samchain/econo-pairs-v1 huggingface dataset:
This lending incentive will reduce bank funding costs by several billions of € each year. The Italian banking sector – and through it, Italian businesses and  Page 4 sur 10 households – is the main beneficiary of ECB refinancing operations with almost 30% of total credit operations outstanding. This even leads some in other countries to argue that our monetary policy is being conducted for the benefit of Italy: they are wrong. Monetary policy is not conducted for any one country, be it Germany, France or Italy. The Governing Council takes its decisions collectively and independently, taking into consideration the euro area as a whole. That being said, let us simply acknowledge that belonging to the Monetary Union has provided Italy with substantial financial relief in this crisis. The ECB has worked well for Europe and for Italy. Our Governing Council took note last week of the judgement by the German Federal Constitutional Court. Let me be crystal-clear: we remain undeterred, as President Lagarde said; furthermore, we are definitely dedicated to and determined to deliver on our mandate as conferred by the Treaty. As the  Page 5 sur 10 European Court of Justice has said, our past actions are indeed proportionate to that mandate. More broadly, I hear debates in our two countries shedding doubt on (i) the independence of the central bank – that should be brought “under political control” – and on (ii) its mandate – which should go beyond price stability, to include employment or the fight against the health crisis.

Alessandro Manzoni, one of the greatest Milanesi, wrote in 1815 : « Liberi non sarem se non siam uni v [Liberi non saremo se non siamo uniti]». Today, we Europeans will not be masters of our own destinies if we are not united. Let us now overcome the current “malinconia” and face our challenges not with fear or distrust, but with pride. Pride in what we have already achieved and pride in the future we want to shape. Thank you for your attention. Televised address by Federal President Frank-Walter Steinmeier on the coronavirus pandemic at Schloss Bellevue, on 11 April 2020. ii « Education in the digital world », Speech by Ignazio Visco, Governor of the Bank of Italy, Centesimus Annus Pro Pontifice Foundation – Seventh Consultation Meeting “Ethos, Education and Training: Avenues toward equality and ethical behaviours in the digital era”, Catholic University of the Sacred Heart, Milan, 31st January 2020 iii Arnoud Boot, Elena Carletti, Hans‐Helmut Kotz, Jan Pieter Krahnen, Loriana Pelizzon, Marti Subrahmanyam, “Corona and Financial Stability 4.0: Implementing a European Pandemic Equity Fund” 25 April 2020, Vox, CEPR Policy Portal. iv European Fiscal Board (2019), “Assessment of EU fiscal rules with a focus on the six and two-pack legislation”, août, Bruxelles. https://ec.europa.eu/info/sites/info/files/2019-09-10-assessment-of-eu-fiscal-rules_en.pdf v Alessandro Manzoni, in Proclama di Rimini, 1815. i
At the same time, beyond recent episodes of volatility, financial conditions remain favorable in perspective, particularly for emerging economies. This, together with still low risk premiums, stock markets that have held on to positive returns, capital flows that are sustained, as well as the withdrawal of the monetary impulse by the Federal Reserve that has caused no major disruption in the markets. As shown in a box in the MP Report, volatility indicators have remained low during the period, contrasting with persistently high political and economic uncertainty indices. The gap between these indicators has caused some concern, as it could indicate that markets are not properly reading the risks associated with the present economic and political environment. However, the fact that the two indexes capture elements other than uncertainty, could justify this situation, so they must be taken as complements. China’s growth outlook remains stable, although incoming information has created doubts regarding its growth pace for the rest of the year and has increased preoccupation about the stability of its financial system, especially in a context of internal and external monetary normalization. It must be noted that in Latin America, several economies have seen activity weaken beyond expectations, but lower inflation has allowed to normalize monetary policies faster, which should help regain better numbers. Brazil, the main economy in the region, is still in difficulties. Although short-term indicators continue to show signs of recovery, solutions are expected to be slow.

In September 2018, Norges Bank raised the policy rate for the first time in over seven years. The rate was raised further in March of this year, and is now 1 percent. Gradual interest rate normalisation means that the Norwegian economy is faring well. The rate hikes were signalled well in advance. Norges Bank places substantial emphasis on clear and effective communication of policy rate prospects. Our main channel of communication is the Monetary Policy Report, which contains a thorough assessment of information about developments in the Norwegian economy and the background for the monetary policy decision. In order to reach a broader audience, we communicate through different channels. We give speeches and presentations throughout the country where we address local business leaders, the financial industry or university and college students. In 2018, we launched a new product on our website – Pengepolitikken kort fortalt [Monetary policy in brief].1 This product is aimed in particular at those looking for background on the interest rate decision in a more simplified and relatable version. The message, of course, is the same as in our Monetary Policy Report. Chart: GDP for Norway’s trading partners Let me return to economic developments. Norway’s trading partners have experienced a broad economic upturn in recent years. This has led to a considerable improvement in labour market conditions, and wage growth has gradually begun to rise. In 2018, growth among trading partners slowed somewhat, particularly in Europe. Heightened uncertainty had likely contributed to dampening growth.
To step back, the Federal Reserve’s set of unconventional monetary policies has consisted of three major components: •  Forward guidance with respect to the path of the federal funds rate target. •  Large-scale asset purchases of longer-term Treasury securities and agency mortgage-backed securities (MBS). 1  However, it is important to note that some of those interventions did indeed result in tighter limits on the central bank’s authority as a lender of last resort. For example, the Fed’s scope to provide liquidity to troubled firms in unusual and exigent circumstances – under Section 13(3) of the Federal Reserve Ac – was curtailed somewhat by the Dodd-Frank Act. This underscores the fact that central bank actions can have consequences with respect to independence. BIS central bankers’ speeches  1  •  A maturity extension program in which shorter-dated Treasuries were sold and the proceeds used to purchase longer-dated Treasuries. With respect to forward guidance, it is important to distinguish between two specific forms that this guidance may take. In the first form the central bank provides its forecast for the future path of the policy rate and, possibly, some sense of the degree of uncertainty around this path. In the second, the central bank pre-commits to a specific future path for its policy rate.

Providing a forecast for the policy rate by itself does not create any budget or reputational risk for the Federal Reserve, so I generally do not see the first form of forward guidance as posing much risk to central bank independence.2 The second form of forward guidance – pre-commitment to a policy rate path – could create more risk for the central bank. In particular, consider a scenario in which the central bank decided to increase monetary accommodation by committing to maintain a low short-term interest rate for a long time even if this commitment resulted in inflation overshooting the central bank’s objective in the future. I could see how this could create a potential threat to the central bank’s independence. That is because the commitment could force the central bank in the future to conduct monetary policy in a way that was inconsistent with the inflation portion of its mandate. Although this second form of forward guidance could create greater risk for the central bank with respect to its future independence, this is not a policy that has been adopted by the Federal Reserve. There are implementation challenges with this approach. In particular, it is difficult for a monetary policy committee today to institutionally bind future monetary policy committees to follow actions that could conflict with their objectives in the future. Without such a credible forward commitment, such policies would likely be ineffective in affecting expectations in the manner needed to provide additional monetary policy accommodation.
But eventually, the authorities learned that the costs were high. The public pays an inflation tax, the monetary system is impaired and economic growth slows. The economic progress experienced by Norway and other countries in the second half of the 1800s was founded on more than a thousand years of money and credit history. The authorities probably knew that a credible promise of a stable value of money measured in metal was one of the cornerstones of the success experienced by towns in northern Italy during the Renaissance and in 17th century Netherlands They knew that confidence in the promise of a stable value of money could be maintained by relinquishing seignorage and limiting the issuance of money. The opposite was equally true. Kåre Lunden, for example, writes that “after 1387, no coins were minted in Norway for a hundred years”. According to Lunden, the deep crisis in the Norwegian economy between 1350 and 1500 was not only due to the Black Death but also to the absence of a monetary system. 9 Stability in the value of money eliminated uncertainty and doubt among potential investors. Long-term planning became easier. Providers of credit could be reasonably certain that their investment would not be inflated away. They did not have to move their wealth into property or other fixed investment in order to preserve it. The willingness to save and accumulate wealth increased. History had taught the authorities the value of price stability, and the commitment mechanism was a monetary system linked to silver or gold.

The value of confidence and credibility has been the subject of extensive analysis in many fields, including jurisprudence and the social sciences. One conclusion is clear – progress can be achieved if promises are kept. If keeping promises is clearly beneficial, why is it then so difficult? The expressions empty promises and empty threats reflect the temptation to renege. The social scientist and philosopher Jon Elster writes in his book “Ulysses and the Sirens” 2 about weakness of will, shifting preferences over time, and the complexities of human nature. This is familiar ground. As early as 1960, the economist Thomas Schelling 3 discussed similar issues in analyses for which he was awarded the Nobel Prize in economics. According to Schelling, a credible threat can be difficult to establish when realising the threat involves costs for all the parties involved. A promise or a threat will be more credible if the person who has made the promise ties himself to the mast. Two other economists carried out groundbreaking work when they applied Schelling's analysis to economic issues. In 1977, Finn Kydland from Norway and Edward Prescott 4 from the US wrote an article showing that authorities who attempt to follow an optimal economic policy plan may have strong incentives to depart from the same plan at a later time. This applies even if no news has emerged to indicate that the plan should be changed. 5 Later, Kydland and Prescott were awarded the Nobel Prize in economics for their work.
Chart 10: UK income inequality rose in 1980s  Yet after a lot of work on this question – the  but, unlike the US, has since been stable  economics literature on the growth of income inequality in the US is vast – I think it’s fair to say  Gini coefficient 50  that rising trade can only account for a minority of the trend. For example, conventional theory would  45  suggest that, while it might lower the relative wage of  40  unskilled labour in developed economies, rising trade should do the opposite in developing economies. 35  Yet wage inequality has risen in many developing  30  economies as well, including those whose exports to  UK US  25  the US have grown rapidly. Separately, Paul 9  Krugman has argued that, while it may have gone 20  up a lot, the volume of US trade with developing 1961  1971  1981  1991  Source: IFS, ONS and World Bank  2001  2011  economies simply isn’t big enough to have had a very significant bearing on relative wages. And in some countries where import penetration is higher – the UK is one – the rise in income equality has been smaller than in the US. As measured by the conventional Gini coefficient, income inequality in this country has been broadly flat since the late 1980s, precisely the period over which trade with developing economies has grown most rapidly (Chart 10 again).

13 Quoted in Irwin (1996). 14 The campaigner Richard Cobden described the opponents of Corn Law abolition as “the bread-taxing oligarchy, unprincipled, unfeeling, rapacious and plundering”. 12  11  All speeches are available online at www.bankofengland.co.uk/speeches  11  Again, it is worth remembering this point today. Much of the work on trade and inequality focuses on the potentially differential effect on wages and employment. The gross costs of trade may not be evenly distributed. As Chart 11 demonstrates, however, the gross benefits of lower import prices are probably skewed as well. On average, things that are more tradable are also consumed disproportionately by the less well-off. It turns out this pattern is common to all developed economies. Chart 12 is taken from a recent study by Fajgelbaum and Khandelwal (2016), describing what would happen to relative consumer prices, and thereby the distribution of income, if international trade with the developing world were suddenly shut down. In every country, including the UK, it’s the less well-off who would be worse affected by the consequent rise in prices. Chart 11: Benefits of lower import prices are  Chart 12: This is also true in other developed  skewed towards the less well-off  economies  Source: Fajgelbaum and Khandelwal (2016); Note: Chart shows Source: Living Costs and Food Survey, ONS  real income loss from cutting off trade. Conclusion  One often hears that political discontentedness reflects rising income inequality and that this, in turn, is the fault of the growth in trade.
If countries with large deficits fail to manage their sovereign debt problems in a credible way there is a risk that they will find it difficult to borrow on the capital markets. They may then be forced to make faster and more extensive cuts than is economically desirable in the short term. However, the consolidation of public finances is necessary and may lay the foundations for better economic development in the longer term. Normally, fiscal policy tightening leads to a slowdown in economic activity. In some cases tightening measures may actually stimulate activity if they lead the households to become more optimistic about the development of their net incomes.6 However, this does not seem to be the case normally. According to an IMF study, fiscal policy tightening (in the form of a combination of reduced public expenditure and higher taxes) equivalent to 1 per cent of GDP leads GDP to fall by 0.5 per cent two years ahead, and unemployment to increase by 0.3 percentage points.7 The budget consolidation programme carried out in Sweden in the 1990s could be regarded as an example of stimulating fiscal policy tightening as the Swedish  6  According to the theory of Ricardian equivalence, or the theory of the stimulating effects of fiscal policy tightening, it is assumed that people understand that a budget deficit must sooner or later be funded by higher taxes or lower public expenditure. They are thus expected to react to increased budget deficits by increasing their own savings.

So, even if increased trade with the more rapidly growing markets in the BRIC countries may boost Sweden’s export industry somewhat, we can also expect negative thirdcountry effects from a slowdown in the United States and the euro area. Financial channels However, it is not only through trade that Sweden is affected by weaker economic development abroad. We are also affected through the financial markets. These markets have become increasingly interlinked, which is illustrated not least by the recent turbulence on the stock market. As Figure 6 shows, share prices on the various stock markets are highly correlated. Share prices have fallen on the stock markets of the world recently. However, the fall has been particularly substantial on Stockholmsbörsen, which has fallen by 21 per cent since the turn of the year, while the Dow jones index and S&P 500 index have fallen by 1 and 4 per cent respectively. The Swedish households’ holdings in shares in companies listed on Swedish market places have increased by over 475 per cent since the early 1990s.4 This means that the fall in share prices entails a reduction in wealth, which has a certain restraining effect on Swedish household consumption. This in turn has an impact on growth and employment as household consumption, adjusted for its import content, constitutes around 35 per cent of GDP in Sweden.
And I should like to take this opportunity above all to thank all of you - and the various organisations that you represent - for the tremendous support that you have given to me and to the Bank over so many years. I must begin, Gordon, by thanking you. In fact I’ve been immensely fortunate to have first Ken Clarke and then you, Gordon, in charge at the Treasury during my time as Governor. You shared the conviction that overall macro-economic stability - reflected in consistently low inflation - is a necessary condition for sustainable growth. That’s a conviction that is deeply embedded in my soul as a lifelong central banker - if indeed as a central banker I’m allowed to admit to having a soul! You inherited from Ken an inflation target in the form of a cap and a degree of transparency - and public accountability - that we’d never had before. And, in your own, very first - and inspired - decision as Chancellor, you advanced that approach radically further. You - rightly - kept the political responsibility for setting the inflation target - opting crucially for a symmetrical point target. But you devolved the technical responsibility for meeting that target to your new creation - the MPC - to which you appointed independent, external, experts in fields which are relevant to monetary policy to work with our team at the Bank. And you reinforced the procedures for transparency and accountability. In terms of the overall macro-economy this framework has served us well.

It is well understood that markets must be “fair” as well as “free” to do their job effectively - and that we have to have rules that reflect public policy concerns. But it is equally understood that, carried too far, prescriptive intervention can stifle competition and the market appetite for risk. In getting the balance right, market participants can do a lot for themselves. My impression certainly is that there is a growing recognition that high standards of professional competence and integrity are vital to a firm’s reputation and commercial success, or even its survival - and that helps to limit recourse to intervention. But it’s also true that we have a critically important, longstanding, tradition in this country that, where there is a perceived need for intervention, the relevant authorities consult extensively with the markets which helps to avoid unintended consequences and to ensure a measured and properly targeted approach. It’s a tradition which others would do well to adopt. My second explanation for the City’s success in financial services is non-discrimination. Provided they meet the standards of professional competence and integrity we expect in London, it makes no sense at all - in fact it would be self-inflicted injury - to distinguish between the firms or individuals who work here, on grounds of nationality or ethnic or religious background - or, in the case of individuals, on grounds of gender, which is a point, my Lord Mayor, which I know that you have made forcefully from the beginning of your term in office.
The first idea I wish to draw your attention to when contemplating the future is that the favourable results of the Spanish economy in the past two decades cannot be attributed to a single cause; rather, they are due to a host of reasons. Accordingly, if we wish a similar performance in the coming years, we shall have to tend to the overall block of favourable factors we have enjoyed in past years and not believe that a simple repetition of one of the recipes applied may suffice. That is all the more relevant bearing in mind that some of the impulses in the past - such as those stemming from devaluations or from European funds, for instance - will not come round again. In my opinion, those who say we should focus exclusively on sound fiscal policies are mistaken, as are those who believe wage moderation will suffice and those who think that it is enough simply to continue pushing through structural reforms. I believe any partial approach is erroneous. We must look to all the fronts. If our fiscal performance or the labour climate worsens, if the consensus on the broad thrust of economic policies I referred to earlier is broken, or if we bring structural reforms to a halt, it will not be possible to maintain favourable results in the future. BIS Review 32/2007  3  True, having joined the euro area, some sources of instability have disappeared.

The balance credit rise marked during the eleven-month period of the year the value of LEK 15.3 billion, reflecting a rise of 30 percent relative to the yearend of 2003. The easing monetary policy of the Bank of Albania has helped smooth the appreciation pressure of the Lek exchange rate. The differences between interest rates in foreign currency and those in domestic currency incurred a decline during 2004. However, the rising foreign currency inflows on one hand, and the reduction of imports volume on the other one, have created a temporary difference between the foreign currency supply and demand during the summer period. This misbalance has exerted a significant pressure on the appreciation of the Lek exchange rate, fostering the foreign market volatility. The exchange rate volatility through this temporary rise of foreign currency supply has imposed the necessity of the Bank of Albania intermediation to the foreign market during the summer period, towards purchasing the foreign currency. Though trade deficit increased, the current deficit in the third quarter has been lower than in the previous quarters, thanks to increased and positive balances of income, services, and particularly current transfers. The current transfers balance is estimated at USD 295 million, being higher than the  1/2  one of the first two quarters, and nearly 44 percent higher than the one of the third quarter of the previous year. Overall, the balance of payments performance during 2004 was positive.