tisdag 6 mars 2012

Stimulanser och tillväxt idag-klipp

I höstas började jag på ett inlägg som skulle behandla debatten om nedskärningspolitikens konsekvenser för tillväxt och ekonomins funktionssätt, men orkade aldrig skriva klart det. Klipp nedan. Idag aktualiserades i alla fall det här ämnet av en väldigt intressant artikel i FT om kommissionären László Andor, som verkar stå för en väldigt bra analys och politik på det här området, med wage-led growth och allt, som vore han en Stockhammer. FT:

"Arguing against austerity in Brussels has, for much of the past two years, been a quixotic affair.

For László Andor, it included resorting to Twitter to rail against automatic sanctions for highly indebted eurozone countries and giving speeches to obscure think-tanks warning that cuts without investment would strangle Europe’s periphery.

Yet Mr Andor, the European Union commissioner for social affairs, is no longer a lonely voice.

A series of increasingly bleak economic data from the eurozone’s most troubled countries have given credence to his argument that a policy of harsh austerity may prove self-defeating. A confidential report by Greece’s international lenders last month for the first time acknowledged a 'fundamental tension' within Athens’ austerity programme. The country’s manufacturing sector suffered its sharpest decline in nearly 13 years in February, according to a survey by Markit.

'With Greece ... the medicine that has been used is extremely demanding – and risks killing the patient,' the Hungarian-born Mr Andor says in an interview. 'Nobody can seriously believe, except for the very naive, that if you cut wages by 20 per cent, the week after they will start exporting cars.'

His scepticism could seem almost heretical in the Commission, which last month received powers to investigate national budgets and recommend fines for countries that do not drastically cut their deficits.

But the austerity versus growth debate has forced its way into the political discourse. In France François Hollande, the Socialist presidential candidate, wants to challenge the fiscal pact while Denmark’s Helle Thorning-Schmidt, prime minister, has called for targeted stimulus. The Dutch coalition is split over how to meet EU budget targets, while Spain has announced it will flout those targets, to Brussels’ great frustration.

Mr Andor says part of Europe’s problem stems not just from the high wages, and ensuing lack of competitiveness, of Greek or Spanish workers. The too-low wages of German workers has depressed demand, he argues.

'There is a European interest that, in countries where there can be wage increases, there have to be wage increases,' he says.

Mr Andor, a UK-trained economist, came to his current job after directing the European Bank for Reconstruction and Development, which helped steer loans and investment in eastern Europe.

The experience coloured his views on the crisis. /.../"

Stanley Pignal och Peter Spiegel, "EU austerity critic's view gains credence", FT 6 mars 2012

och jfr:
"One definition of insanity is to do the same thing over and over again and expect different results. Germany’s determination to impose a fiscal hair shirt on its eurozone partners did not work in the 'stability and growth pact'. Is it going to work in the 'treaty on stability, co-ordination and governance' agreed last week? I doubt it. The treaty reflects the view that the crisis was due to fiscal indiscipline and that the solution is more discipline. This is far from the whole truth. Rigorous application of such a misleading idea is dangerous."

Martin Wolf, "The pain in Spain will test the euro", FT 6 mars

Relaterade inlägg: "Spendera sig ur krisen?", 7 sept 2011; "Efter recession: stagnation", 7 nov 2011; "'Expansionary austerity'", 19 januari 2012; "Rachman och Tett om globaliseringen, ojämlikhet, Davos-konsensus och finanssektorn", 31 januari 2012.


I den nuvarande krisen har vissa regeringar - t ex USA - genomfört stora stimulanspaket á la keynesianism, medan andra - t ex Storbritannien - valt den motsatta vägen med starka åtstramningar. Kan man säga idag något om konsekvenser av dessa olika val för tillväxt och vägen ut ur krisen? Jag ska här göra ett försök.


"The Bank of England governor blamed the rest of Europe for Britain’s feeble recovery. “The main impediment to the strategy of rebalancing our economy is markedly slower growth in our major export markets, especially in the rest of Europe,” he said on Tuesday. By contrast, Labour frets that economic policy is repeating the historic mistake of the 1930s with “too far, too fast” deficit reduction.

Both of these explanations are close to irrelevant in explaining what has gone wrong this year. The real cause of economic weakness has been the surprise of high inflation that is not matched by income growth."

Chris Giles, "Blame Britain's feeble recovery on high inflation", FT 19 okt

"Britain’s economic recovery is off-track, Sir Mervyn King warned on Tuesday night as he defended the Bank of England’s decision to pump money into the economy again by purchasing £75bn of gilts over the next four months."

Chris Giles, "UK recovery off-track, says King", FT 18 okt

"UK gross domestic product on the last count was 2.8 per cent above the recession trough of 2007-08, the smallest recovery of any major industrial country except Italy. "

! "almost 10 per cent of government spending, amounting to more than £30bn ($47bn) a year, is classified as “net investment” and thus outside the target."

Samuel Brittan, "The splintered opposition to fiscal austerity", FT 20 okt


"The Greek austerity plan is as close as you can get to a real-time experiment: what happens to an economy when one policy variable is changed and others are fixed? Ireland is conducting a similar test and the news is not that encouraging; its GDP fell by 2.3% in the fourth quarter of 2009. In Latvia, the pain has been even greater; its GDP fell by 18% last year.

A previous example of the widespread use of fiscal-austerity programmes was during the Asian crisis of the late 1990s. These initiatives were generally blamed for making the crisis worse. The IMF was in favour of such measures at the time but has since changed its tune. It called for co-ordinated fiscal stimulus packages to deal with the credit crunch.

So why is Greece being forced to take the opposite tack? It is an extreme case. The combination of sluggish growth, a budget deficit above 10% of GDP, a public-debt-to-GDP ratio of more than 100% and high bond yields is unsustainable. The private sector will no longer finance the Greek government and other EU nations, now required to bail out the spendthrift Hellenes, are insisting on a high price to appease their own voters. Other countries are not (yet) in as bad a position."
Economist Buttonwood-kolumnen, "Greek chorus of boos", 8 maj




‎"Som bekendt har S og SF længe argumenteret for, at økonomien kan sparkes i gang ved at fremrykke offentlige investeringer, og Thorning har selvsagt behov for at demonstrere handlekraft som ny regeringschef.

Hun bliver næppe i stand til at overbevise landets økonomer om, at en vækstpakke på 10 milliarder vil gøre en forskel. /.../
Paradoksalt nok betyder S og SF’s kovending i den økonomiske politik, at det bliver tilsvarende sværere for Løkke at beskylde Thorning for at føre en uansvarlig politik. "


Uppdatering 8 mars
Europe declared war on Keynes, and Keynes is winning."

Nicholas Kristof, "In Athens, Austerity's Ugliness", NYT 7 mars

Uppdatering 31 mars
Brad DeLong och Larry Summers har kommit med ett nytt paper där de hävdar att de funnit det läge - unikt och ovanligt - där större stimulanspaket och ökade underskott faktiskt kan vara självfinansierande. De hävdar att USA är i det läget idag.
DeLong och Summers, "Fiscal Policy in a Depressed Economy" (pdf), mars 2012
Economist, "Self-sustaining stimulus", 24 mars 2012
Gavyn Davies, "The optimal speed of fiscal adjustment", 30 mars
Simon Wren-Lewis, "Is Eurozone Austerity Self Defeating, and is it all Germany's fault?", 29 mars

Och Simon Wren-Lewis granskar skillnad i åtstramningspolitik som förklaring till varför USA:s återhämtning går bättre än Storbritanniens.
Wren-Lewis, "Comparing the UK and US recoveries", Mainly Macro 30 mars

Och Jonathan Portes har ett jäkligt intressant inlägg om Storbritanniens nuvarande ekonomiska politik. Han - som är åt det keynesianska hållet - hävdar att regeringen slagit in på fel spår med sin starkt åtstramande politik, och vill att de ska ändra kurs. Han har varit och diskuterat med regeringen, och tar upp att två av de andra ekonomer som hördes menade att även om Portes har rätt i sak så vore det problematiskt att ändra kurs nu, eftersom det skulle sänka "marknadens förtroende" för regeringens politik. Är det verkligen så, frågar Portes, och det här är ju en riktigt intressant fråga. Jag klipper ur hans inlägg, och klippet börjar med att han karaktäriserar "det är för sent att ändra sig nu"-argumentet som "Macbeth-argumentet":
"I described this as the 'Macbeth argument', from the following quote:

'I am in blood stepped in so far that should I wade no more, Returning were as tedious as go o'er.' [Act III, scene iv.]

In other words, since Macbeth has already killed Duncan and Banquo, it is better to carry on (and order the deaths of Macduff and his family) than to stop. So, although misguided policy has led to unnecessary economic damage, that damage is (returning to economist speak) a sunk cost; and the pain ahead is less then the pain that we would suffer if we changed course, as a consequence of the possible negative financial market reaction.

The Treasury also appears to subscribe to a variant of this argument. When the original fiscal consolidation plan was welcomed by the rating agencies, that was a vote of confidence:

'Standard & Poor's, the ratings agency, revised its outlook on Britain from negative to stable..The Chancellor said: ''That is .. a vote of confidence in the Coalition Government's economic policies..'' Telegraph, 26 October 2010

But when the same rating agencies realised the damage the plan was doing to growth, that made it even more necessary:

'Fitch revised the outlook on the UK's rating to negative from stable....''A week from the Budget this is a reminder of why it is essential Britain sticks to its plans to deal with its debts,'' a Treasury spokesman said...' Telegraph, 14 March 2012

Even leaving aside the obvious inconsistency here, I remain of the view that this argument is incorrect, for three reasons:

As I argued here, I don't think it's plausible to argue that markets have more confidence in governments that never adjust policy even when it is sensible to do so. Markets can be irrational. But there is neither a theoretical reason nor any empirical evidence to suggest that they are irrational in this particular way. Indeed, history suggests the opposite: that the real hit to credibility comes from sticking to unsustainable policies – think Argentina in 2001 or Britain in 1992. Nor does the argument that if the government adjusts its strategy, markets will lose all faith in its ability to consolidate at all, carry much weight: Simon Wren-Lewis explains why here"

Portes, "It's not too late to change course: Macbeth and fiscal policy", Not the Treasury View 27 mars

Uppdatering 3 april
John Thornhill rapporterar i FT från ett ekonomiskt forum i Italien där Nomura Capitals chefsekonom Richard Koo presenterat sin analys av vilken politik som eurozonen borde bemöta krisen med. Hans analys skiljer sig rejält från eurozonens austerity-älskare... FT:
"In an interview, on the sidelines of the Ambrosetti financial forum in Cernobbio, Italy, Mr Koo outlines his theory of 'balance sheet recessions', which runs so much in contrast to current eurozone orthodoxy. When countries such as Japan experience a slump in asset prices, then traumatised private-sector companies, banks and households will do everything possible to deleverage their balance sheets and pay down debt – even when interest rates are near zero. In such circumstances, the government has no alternative but to increase public spending to prevent a collapse of demand. 'The key point is that if the private sector is deleveraging, the last thing you want is for the government to cut its budget deficit,' he says. 'If central banks bring interest rates down to almost zero and nothing happens then it is not an ordinary world.' Mr Koo says that when Japan listened to the advice of outside experts, such as the International Monetary Fund, and pursued fiscal consolidation in 1997 it tipped into a damaging recession. 'The government cut spending and we had five quarters of negative growth and it took Japan 10 years to recover,' he says. Some European officials at the Ambrosetti forum appeared to be scarcely able to conceal their scorn when listening to Mr Koo’s presentation. They argue it is delusional to believe one can choose between austerity and growth. Austerity, they say, is an indispensable precondition for the return of market confidence and economic growth. Moreover, a further piling up of public debt to solve a problem of over-indebtedness would be counterproductive. Financial markets would not tolerate a further ballooning of budget deficits in countries such as Spain, Portugal, Ireland and Italy. Mr Koo accepts that the 17-member eurozone is more complex than Japan: its economies are moving at different speeds and directions and some of them, notably Greece’s, have their own particular challenges. But he argues that the eurozone’s fiscal compact, which enforces synchronised austerity even for its healthier members, risks repeating Japan’s mistakes of 15 years ago. And he rejects the idea that increased public borrowing would necessarily scare the markets: Japan, the US and the UK are running looser fiscal policies while still enjoying low rates of borrowing."
John Thornhill, "Spectre of 1930s haunt's Europe's periphery", FT 2 april

Och voxeu har startat en ny debattserie på temat "Has austerity gone too far?", som börjar med en artikel med den titeln av Giancarlo Corsetti, professor i nationalekonomi i Cambridge, 2 april. 

Uppdatering 10 april
Ryan Avent har en väldigt bra kris-översikt där han också konstaterar att Europas regeringar fokuserat för mycket på åtstramningspolitik som krishantering.
Avent, "Which fundamental issues has Europe solved?", Free Exchange 5 april 

Uppdatering 17 april
John Thornhill-citatet ovan om Koo lade ju fram Koos analys. (I vårbudgetdebatten i Riksdagen igår refererade för övrigt Ulla Andersson (v) till en "japansk ekonom" som talade emot EU:s nedskärningspolitik - var det månne Koo hon syftade på?) Felix Salmon har ett nytt, kritiskt, inlägg om Koos analys och reformförslag för eurozonen som han lade fram vid Institute for New Economic Thinking-konferensen i Berlin i förra veckan. 
Salmon, "Why Richard Koo's idea won't save the eurozone", 16 april
Koo, "Revitalizing the Eurozone without fiscal union" (pdf), 16 mars

Uppdatering 24 april
Två italienska ekonomer har ett nytt papper ute som de introducerar på voxeu som en del av den Corsetti-ledda austerity-debatten. Det handlar om länken mellan statsskuld (som % av BNP) och ekonomisk tillväxt, och de hävdar att även om mängder av studier etablerat den negativa korrelationen dem emellan, så har ingen studie visat att det verkligen rör sig om kausalitet i riktningen att hög statsskuld ger låg tillväxt. De använder en instrument-variabel-approach för att utvärdera teorin om kausalitet och kommer fram till att hypotesen inte kan bevisas.
Ugo Panizza och Andrea F Presbitero, "Is high public debt harmful for economic growth?", voxeu 22 april 

Och FT konsterar att åtstramningspolitiken orsakar politiska motreaktioner, senast i Frankrike (Sarkozys förlust i första omgången) och Nederländerna (där extremhögern utträdde ur regeringskoalitionen i protest).
"Fiscal austerity measures would reduce eurozone economic growth by one percentage point this year, according to Gilles Moec, European economist at Deutsche Bank. 'That alone would not drive the eurozone into economic contraction, but we have a combination of fiscal austerity and a credit crunch. It is a self-inflicted recession – you don’t get the same combination of shocks elsewhere in the world.'" 
Ralph Atkins och Robin Wigglesworth, "Backlash against eurozone austerity", FT 23 april

Uppdatering 7 maj
Steve Johnson rapporterar i FT fm om drives både i Storbritannien och på EU-nivå för att få pensionsfonder att investera i materiell infrastruktur, som Europa har ett stort behov av.
"European pension funds are preparing to unleash a wave of investment into infrastructure.
The surge in interest follows a push by the UK government to encourage pension funds to invest in its national infrastructure plan, as well as the Europe 2020 Project Bond Initiative. This was devised by the European Commission and European Investment Bank to attempt to drum up private sector financing of some of the €1.5tn to €2tn the bodies estimate needs to be spent on EU infrastructure by 2020."
Johnson, "Funds gear up to build bridges", FT fm 29 april

Uppdatering 11 maj
Economist Buttonwood lyfter frågan om förhållande retorik - faktisk politik, och hur man mäter austerity.
"TAKE two countries. One has a government "inflexibly committed to austerity", lacking a Plan B and dragging the economy down, according to its critics. The second country has a new President who has just declared that his victory is a rejection of austerity. The victory has been hailed as a new dawn for European politics.
The first country, the UK, is aiming to balance its budget by 2017. The second country, France, plans to balance its budget by, er, 2017. Funny old world."
"Spot the difference", 8 maj
"TAKE two governments. One has increased spending by 31.8% since 2007 (in nominal terms) and the other has increased it by 29.3%. Which one has followed a Keynesian stimulus approach since the financial crisis broke and which one has committed itself to austerity? Well, the former is America and the latter is Britain."
"Spot the difference, part two", 9 maj

Brittan talar för nominal GDP targeting som alternativ till austerity.
Samuel Brittan, "A real alternative to austerity economics", FT 10 maj

Uppdatering, 16 december 2012
Frankrikes Hollande talar som en keynesian, Storbritanniens Cameron som en monetarist; båda staterna siktar på budgetbalans år 2017. USA:s administration har genomfört ett berömt och vida diskuterat stimulanspaket; Cameronregeringen hårt kritiserats för sin åtstramningsapproach. I USA ökade statsutgifterna i nominella termer 2007-2011 med 31,3 procent; i Storbritannien med 29,1 procent. Att mäta stimulans- och åtstramningspolitik är inte okomplicerat, och kopplingen mellan retorik och faktisk politik är lika svårt det [1].

Economists Buttonwood-blogg har nyligen kommit tillbaka till detta. De första fem månaderna 2011 var Storbritanniens statliga utgifter £256 miljarder; motsvarande period 2012 £264 miljarder. Också om man räknar bort betalningarna på statsskuldens räntor (på bloggen: 1, 2) så har utgifterna ökat. Antalet offentliganställda har Cameronregeringen dock minskat. Från första kvartalet 2010 till första kvartalet 2012 minskade detta från 6,29 miljoner till 5,66 miljoner. Personalkostnaderna har dock inte minskat lika mycket. Och den mesta åtstramningen har åstadkommits av höjda skatter och minskade kapitalutgifter, inklusive offentliga investeringar.

Buttonwood har också redovisat beräkningar från Goldman Sachs på hur mycket åtstramning olika eurozonsstater genomför 2012 och 2013, som procent av BNP. Siffrorna är: Frankrike 1,1 och 2,1. Tyskland 0,3 och 0,5. Grekland 2,2 och 2,8. Irland 1,1 och 2,1. Italien 3,3 och 1,3. Nederländerna 1,1 och 1,4. Portugal 3,1 och 2,0. Spanien 3,5 och 2,4. Som bloggaren säger: "note that Francois 'anti-austerity' Hollande is imposing the third-strongest squeeze next year".

[1] Och därför är det nödvändigt att inte bara kolla på retoriken.

Economists Democracy in America-blogg: "Austerity and the right", 4 december. Citerar bl a Wolfgang Münchau som sågar ("Merkel's opponents offer too much consensus", FT 2 dec) SPD:s accepterande av Merkels austerity-diskurs och -politik:
What is most infuriating is the SPD’s sheer inability to explain in a clear way why the chancellor is wrong. The reason for this inability is that the party has bought into the same panoply of false crisis narratives. It bought into the lie about fiscal profligacy as the cause of the crisis, and the need for austerity to solve it... Whenever the Social Democrats get infected by the need to feel responsible, they end up with the wrong policies. The SPD supported financial deregulation in the late 1990s. The SPD supported fiscal austerity. It supported a constitutional debt brake. If you add it all up, the SPD supports economic policies that have ultimately given rise to the imbalances that have driven the eurozone apart.
Democracy in America-bloggaren pekar på att situationen är likadan i Nederländerna som har en koalitionsregering som innefattar det stora mittenvänsterpartiet PdA:
During the electoral campaign, Labour nodded imperceptibly towards a Keynesian take on the euro-zone crisis, protesting the EU-mandated deficit limit of 3% of GDP as a senselessly rigid measure that would "cut the economy to pieces". But they then signed on to a governing accord that immediately slashes the deficit by nearly 2% of GDP through tax hikes and budget cuts. Since the new cabinet took office last month, Labour ministers and MPs have been referring constantly to the party's tradition of sober fiscal rectitude going back to the 1940s, to allay any suspicion that they might be softies or pinkos; they ridicule calls for stimulus, and hammer on the moral-hazard dangers of official writedowns or haircuts on Greek debt, lest the Greeks abandon promised reforms and other European debtor nations clamour for the same deal. Labour's acquiescence to austerity policies has held even as the Dutch economy shrank a startling 1.1% in the third quarter. The party confines its leftist impulses mainly to spreading the domestic pain of austerity in a more egalitarian fashion, through progressive taxation and redistribution measures; on euro-zone policies, they've eliminated any daylight between themselves and the centre-right Liberals. 
Bloggaren konstaterar att nederländska bankekonomer och akademiska ekonomer som tillfrågas i medierna tenderar att kritisera den ensidiga nedskärningspolitiken, men att detta inte får något politiskt genomslag alls.

Uppdatering 26 januari 2013
Menzie Chinn jämför USA och Storbritanniens BNP-utveckling i krisen och konstaterar att USA med mer expansiv penningpolitik och framför allt mer expansiv finanspolitik utvecklas klart bättre. Cameron-Osbornes envisa austerity-politik framstår som misslyckad.

Chinn, "The wages of austerity", 25 januari

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