Quando o crescimento não chega

Este blogue tem andado parado, em parte por excesso de trabalho e em parte porque alguns segmentos do que fazia aqui foram deslocalizados para outras paragens (análise no Radar Económico e clipping de investigação na minha página do Scoop.it). Mas há coisas que merecem estar em mais do que uma plataforma. Como o discurso do Ben Bernanke no último Fórum de banqueiros centrais em Sintra: When growth is not enough

Regarding the United States, let me start with the positive. The nation’s cyclical recovery is entering its ninth year this month and appears to have room to run. Although the Great Recession was exceptionally deep and the recovery was slower than we would have liked, real GDP is now up about 12.5 percent from its pre-crisis peak, and real disposable income is up more than 13 percent (…)

And yet, despite the sustained cyclical upswing and the country’s fundamental strengths, Americans seem exceptionally dissatisfied with the economy, and indeed have been for some time. For example, those who tell pollsters that the country is “on the wrong track” consistently outnumber those who believe that America is moving “in the right direction” by about two to one. And, of course, last November Americans elected president a candidate with a dystopian view of the economy, who claimed that the “true” U.S. unemployment rate was 42 percent (…)

So why, despite the undoubted positives, are Americans so dissatisfied? The reasons are complex and not entirely economic. Without trying to be comprehensive, I’ll highlight here four worrying trends that help to explain the sour mood.

First, stagnant earnings for the median worker. Since 1979, real output per capita in the United States has expanded by a cumulative 80 percent, and yet during that time, median weekly earnings of full-time workers have grown by only about 7 percent in real terms. Moreover, what gains have occurred are attributable to higher wages and working hours for women. For male workers, real median weekly earnings have actually declined since 1979. In short, despite economic growth, the middle class is struggling to maintain its standard of living.

Second, declining economic and social mobility. One of the pillars of America’s selfimage is the idea of the American Dream, that anyone can rise to the top based on determination and hard work. However, upward economic mobility in the United States appears to have declined notably over the postwar period. For example, in a paper aptly entitled “The Fading American Dream,” Raj Chetty and coauthors studied one metric of upward mobility, the probability that a child would grow up to earn more than his or her parents. Using Census data, they found that 90 percent of Americans born in the 1940s would go on to earn more as adults than their parents did, but that only about 50 percent of those born in the 1980s would do so. Other research finds that the United States now has one of the lowest rates of intergenerational mobility among advanced economies, measured for example by the correlation between the earnings of parents and their children. For a supposedly classless society, the U.S. is doing a good job of rigidifying its class structure through means that include residential and educational segregation, social networking, and assortative mating.

The third adverse trend is the increasing social dysfunction associated with economically distressed areas and demographic groups. For example, other former Princeton colleagues of mine, Anne Case and Angus Deaton, have done important work on morbidity and mortality among white working-class Americans (more precisely, people with only a high school degree). They find that midlife mortality rates among white working-class Americans have sharply worsened, relative to other U.S. demographic groups and working-class Europeans. Case and Deaton refer to the excess mortality among the white working class as “deaths of despair,” because of the associated declines in indicators of economic and social well-being and the important role played by factors like opioid addiction, alcoholism, and suicide.  Indeed, in 2015, more Americans died of drug overdoses — about 60 percent of which involved opioids — than died from auto accidents and firearms-related accidents and crimes combined (…)

The fourth and final factor I’ll highlight, closely tied to the others, is political alienation and distrust of institutions, both public and private. In particular, Americans generally have little confidence in the ability of government, especially the federal government, to fairly represent their interests, let alone solve their problems. In a recent poll, only 20 percent of Americans said they trusted the government in Washington to do what is right “just about always” or “most of the time” (…).

I’m hardly the first to observe that Trump’s election sends an important message, which I’ve summarized this evening as: sometimes, growth is not enough. Healthy aggregate figures can disguise unhealthy underlying trends. Indeed, the dynamism of growing economies can involve the destruction of human and social capital as well as the creation of new markets, products, and processes. Unaided, well-functioning markets can of course play a crucial role in facilitating economic adjustment and redeploying resources, but in a world of imperfect capital markets and public goods problems there is no guarantee that investment in skills acquisition, immigration, or regional redevelopment will be optimal or equitable. Tax and transfer policies can help support those who are displaced, but the limits on such policies include not only traditional concerns like the disincentive effects of income-based transfers but also conflicts with social norms. Notably, people can accept temporary help but transfers that look like “handouts” are often viewed with extreme suspicion or resentment. Some active interventions thus seem a necessary part of a responsive policy mix.

Providing effective help to people and communities that have been displaced by economic change is essential, but, on the other hand, we should not understate how difficult it will be. Addressing problems like the declining prime-age participation rate or the opioid epidemic will require the careful and persistent application of evidence-based policies which populist politicians, with their impatience and distrust of experts, may have little ability to carry through. Moreover, to be both effective and politically legitimate, such policies need to involve considerable local input and cooperation across different levels of government as well as cooperation of the public and private sectors. The credibility of economists has been damaged by our insufficient attention, over the years, to the problems of economic adjustment and by our proclivity toward top-down, rather than bottom-up, policies. Nevertheless, as a profession we have expertise that can help make the policy response more effective, and I think we have a responsibility to contribute wherever we can.

Há ainda outra parte muito interessante, acerca de um tema a que tenho dado destaque neste blogue: a sensibilidade dos efeitos finais de reformas estruturais às circunstâncias macroeconómicas em que aquelas são implementadas. Esta questão devia ser mais do que apenas uma nota de rodapé no debate político europeu, onde há um combate silencioso em torno dos efeitos destas reformas e do melhor timing para as implementar. Que seja um americano a ter a coragem de discutir isto abertamente não deixa de ser uma curiosa ironia:

A small literature has argued that structural reforms can be counterproductive when interest rates are at the zero lower bound, because of disinflationary effects. I tend to agree that those ZLB effects are probably quantitatively modest. However, whether rates are at zero or not, it seems quite likely that policies that have the effect of releasing redundant labor resources could have adverse short-run effects if insufficient aggregate demand exists to re-employ those resources in a reasonable time. It’s consequently important for the content and sequencing of reforms to take into account the macroeconomic situation, as has been pointed out by the International Monetary Fund and others. Likewise, reforms can complement, but should not be viewed as a substitute for, appropriate macroeconomic policies. In particular, labor market reforms should not by themselves be expected to solve national competitiveness problems, at least not in the short term. Also needed are appropriate macroeconomic policies, especially fiscal policies, to help ensure adequate demand and remedy the underlying source of trade imbalances.

Anúncios

A regra de Taylor e a instabilidade financeira

Pode a política monetária causar bolhas de activos? John Taylor, o pai da regra de Taylor, acredita que sim, e tem defendido que foi o laxismo da Fed entre 2002 e 2005 que insuflou a bolha no sector imobiliário. As acusações geraram uma série de respostas na blogosfera americana, como Tony Yates e Paul Krugman. Desta vez, um peso pesado juntou-se à discussão: Ben Bernanke.

A primeira citação é de Bernanke, e incide sobre a crítica inicial de Taylor: a de que a regra de Taylor não foi seguida durante uma boa parte da década passada.

As you can see in the figure, the predictions of my updated Taylor rule (green line) and actual Fed policy (dashed black line) are generally quite close over the past two decades (the green line starts in 1996 because real-time data for the core PCE deflator are not available before then). In particular, it is no longer the case that the actual funds rate falls below the predictions of the rule in 2003-2005.

As for the period since the financial crisis, the modified Taylor rule in Figure 2 suggests that the “right” funds rate was quite negative, at least until very recently. If the Taylor rule predicts a sharply negative funds rate, which of course is not feasible, then it seems sensible for the FOMC to have done what it did: keep the funds rate close to zero (about as low as it can go) while looking for other tools (like purchases of securities) to achieve further monetary ease.

E a segunda é de Krugman, sobre um tema conexo, mas diferente: as implicações que uma mundivisão deste género teriam para a regulação bancária.

if it’s really that easy for monetary errors to endanger financial stability — if a deviation from perfection so small that it leaves no mark on the inflation rate is nonetheless enough to produce the second-worst financial crisis in history — this is an overwhelming argument for draconian bank regulation. Modest monetary mistakes will happen, so if you believe that these mistakes caused the global financial crisis you must surely believe that we need to do whatever it takes to make the system less fragile. Strange to say, however, I don’t seem to be hearing that from Taylor or anyone else in that camp.

Bernanke sobre a Alemanha

German wage hikes: a small step on the right direction, por Ben Bernanke. Infelizmente é curto, mas a ideia é a que tentei fazer aqui: o aumento da procura interna na Alemanha não é uma concessão que esta faz aos países periféricos, mas algo que faz sentido do seu próprio ponto de vista. Não há perda de emprego em favor dos PIGS, mas sim uma alteração das fontes desse crescimento. Pelo meio, ajuda-se a Grécia & companhia a reduzir a sua dívida externa, sem assumir perdas ou perdoar dívidas. É um win-win.

Allowing wages to rise is not a concession by Germany but rather part of what the country signed on to when it joined the euro zone. Germany has been insistent that the so-called peripheral countries increase their competitiveness through slower wages rises or even wage cuts. Wage increases in Germany are an equally important, and symmetrical, part of this necessary adjustment process. Moreover, this adjustment involves no German sacrifices. German firms, which will be slightly less cost-competitive, may export less but they will also see greater demand at home. German workers are unambiguously better off, receiving higher wages commensurate with their higher productivity.

The wage increases are steps in the right direction, but relatively small steps. More gains for German workers in the future would be both warranted and a win-win proposition for Germany and its trade partners.