Chart 2 International synchronisation of inflation (headline and core) Headline inflation  Core inflation  average pairwise correlation  0.6 0.5 0.4 0.3 0.2 0.1  0.0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 Notes: Average pairwise rolling (15 years) correlation of seasonally-adjusted quarterly headline and core inflation. The country-specific average pairwise correlation of a time series xi in country i (pcix ) is the average of the contemporaneous correlation between xi and xj for all i ≠ j. The average pairwise correlation (pc x ) is computed as the average of the pcix across all countries and, as such, provides a measure of international synchronization of 𝑥𝑥. Source: OECD, Global Financial Data, DataStream, National sources, and Bank Staff calculation. 8  BIS central bankers’ speeches  Chart 3 International synchronisation of inflation (headline and core) and policy rates at different frequencies  Notes. Rolling average (15 year window) of the bilateral dynamic correlations of an unbalanced panel of 46 countries. Dynamic correlation is a function of the cross-correlation and autocorrelation functions of two series that breaks down their comovement into different frequencies. “Cohesion” is the average of bilateral dynamic correlations in the sample. See Croux 26 et al. (2001). Source: OECD, Global Financial Data, DataStream, National sources, and Bank Staff calculations. 26  Croux & Mario Forni & Lucrezia Reichlin, 2001. “A Measure Of Comovement For Economic Variables: Theory And Empirics,” The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 232-241, May.
Philipp M Hildebrand: Monetary policy situation and economic prospects Summary of a speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Centre for Banking Studies, Lugano, 28 September 2004. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  In formulating its medium-term monetary policy, the Swiss National Bank (SNB) must take the uncertainty surrounding the development of the economic environment into consideration. The SNB believes that the economy is well on the road to recovery, both in Switzerland and abroad. For our country, it anticipates real GDP growth of close to 2% in 2004. Sustained growth is also expected for the coming years. Consequently, the utilisation of the economy’s production capacity will steadily improve, while unemployment will gradually decline. The improved utilisation rate will be accompanied by a rise in inflationary pressure in the medium term. This scenario could be revised, however, if new information were to come to light. The SNB will thus continue to monitor economic developments closely and will subsequently draw the necessary monetary policy conclusions. BIS Review 54/2004  1