BCE: Diabolico Perseverare

Avevo preparato per oggi un pezzo sulla sharing economy, tema che ho trascurato un poco, ultimamente. Ma poi il comitato di governo della banca centrale europea si è riunito giovedì 8 dicembre e subito dopo il presidente della banca, Mario Draghi, ha letto il relativo comunicato stampa e ha risposto alle domande, sempre più insulse, dei giornalisti presenti. E quindi ho deciso di parlare di politica monetaria. Cosa che farò ancora dopo la riunione del Federal Open Market Committee che si terrà il 13 e 14 dicembre, e si concluderà anch’esso con comunicato stampa e dichiarazioni della presidente Yellen.

L’obiettivo di oggi è dunque formulare delle ipotesi circa gli effetti del diabolico perseverare della bce, annunciato appunto ieri.

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Secular Stagnation, Negative Interest Rates, Irrelevance of The European Central Bank, Self-Inflicted Irrelevance of Governments….Helicopter Money for Europe?

It has been noted that the focus of macroeconomics has shifted dramatically after the results of the 2007 credit crunch have made themselves felt through recessions and stagnation: from ‘stabilization-around-a- positive-trend’ to resuming growth –or, at least, avoiding too hard and long a secular stagnation.

My starting point is that the 2007-2008 banking-cum-financial crisis shocked us into realizing that a huge difference had been building between ‘what it was’ and ‘what it will be’. More specifically, I argue that the pre-2007 high per capita income world of high rates of GDP growth, productivity increases, population expansion, government countercyclical policies, and shrinking income inequality, is, more likely than not, gone. Unfortunately, all those characteristics of the pre-2007 period were exactly the causes for growth. It follows that the post-2007 world has to be necessarily a world characterized by slower growth, increasing inequality, ageing population, slowing investment expenditure vis-à-vis increasing saving, and government consciously chosen impotence.

How long will it last? How costly will it be in terms of lost output and permanent fall in potential output?

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La Bce, impotente, va avanti con il QE a vantaggio delle banche

Vero è che non leggo un quotidiano italiano da undici anni e non guardo un telegiornale praticamente dal 1991 (guerra del Kuwait), ma è anche vero che non vivo su Nettuno. E quindi mi permetto di dire che questa storia dei tassi di interesse negativi sulle riserve libere detenute dalle banche presso la bce, associata alla storia sul cosiddetto Quantitative Easing, secondo me non viene discussa abbastanza nel nostro Paese.

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QE for Growth? Bullshit

A few years back a really small book attracted my attention because of its title. I know, that is the way it usually happens. But this one title was really special: On bullshit, by Harry G. Frankfurt, moral philosopher, Professor Emeritus of Philosophy at Princeton University (Princeton University press, 2003). Obviously, a must-buy, must-read, must try to understand. After all, it is not everyday that such an expression is used by a moral philosopher, let alone become the subject matter of a book. The opening lines of the book read as follows:

“One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted. Most people are rather confident of their ability to recognize bullshit and to avoid being taken in by it.”

Fast forward. In a recent post Simon Wren-Lewis, a colleague at Oxford, mentioned Professor Frankfurt and his work on bullshit. Now, before reading Professor Frankfurt, Emeritus at Princeton, I would have never thought of using such language myself. If in addition, however, Wren-Lewis uses the concept, I feel like I am free to use it myself: after all, if my majors do…

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