

In particular, the ECB expanded scope for central bank intermediation of transactions between banks, thereby offering an alternative to the malfunctioning private inter-bank money market. At the same time, the measures supported financial stability objectives by containing and mitigating the systemic consequences of liquidity tensions in the money market. To conclude, let me say a few words on the recent decisions of the Governing Council taken on 9 May and announced on 10 May. As I already said publicly, I will sum up in five points the Governing Council’s position. 1. The ECB is fiercely independent and takes all its decisions independently of governments, social partners and pressure groups of any nature. BIS Review 70/2010  3  2. We are inflexibly attached to price stability, our primary mandate. Our successful track record since the inception of the euro is remarkable. 3. Our present monetary policy stance is appropriate. Our decisions taken on 9 May have confirmed it. We are not engaging in any form of “quantitative easing”. 4. The “Securities Markets Programme” is designed to ensure an effective functioning of the monetary policy transmission mechanism by helping to resolve a malfunctioning of some segments of the euro area debt securities markets. 5. The liquidity provided through this programme is withdrawn in its entirety through tenders of term deposits.
These and other propagation channels in turn, led to virtual stoppage of lending and borrowing activity in the money markets and, ultimately, a credit crunch that reverberated throughout the global financial system. For example, the crisis led to a sharp constraint on the availability of trade credit in the fall of 2008 that had a devastating impact on economic activity in emerging markets in Asia and Latin America, as well as Japan. This region felt the full economic consequences of the crisis even though banks in the region were generally healthy and far from the U.S. housing boom and bust and the subprime mortgage debacle that could be viewed as the initial spark that ignited the crisis. The crisis also underscored another area for further cross-border work: Our international approach to liquidity provision and lender-of-last-resort services to globally active institutions. Cooperation among liquidity providers, for example, through some central bank dollar swap arrangements, played an important role in stabilizing global money markets. However, the division of lender-of-last-resort responsibilities between home and host countries remained ambiguous through the crisis. This needs further attention. So what steps have been taken to address some of these sources of vulnerability? There are literally dozens of initiatives underway nationally and globally, not only in traditional bodies for such cooperation such as the Basel Committee on Bank Supervision, but also among newer international groups such as the Financial Stability Board.

There is a strong sense at Norges Bank that we are being put to effective use today. Thank you for your attention. BIS Review 154/2010  17