LARS P. SYLL

Vi behöver göra mer

Som jag redan tidigare haft anledning konstatera, vågar Adam Posen, medlem av Bank of England’s Monetary Policy Board,  ha ett längre  blickfält än ECB och de flesta riksbanker runt om i Europa. Även om inflationen på kort sikt är ett (övergående) problem har han insett vikten av en expansiv politik för att hantera den realekonomiska kris (med sjunkande tillväxt och ökande arbetslöshet) som vi alla nu vet att finanskrisen är på väg in i. Posen säger – i ett tal han höll på en konferens för några veckor sedan:

Both the UK and the global economy are facing a familiar foe at present: policy defeatism. Throughout modern economic history, whether in Western Europe in the 1920s, in the US and elsewhere in the 1930s, or in Japan in the 1990s, every major financial crisis-driven downturn has been followed by premature abandonment—if not reversal—of the macroeconomic stimulus policies that are necessary to sustained recovery. Every time, this was due to unduly influential voices claiming some combination of the destructiveness of further policy stimulus, the ineffectiveness of further policy stimulus, or the political corruption from further policy stimulus. Every time those voices were wrong on each and every count. Those voices are being heard again today, much too loudly. It is the duty of economic policymakers including central bankers to rebut these false claims head on. It is even more important that we do the right thing for the economy rather than be slowed, confused, or intimidated by such false claims.

…

[W]hile it is rational for any given individual household or even any one bank to cut back on risk as a result of this legacy of bad debt, that means that a substantial (and sub-optimal) number of worthwhile real investment projects are going unfunded and thus are not undertaken. The cost to this investment shortfall in terms of the immediate growth outlook are substantial, and the longer-term costs are even greater in terms of impeded restructuring, diminished aggregate supply, and foregone innovation and productivity growth. Expansionary monetary policy, both on its own and in concert with constructive investment supporting policies by government, can provide the risk financing and the risk bearing capacity the economy currently lacks … In this economic context, we will know that monetary policy has done enough for long enough when long-term interest rates rise due to demand for capital from our private sector taking on risk and making investments.

At present, when there is too much risk aversion in the private sector, the British public can ill-afford unjustified risk aversion on the part of its monetary policymakers as well. The Bank of England and other central banks can do more for our economic recovery effectively, beneficially, and without political taint. And we can do more without causing high inflation. Therefore, we must do more to fulfil our responsibility to the British people. We are obliged to look past the unfounded fears of others and to get past any unwarranted reluctance on our own part, and do the right thing with the monetary tools at our disposal.

Adam Posens tal borde vara obligatorisk läsning för alla dessa “ansvarsfulla” finansministrar och riksbankschefer!

Finanspsykologi

To-day, in many parts of the world, it is the serious embarrassment of the banks which is the cause of our gravest concern …

[The banks] stand between the real borrower and the real lender. They have given their guarantee to the real lender; and this guarantee is only good if the money value of the asset belonging to the real borrower is worth the money which has been advanced on it.

It is for this reason that a decline in money values so severe as that which we are now experiencing threatens the solidity of the whole financial structure. Banks and bankers are by nature blind. They have not seen what was coming. Some of them … employ so-called “economists” who tell us even to-day that our troubles are due to the fact that the prices of some commodities and some services have not yet fallen enough, regardless of what should be the obvious fact that their cure, if it could be realised, would be a menace to the solvency of their institution. A “sound” banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him.

But to-day they are beginning at last to take notice. In many countries bankers are becoming unpleasantly aware of the fact that, when their customers’ margins have run off, they are themselves “on margin” …

The present signs suggest that the bankers of the world are bent on suicide. At every stage they have been unwilling to adopt a sufficiently drastic remedy. And by now matters have been allowed to go so far that it has become extraordinarily difficult to find any way out.

It is necessarily part of the business of a banker to maintain appearances and to profess a conventional respectability which is more than human. Lifelong practices of this kind make them the most romantic and the least realistic of men. It is so much their stock-in-trade that their position should not be questioned, that they do not even question it themselves until it is too late. Like the honest citizens they are, they feel a proper indignation at the perils of the wicked world in which they live,—when the perils mature; but they do not foresee them. A Bankers’ Conspiracy! The idea is absurd! I only wish there were one! So, if they are saved, it will be, I expect, in their own despite.

John Maynard Keynes, Essays in Persuasion, 1931

Lönesänkningar löser ingenting

Precis som under mellankrigstiden förslår nu allt fler ekonomer att lönesänkningar är medicinen som ska lösa länders problem med sviktande konkurrenskraft, få fart på ekonomin,  öka sysselsättning och skapa tillväxt som får bort skuldbergen och skapar balans i statsbudgetarna.

Senast i raden är ekonomiprofessorn Mats Persson – se mitt föregående inlägg här på docendo discimus  – som på DN igår hävdade att poängen med att ett land lämnar euron och återupprättar sin egen valuta är att det ska kunna devalvera och därigenom “kan förbättra konkurrens genom att de anställdas reallöner sänks.” Detta påstås till och med vara “själva idén bakom varje devalvering, i alla länder.”

Men att i dagens minst sagt brydsamma läge  ens antyda att man skulle kunna lösa ekonomiska problem med hjälp av lönesänkningar – vare sig detta sker via devalveringar eller ej – ska man nog främst se som ett tecken på hur lågt förtroendet för det ekonomiska systemet sjunkit. För det är ju självklart inte så att lönesänkningar räddar vare sig konkurrenskraft eller jobb. Mer än något annat behövs stimulansåtgärder och en ekonomisk politik som leder till ökad effektiv efterfrågan.

På samhällsnivå ökar lönesänkningar bara risken för att ännu fler kommer att stå utan jobb. Att tro sig kunna lösa kriser på detta sätt är en tillbakagång till den förfelade ekonomiska teori och politik som John Maynard Keynes slutgiltigt gjorde upp med redan på 1930-talet. Det var en politik som gjorde miljontals människor världen över arbetslösa. Trettiotalsdepressionen åtföljdes av deflation som visserligen kunde innebära höjda reallöner – men bara för dem som lyckades behålla sina jobb.

Visst kan det kortsiktigt fungera för enskilda företag att satsa på frysta eller sänkta löner. Men det är ett atomistiskt felslut att tro att en generell lönesänkningspolitik skulle främja ekonomin. Tvärtom. Som Keynes visade blir den aggregerade effekten av lönesänkningar katastrofal. De sätter igång en kumulativ prissänkningsspiral som får företags och enskildas skulder att realt öka eftersom skulderna nominellt inte påverkas av den allmänna pris- och löneutvecklingen. I en ekonomi som alltmer kommit att bygga på ökat låntagande och skuldsättning blir detta inkörsporten till en deflationskris. Detta i sin tur leder till att ingen vill låna pengar och kapital eftersom betalningsbördan över tiden blir för betungande. Företag blir insolventa, investeringarna minskar, arbetslösheten ökar och depressionen står för dörren.

Den överhängande faran för dagens ekonomier – på sikt – är att de inte får fart på konsumtion och kreditgivning. Förtroende och effektiv efterfrågan måste återupprättas. Vi kan självklart inte bara sitta med armarna i kors och vänta. Men att föreslå en problemlösning byggd på sänkta löner är att skriva ut recept på än värre katastrofer. Vill ekonomer och politiker ta samhällsansvar – och inte låta enfald få ersätta analysförmåga och besinning – måste de klart och tydligt ta avstånd från allehanda kortsiktiga och kontraproduktiva lönesänkningsstrategier. Skall man få bukt på den ökande arbetslösheten krävs vassare, bättre och effektivare instrument – som exempelvis en aktiv och offensiv finanspolitik. 

Paul Krugman när han är som bäst

Nobelpristagaren i ekonomi Paul Krugman funderar på sin blogg om nationalekonomi verkligen är en vetenskap:

I’ve never liked the notion of talking about economic “science” — it’s much too raw and imperfect a discipline to be paired casually with things like chemistry or biology, and in general when someone talks about economics as a science I immediately suspect that I’m hearing someone who doesn’t know that models are only models. Still, when I was younger I firmly believed that economics was a field that progressed over time, that every generation knew more than the generation before.

The question now is whether that’s still true. In 1971 it was clear that economists knew a lot that they hadn’t known in 1931. Is that clear when we compare 2011 with 1971? I think you can actually make the case that in important ways the profession knew more in 1971 than it does now.

I’ve written a lot about the Dark Age of macroeconomics, of the way economists are recapitulating 80-year-old fallacies in the belief that they’re profound insights, because they’re ignorant of the hard-won insights of the past.

What I’d add to that is that at this point it seems to me that many economists aren’t even trying to get at the truth. When I look at a lot of what prominent economists have been writing in response to the ongoing economic crisis, I see no sign of intellectual discomfort, no sense that a disaster their models made no allowance for is troubling them; I see only blithe invention of stories to rationalize the disaster in a way that supports their side of the partisan divide. And no, it’s not symmetric: liberal economists by and large do seem to be genuinely wrestling with what has happened, but conservative economists don’t.

And all this makes me wonder what kind of an enterprise I’ve devoted my life to.

Kanske något för Kungliga Vetenskapsakademien och de olika nobelpriskommittéerna att fundera på i dessa stundande pristider?

Modern macroeconomics – a crash course

Robert Lucas gav häromdagen en stor intervju i Wall Street Journal, där han gav sin bild av vad han försökte åstadkomma när han genomförde sin ”rational expectations revolution” i makroteorin för 30-40 år sedan. Tyvärr artar sig intervjun mest till ett praktexempel på självfabricerad historierevisionism. För en beskrivning av vad Lucas verkligen gjorde med sin hypotes om rationella förväntningar – och i vilket sammanhang detta ägde rum – är då Paul Krugmans  kortversion av modern makroekonomi  definitivt att föredra:

1. In the beginning was Keynesian economics, which was ad hoc in the sense that on some important issues it relied on observed stylized facts rather than trying to deduce everything from first principles. Notably, it just assumed that nominal wages are sticky, because they evidently are.

2. In the 1960s a number of economists started trying to provide “microfoundations”, deriving wage and price stickiness from some kind of maximizing behavior. This early work had a big payoff: the Friedman/Phelps prediction that sustained inflation would get “built in”, and that the historical tradeoff between inflation and unemployment would vanish.

3. In the 1970s, Lucas and disciples take it up a notch, arguing that we should assume rational expectations: people make the best predictions possible given the available information. But in that case, how can we explain the observed stickiness of wages and prices? Lucas argued for a “signal processing” approach, in which individuals can’t immediately distinguish between changes in their wage or price relative to others — changes to which they should respond by altering supply — and overall changes in the price level.

4. In the 1980s, the Lucas project failed — pure and simple. It became obvious that recessions last too long, and there are too many sources of information, for rational confusion to explain business cycles. Nice try, with a lot of clever modeling, but it just didn’t work.

5. One response to the failure of the Lucas project was the rise of New Keynesian economics. This basically went back to ad hoc assumptions about wages and prices, with a bit of hand-waving about menu costs and bounded rationality. The difference from old Keynesian economics was the effort to use as much maximizing logic as possible to interpret spending decisions. I find NK economics useful, if only as a way to check my logic, although it’s not really clear if it’s any better than old-fashioned Keynesianism.

6. The other response, by those who had already invested vast effort and their careers in the Lucas project, was to drop the whole original purpose of the project, which was to explain why demand shocks matter. They turned instead to real business cycle models, which asserted that the ups and downs of the economy are caused by technological shocks magnified by rational labor supply responses. Full disclosure: this has always seemed absurd to me; as many have pointed out, the idea that the unemployed during a recession are voluntarily choosing to take time off is something only a professor could believe. But the math was impressive, and RBC became a self-contained, self-replicating intellectual world.

7. The Lesser Depression arrives. It’s clearly not a technological shock; clearly, also, nobody is confused about whether we’re in a slump, as the old Lucas model required.

In fact, it looks a lot like what Keynes described, and old-Keynesian models work very well, thank you, both at explaining it and in making predictions about such things as interest rates and the effects of fiscal austerity. But the descendants of the Lucas project know that Keynes was wrong — it’s what their teachers and their teachers’ teachers have been saying all these years. They cannot accept anything resembling a Keynesian explanation without devaluing everything they’ve done with their intellectual lives.