Eurogunea: zenbait ikasgai Terzi-ren bidez (ii)

2 Ikus http://ineteconomics.org/uploads/papers/INET-2015-TERZI-f.pdf.

3 Ingelesez: “From Smith, I will take a notion which is so beautifully and compellingly stated on the first page and then continues throughout the five books of The Wealth of Nations: that a nation’s prosperity is its capacity to provide “necessaries and conveniences of life” to its members. Smith is telling us that the goal of a nation and the purpose of its political economy is access to the product of labor, whether it is obtained domestically or from others in exchange for our exports.

For Smith, the wealth of a nation is measured by its power to acquire real, not monetary, values. Applied to Europe today, this reminds us that European policies should aim at the goal of raising the growth of real output and employment and consider financial conditions as wholly functional to achieve real prosperity.”

4 Ingelesez: “From Keynes, I will take the belief, (…), that the way in which a monetary economy works is so fundamentally different from that of a non-monetary system of exchange that any economic theory that does not assign money a central role in the formation of people’s decisions is inadequate and deficient. In an economy of money contracts and uncertainty, agents make decisions on the basis of financial stocks and expected monetary flows. For Keynes, monetary values shape real economic outcomes in a monetary economy, and effective monetary management thus becomes an essential condition for avoiding financial mishaps that ultimately affect real prosperity.”

5 Ingelesez: “The T-shirt model implies the following statements:

The stock of private financial claims includes claims on the private sector, claims on the government sector, and claims on the foreign sector.

To achieve its desired savings target, the private sector must adequately fund it.

Overall private spending changes in response to whether the private sector deems its savings short or in excess of its target.

Domestic output and jobs increase with an increased willingness of the private sector (notably, but not exclusively, banks) to expand credit, of the public sector to net issue debt, or of the foreign sector to spend on domestic output by offering its liabilities as payments and as a place where storing residents’ savings.

This means that the final causes of growth of real output and jobs towards the economy’s potential (i.e., closing the output gap) include the expansion of bank lending, government net spending, and net exports.”

6 Ingelesez: “Notice that the argument that public debt may become unsustainable is mute, as any debt is sustainable if the central bank is authorized to use its floating currency to purchase that debt [5].” [5] Ikus Mosler, W. “Soft Currency Economics II,” Kindle edition.

7 Ingelesez: “With regard to fiscal policy, ceilings on public debt and deficits, combined with credit sensitive Eurozone governments, have virtually removed from the table the option of expanding public debt: Those countries that had “fiscal space” took no action, and the others were forced to take action to reduce debt, producing a deeper recession than if government deficits had been left to adjust to cyclical conditions. The outcome of Eurozone fiscal policy constraints that have turned the stopcock of debt in a clockwise direction, shutting off the funding of savings, have left an increase in private debt and/or an increase in claims on nonresidents as the only possible sources of savings for Eurozone residents, and thus a possible basis for economic recovery.“

8 Ingelesez: “The problem, however, is twofold. First, no Eurozone policy exists to foster an increase in either private debt or net exports when growth is sluggish. It may thus be seen as “fortunate” that stagnation became so serious, and the international prices dynamics so contained, that the rate of inflation fell significantly below the ECB target, in 2014, and the prospect of deflation justified the action of the ECB according to its price stability mandate. Then, the ECB slashed interest rates and also engaged in outright purchase programs (of asset-backed securities, covered bonds, and public sector debt), also known as Quantitative Easing (QE), allegedly to encourage bank credit expansion and thus an expansion of private debt.

Second, following the logic of the T-shirt model presented above, the consequences of low interest rates on real output and jobs should be judged by their effects on debt (i.e., actual gross private savings) and on the saving intentions of the private sector. Because they help governments to comply with common fiscal rules, low interest rates may have some limited effects on lowering intended savings if some of the expenses needed to service the debt are reallocated to other, more growth-friendly items. Yet, the distribution of financial savings from lenders to borrowers has ambiguous effects, and the reduced expansion of public debt works in the opposite direction. Only the weak euro has offered some fuel to savings and job creation, as markets reacted to QE by steering the external value of the euro down. Indeed, the continued emphasis on slashing government debts, and thus private savings, and ongoing deleveraging in the private sector leave savers with no alternative to searching for ways to fund their desired savings through net exports. Yet, being forced to rely on external demand (and thus on the creation of private and government debt abroad) marks a dramatic shortfall to the promise of a powerful single market in Europe that lessens its dependence on foreign buyers, and thus on foreigners’ debt. In addition, the current account surplus solution comes at the cost of increasing risk to residents, who accumulate claims abroad, lowers the real consumption per capita, and makes the Eurozone economy dependent on the strength of demand from abroad. Also, as the current account surplus pressure takes hold, a euro appreciation will sooner or later dry up even this last source of funding for European savings.”

9 Ingelesez: “The current Eurozone’s reluctance to let member countries expand their government debt without limit is reasonable. What is not reasonable is the reluctance to expand public debt in some form that would be under the supervision of a shared governance, without this being in the context of a transfer union. This is rooted in a deep aversion to public debt that stems from the view that growth prompted by fiscal deficit is not sustainable…”

10 Ingelesez: “… there is no saving without debt, and, pleasant or unpleasant as it may be, there is no net private saving without some combination of government and foreigners’ debt. If this view is reasonable, then the lack of a set of internal governance instruments that can effectively work to match Eurozone citizens’ intended savings is the fundamental concern in the current architecture of the Eurozone and the final cause of a continued stagnation that can be relieved only by vigorous growth outside Europe.”

11 Ingelesez: “In conclusion, a strong case can be made for reclaiming the fiscal instrument in Europe. This, however, is not without political challenges. Active fiscal policy had ultimately been abandoned for lack of a better mechanism to prevent abuse of a sovereign boundless spending power. Although some of the arguments are in need of a profound review (such as that corruption lives well where there are no fiscal rules—and yet a number of contemporary political scandals prove that corruption lives well even under a balanced budget rule), there are issues to be addressed.“

12 Ingelesez: “Designing a “constrained discretion” mechanism that creates sufficient debt (and savings) to close the output gap and support sustainable full employment is a far superior policy strategy than the current policy stance.”

13 Ingelesez: “Ensuring that the stopcock of debt and savings lets enough fuel into the Eurozone private sector and allows regions to compete for the financial claims in circulation would be enough to stop the widening differences in economic performance among member countries, while reforms may work to further narrow the structural differences among member countries. This is the true quantum leap that the Eurozone needs today.”

14 Ikus http://www.amazon.com/Currency-Economics-Modern-Monetary-ebook/dp/B009XDGZLI/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1352305630&sr=1-1&keywords=soft+currency+economics.

15 Espero dezagun laster eskuragarri izango dela.