Warum Schulden zählen / Why Debt Matters

For an English version of this post, please click here.

Ein Gastbeitrag von Henry Kaspar

Mein Gastgeber Kantoos und ich diskutieren seit einiger Zeit – teils im Blog, teils per email – ob die Wirtschaftspolitik nur auf das Niveau der gesamtwirtschaftliche Nachfrage achten soll oder auch ihre Struktur, u.a. um Risiken wie Überschuldung privater Haushalte im Auge zu behalten (Kantoos‘ Position ist u.a. hier oder hier skizziert; meine hier). Dieser Artikel zeigt anhand der Entwicklung der U.S. Volkswirtschaft in den vergangenen 40 Jahren warum eine ausgeglichene Nachfragestruktur unabdingbar für stabiles und krisenfreies Wachstum ist.

In den 2000er Jahren explodierten die Schulden amerikanischer Haushalte: zwischen 2000 und 2007 wuchs ihre Schuldenquote – also Schulden relativ zum verfügbaren Einkommen – von 96 auf 135 Prozent. Ein gewisses Trendwachstum der Schuldenquote nicht ungewöhnlich, sofern den Schulden höhere Vermögenswerte gegenüberstehen (ein Prozess der oft „financial deepening“ genannt wird). Aber um das Jahr 2000 beschleunigte sich dieser Prozess plötzlich um das Fünffache. Nimmt man den Trend 1970-99 als Norm – eine Erhöhung der Schuldenquote von rund einem Prozent pro Jahr – waren amerikanische Haushalte Ende 2007 um 30 Prozent überschuldet (P.S.: alle Zahlen hier und im folgenden kommen von den Flow of Fund Statistics der Federal Reserve).

Was war passiert? In den späten 1990er Jahren hörten Amerikas Haushalte auf zu sparen. 1970-99 legten sie durchschnittlich knapp 3 Prozent ihres verfügbaren Einkommens zur Seite. 2005 sparten sie 2005 minus 3 Prozent: sie gaben mehr aus als sie verdienten. Der Einbruch der Haushaltsersparnis beschert den USA ein Rekord-Leistungsbilanzdefizit von mehr als 8 Prozent des Sozialprodukts 2006 – effektiv verschuldeten sich amerikanische Haushalte im Ausland (organisiert etwa durch den Verkauf verbriefter Hypothekendarlehen an ausländische Banken).

Verwies vor der Krise jemand auf diese Schuldenexplosion erhielt meist als Antwort das Nettovermögen amerikanischer Haushalte – also Bruttovermögen minus Schulden – sei so hoch wie nie zuvor, dank gestiegener Hauspreise. Die Schulden seien also voll und ganz gedeckt. Offenbar verleitete genau dieser Zusammenhang die Haushalte das Sparen aufzugeben: sie wurden ja ganz von allein immer reicher. Ein Zweitwagen kostete nicht mehr als den Gang zur Hausbank, um das Eigenheim mit einer weiteren Hypothek zu belasten.

Der Wohlstand war trügerisch. Ab 2006 zeigte sich dass die hohen Hauspreise nicht von Dauer waren, ähnlich wie zuvor schon die exorbitanten Aktienkurse Ende der 1990er Jahre im Zuges des dot.com-Booms. Die Assetblasen platzen, die Vermögenswerte fielen – aber die Schulden blieben. Als Ergebnis stand „Household Leverage“ – die Schulden der Haushalte relativ zu ihrem Bruttovermögen – 2009 mehr als 60 Prozent über der historischen Norm.

Ich habe wenig Zweifel dass die Finanzkrise hier – in der Überschuldung amerikanischer Haushalte – ihre eigentliche Ursache hat. Die Implosion des U.S. (und zum Teil auch europäischen) Finanzsystems war die unvermeidbare Folge sobald U.S. Haushalte – die immerhin rund 20 Prozent der weltweiten Sozialprodukts absorbieren – Schwierigkeiten bekamen ihre aus dem Ruder gelaufenen Schulden zu bedienen. Ebenso klar ist mir dass die Greenspan-Fed die Hauptschuld an der Krise trifft. Sie verlor nicht nur finanzielle Ungleichgewichte völlig aus den Augen, sondern züchtete auch noch jene Assetblasen, welche die Haushalte zum Schuldenaufbau provozierten.

[P.S.: ich sagte dergleichen lange vor der Krise, siehe hier einen Artikel aus dem Jahr 2004]

[P.P.S.: siehe hier für einen schönen Aufsatz, der den Zusammenhang zwischen Haushaltsüberschuldung und der Schärfe der Rezession auf der Ebene U.S.-amerikanischer Landkreise nachweist. Danke an Olaf Storbeck für den Hinweis]

Aber wichtiger als das Klären alter Schuldfragen ist was dies für die Wirtschaftspolitik heute bedeutet. Prominente amerikanische Blogger wie Scott Sumner – aber auch mein Gastgeber Kantoos – argumentieren die Federal Reserve müsse die gesamtwirtschaftliche Nachfrage zurück auf den Vorkrisentrend bringen, andernfalls versage sie. Aber: genau dieser Vorkrisentrend war unvereinbar mit stabilem Wachstum, denn er führte unausweichlich zu Überschuldung amerikanischer Haushalte, zu Überschuldung der U.S.-Volkswirtschaft insgesamt gegenüber dem Ausland, und damit direkt in die Krise.

Mit anderen Worten: vor der Krise war die heimische Nachfrage in den USA zu hoch (to be fair: Kantoos teilt letztere Einschätzung).

Ferner: der Nachfrageeinbruch in der Krise ist lediglich die Kehrseite der Erholung der Haushaltsparquote von ruinösen  minus 3 Prozent 2005 auf rund 4 Prozent heute. Wohlgemerkt: auch diese 4 Prozent liegen nur knapp über dem langfristigen Durchschnitt, und sind niedrig im internationalen Vergleich. Aber immerhin, die Normalisierung der Sparquote hat – zusammen mit Haushaltsbankrotten und dem Überwälzen von Schulden auf das Finanzsystem – die Verschuldung amerikanischer Haushalte 2010 auf 15 Prozent relativ zur historischen Norm abgebaut, nicht mehr 30 Prozent wie 2007. Stimmt mein Maß ist die Hälfte der Anpassung geschafft.

Was leider auch heisst: die andere Hälfte steht noch aus. Im Wesentlichen gibt es drei Optionen für die Bewältigung des verbleibenden Schuldenüberhangs:

  1. Mehr Haushaltsbankrotte, und damit die Re-Intensivierung der Finanzkrise;
  2. Inflation (eine Option nur deshalb weil die USA in Eigenwährung verschuldet ist – im Gegensatz zu den meisten Ländern der Welt);
  3. Eine längere Phase höherer Haushaltsersparnis, und damit geringerer heimischer Nachfrage (die nicht aufgefangen werden kann durch höhere Nachfrage anderswo in der US-Volkswirtschaft, nachdem jene insgesamt überschuldet ist).

Niemand will (1.). Für (2.) hätten Sumner oder Kantoos vielleicht eine gewisse Sympathie (sie plädieren für stetiges nominales Wirtschaftswachstum, dies kann man durch reales Wachstum ebenso erreichen wie durch Inflation) – aber der wirtschaftspolitische Konsens in den USA sieht anders aus, zumal weder die Fed noch die U.S. Treasury den Reservewährungsstatus des Dollar aufs Spiel setzen wollen.

Bleibt also (3.): mehr Haushaltsersparnis. Soll die U.S. Volkswirtschaft zu stabilem Wachstum zurückfinden führt an ihr kein Weg vorbei. In meinen Augen ist die Frage ist nicht ob die Bernanke-Fed diesen Anpassungsprozess zulassen soll – sie soll ihn zulassen. Die Frage ist lediglich wie sehr sie ihn abschwächen und verzögern soll. Das Dilemma: lässt die Fed dem Schuldenabbau freien Lauf verschärft sie die ohnehin schon schlimmste Rezession der Nachkriegszeit. Bremst sie aber zu stark oder stoppt gar die Anpassung verhindert sie die Rückkehr zu stabilem Wachstum.

Eine verwandten Punkt betont Raghuram Rajan häufig, seines Zeichens Finanzprofessor an der Universität Chicago und ein Ökonom, der vor der Krise ungewöhnliche Weitsicht bewies (der Punkt bringt Sumner auf die Palme, allerdings meiner Ansicht nach ohne ein überzeugendes Gegenargument): je länger die Nachfragestruktur verzerrt ist zugunsten heimischer Nachfrage, desto stärker passt sich die Angebotsstruktur der Volkswirtschaft an die Verzerrung an: Firmen die Exportgüter herstellen schliessen, und werden ersetzt von Firmen die heimische Konsumenten bedienen. Dies wiederum erschwert die Anpassung und macht sie noch kostspieliger. Rajan rät deshalb den Schuldenabbau des Privatsektors zu beschleunigen, und die sozialen Folgen abzuschwächen durch eine temporär expansive Fiskalpolitik.

Soll die U.S. Volkswirtschaft künftig stabil und krisenfrei wachsen muss die heimische Nachfrage schwächer sein als vor der Krise. Was bedeutet dies für die gesamtwirtschaftliche Nachfrage – und auf die kommt es Sumner und Kantoos ja letztlich an? Die Antwort ist: it depends. Gelingt es den notwendigen Rückgang heimischer Nachfrage durch externe Nachfrage – also Exporte – zu ersetzen, kann die gesamtwirtschaftliche Nachfrage zurück auf ihren Vorkrisentrend; allerdings mit veränderter Nachfragestruktur. Leider hängt dies nicht nur von der Federal Reserve ab, sondern auch davon ob Amerikas Handelspartner einen schwächeren Dollar zulassen, allen voran China. Tun sie dies nicht wird die U.S. Volkswirtschaft notgedrungen auf eine Periode schwächeren Wachstums einstellen müssen.


A guest post by Henry Kaspar

My host Kantoos and myself have been discussing for some time – partly here in the blog, partly via email – whether economic policy should focus only on the level  of aggregate demand or also on its structure, with a view to containing risks such as excess indebtedness of private households (Kantoos‘ position is sketched here or here; mine here). By reviewing the evolution of the U.S. economy in the past 40 years, this article argues that balanced structure of demand is critical for stable and crisis-free growth.

In the 2000s the debt level of American households went through the roof: between 2000 und 2007 the household debt ratio – i.e., debt relative to disposable income – increased from 96 to 135 percent (left chart below). Some trend increase in the debt ratio is not unusual, as long as debt is covered by an increase in the value of assets (process often called „financial deepening“). However, from about 2000 this process accelerated by a factor five. If one takes the trend 1970-99 as norm – an increase of the debt ratio by about one percent per year – at end-2007 American households were over-indebted by 30 percent (right chart below. Note: all figures here and in the following are taken from the Flow of Fund Statistics of the Federal Reserve).

What had happened? In the late 1990s American households stopped saving. While 1970-99 households put on average close to 3 Percent of their disposable income aside, in 2005 they saved minus 3 percent: households spent more than they earned (left chart below). The collapse in household saving triggered a record current account deficit of more than 8 percent of GDP in 2006 (right chart below). Thus, American households effectively indebted themselves abroad (organized, e.g., by the sale of securitized mortgages to foreign banks).

If prior to the crisis one pointed to this explosion of debt, the standard answer was that net worth of U.S. households – i.e., assets minus debt – was higher than ever, owing to a surge in house prices (left chart below). Thus, debts were fully covered. It seems that exactly this mechanism lured households into abandoning saving: they became richer automatically. A second car did not cost more than a visit at the local bank, to take up another mortgage on ones house.

However, the perception of wealth was trecherous. From 2006 it became clear that the high house prices would not last, similarly to the sensationally high stock valuations of the end-1990s in the wake of the dot.com-boom (middle chart below). The asset bubbles burst, valuations plummeted – but debt levels remained. As a result, in 2009 household leverage – i.e., household debt relativ to assets – was 60 percent above the historical norm (right chart below).

There is little doubt in my mind that excess indebtedness of American households is the real cause of the financial crisis. The meltdown of the U.S. (and partly of the European) financial system was unavoidable once U.S. households – that absorb 20 percent of global GDP after all – encountered difficulties in servicing their out-of-control debts. As clear is in my view that the Greenspan-Fed is chiefly responsible for the crisis. Not only did the Fed ignore financial imbalances, it also nourished the very asset bubbles that provoked households to accumulate excessive debts.

[P.S.: I said so long before the crisis, see here an article from 2004 (in German)]

[P.P.S.: see here for a nice article that provides strong empirical support for the link between household indebtedness and the severity of the recession at the level of U.S. counties. Thanks to Olaf Storbeck for the reference]

But more important than laying blame for bygones is what this implies for economic policy today. Prominent American Blogger like Scott Sumner – but also my host Kantoos – argue that the Federal Reserve should lift aggregate demand back to its pre-crisis trend, otherwise it would fail to live up to its job. However, this very pre-crisis trend was incompatible with sustainable growth: it led to excess indebtedness of American households, thus excess indebtedness of the U.S. economy abroad, and therefore directly into crisis.

In other words: before the crisis domestic demand in the U.S. was too high (to be fair: Kantoos agrees).

Moreover, the drop of demand in crisis is just the flipside of the recovery of the household savings ratio from a ruinous minus 3 percent in 2005 to about
4 percent today.
Importantly, even these 4 percent are only slightly above the long-term average and low in international comparison. However, this normalization of the savings ratio has – together with loan defaults that shifted debts to the financial system – supported a reduction in household indebtedness to 15 percent above the historical norm in 2010 from 30 percent in 200y. If my metric is correct, half of the adjustment has therefore played out.

Unfortunately this also means that the other half is still outstanding. There are essentially three options to eliminate the remaining debt overhang:

  1. more loan delinquencies, and therefore a re-intensification of the financial crisis;
  2. inflation (an option only because the U.S. is indebted in its own currency – in contrast to most countries on the globe);
  3. an extended period of elevated household savings, and therefore less domestic demand (that cannot be compensated by higher demand elsewhere within the U.S. economy, given that the economy as a whole is over-indebted).

Nobody wishes (1.). Sumner or Kantoos might sympathisze with (2.) to some degree (they advocate steady nominal growth, which can be achieved through real growth as much as inflation) – but the political consensus in the U.S. is different, in particular as neither the Fed nor the U.S. Treasury wish to put at risk the reserve currency function of the dollar.

Remains (3.): more household savings – indispensable if the U.S. economy is supposed to return to sustainable growth.  In my view the isse is not whether the Bernanke-Fed should allow adjustment to play out – it should. The issue is the extent to which it should mitigate and delay the adjustment. The dilemma: if the Fed allows debt reduction to proceed at an unfettered pace this worsens the already most drastic recession of the post-WW II era. If the Fed slows the process too much though or even stops it, this prevents the return to sustainable growth.

A related point is one that Raghuram Rajan keeps making – a professor for finance at Chicago University and an economist who displayed unusual far-sightedness before the crisis (Sumner finds that point maddening, but in my view without a convincing counterargument): the longer the structure of demand remains biased toward domestic demand, the more the supply structure of the economy adjusts to that bias. Firms producing tradeable goods shut down and get replaced by corporations servicing domestic demand . This  complicates adjustment and makes it even more costly. Rajan and others therefore advocate an acceleartion of private sector debt reduction, and to mitigate social consequences by means of a temporarily expansionary fiscal policy.

If the U.S. economy is supposed to grow sustainably and crisis-free going froward, domestic demand must be weaker than before the crisis. What does this imply for aggregate demand – which is what Sumner and Kantoos are ultimately interested in? The answer is: it depends. To the extent that the necessary reduction in domestic demand can be replaced by external demand – i.e., exports – aggregate demand can return to its pre-crisis trend; although with a different composition. Unfortunately this depends not only on the Fed, however, but also on whether America’s trading partners can be convinced to accept a weaker dollar, first and foremost China. If they cannot be convinced, the U.S. economy will have to adapt to a period of lower growth.

Kommentare

  1. Scott Sumner schreibt:

    It is wrong to claim that higher domestic saving implies less domestic demand, or even less private domestic demand. I favor fiscal and regulatory policy changes that mean less debt, more saving, and more investment. I am not critical of Rajan’s argument that debt is a problem in the US–I am critical of the view that monetary policy is the right tool to address that problem. A family doesn’t get out from under a big debt burden by going on vacation, and a country doesn’t escape that burden with high unemployment. Indeed it makes the debt burden even worse. The goal should be to work harder, but produce relatively more investment goods and exports, and relatively less consumption goods.

    BTW, no nominal GDP growth path is unstainable; we could achieve sustained nominal growth at Zimbabwean levels if we wished. Most economists would say that the question is what sort of growth path produces the best combination of real growth and inflation.

  2. matt_us schreibt:

    For a view why just chasing nominal growth through loose money has bad side effects:

    http://www.piie.com/realtime/?p=2104&utm_source=feedburner&utm_medium=%24{feed}&utm_campaign=Feed%3A+%24{update}+%28%24{PIIE+Update}%29

  3. Charles McSimilian schreibt:

    Gibt es denn eine Quelle für die den Grfaiken zu Grunde liegenden Daten?

    Mich würde in diesem Zusammenhang eine andere Ansicht, nämlich dei Entwicklung der ärmeren 95/99% interessieren?

    Wäre es denn eventuell möglich, durch eine andere Ausbalancierung der Besteuerungslast und damit ein Deleveraging jener ärmeren 95/99% die heimische Nachfrage nicht doch wieder auf Vorkrisenniveau heben kann?

  4. hkaspar schreibt:

    @ Scott

    Thanks for the comment. I am flattered that you took the time to respond.

    I guess the issue is the reference point one uses. If one uses as reference point a world in which China does not manipulate its exchange rate and the U.S. tax system does not discriminate against productive investments (one step in this direction would be to abolish interest deductability of mortgages), the Fed may be able to boost aggregate demand to pre-crisis levels without overstimulating consumption and provoking excess household indebtedness.

    In a world characterized by the actual constraints and distortions under which the Fed takes monetary policy decisions, however, the pre-crisis level of aggregate demand most likely comes with excess consumption. In my view the Fed cannot ignore these constraints but has to optimize under constraints, thus seeking a second best solution. Otherwise it risks that the outcome is neither first nor second best but catastrophic.

    (P.S.: no quibbles with that aggregate demand can be strong while household savings are high if exports/corporate investments are strong. I actually thought that this is what I wrote, at least with respect to exports).

    @ Matt_US

    Thanks for the link. I have several difficulties with the Aslund article.

    First, Aslund writes the output gap in advanced countries is an “illusion” — but why are wages and core prices then so muted?

    Second, it seems to me that capital outflows from the US to emerging economies is exactly what is needed to rebalance global growth — triggering inter alia stronger external demand for U.S. exports, and thus a more balanced U.S. growth pattern. I would consider QE etc. an unqualified success if it stimulates external demand, but highly doubtful if it simtulates consumption.

    Third, Aslund writes that excessively loose monetary policy can trigger financial instability. I agree, but one needs to be clear about the transmission mechanism: excess debt accumulation. If households and/or corporations accumulate too much debt, provoked by high asset prices, financial strains result when the asset bubbles deflate. But at this juncture, and in contrast to before the crisis, pivate sector debt levels are fallingin the U.S. and other advanced economies – not increasing. If so, monetary policy does not “overstimulate” (the only sector accumulating debt is the government, but this is not driven by monetary policy).

    Fourth, Aslund writes “if inflation targeting makes any sense it should focus on actual (headline) inflation”. Sounds good, but – why? The point of inflation targeting (or any other rule-based monetary policy regime) is to anchor expectations. If domestically generated prices (i.e., mostly wages) are stable, expectations are perfectly anchored.

    In my view the commodity price surge is a relative price surge that reflects the scarcity of commodities in a fast growing world economy. There is nothing wrong with this. Stabilizing headline because of the relative increase of an exogenous price would imply squeezing wage growth to very low or even negative levels — with intermittent unemployment — just to chase the statistical impact of a price set outside the economy (and thus outside of what the domestic central bank can influence). What for?

    @ Charles McSimilian

    Die Daten sind (wie im Artikel referiert und velinkt) von der Federal Reserve, Flow of Fund Statistics. Ich habe die Zahlen welche Sie interessieren nicht auf die Schnelle, vermute aber dass Ueberschuldung gerade im unteren Einkommensbereich haeufig ist — nicht umsonst startete die Finanzkrise als Subprime-Krise. Einkommensumverteilung mag bis zu einem gewissen Grad helfen, aendert aber nichts daran dass die U.S. Volkswirtschaft ingesamt ueberschuldet ist (siehe exzessives Leistungsbilanzdefizit).

    Gruss/Regards,
    HK

  5. Alex F. schreibt:

    @ Henry Kaspar

    Okay, we agree there is insufficient aggregate demand and that monetary policy can boost AD. And let’s say we although agree there is too much debt, in the sense of unsustainable debt. Now, why should this imply more investment demand and less consumption?

    Is it up to macroeconomics to decide the optimal amount of investment or consumption? Let’s say there are not enough investment opportunities, why should people be punished and stay unemployed instead of producing consumption goods? Without enough opportunities to invest in, the price for saving could be a negative real interest rate on safe assets. People have to choose; they can consume more or pay a price for saving (or invest into more risky business).

    Under these conditions (not enough save assets) more consumption wouldn’t imply unsustainable debt. Unsustainable debt is just the flip side of a bad monetary policy which keeps the return on savings above the market rate. With negative real interest rates you can go into debt and get rich :-) More serious, negative real interest rates alter the conditions of sustainability of debt.

    By the way, all I just said is boring (Greg Mankiw) textbook macroeconomics.

  6. Ludwig Büchner schreibt:

    @Alex F.
    this may be just plain standard text book macro, but what all the macro guys try to tell since months is balance mechanics: There is no way to increase exports and at the same time generate demand for consumption. And increasing export is, what all the mainstream economists are longing for. In the closed box view of actual economics there is only this one way out: Use all instruments available e.g. fiscal + monetary politics to get wages below inflation, better far below. Then this implicitly will force an economy to export . Market clearing wages (explicitly a lot lower wages, I think) will result in higher competitiveness and thus enhance exports so that consumption could remain suppressed without consequences. So far in a nutshell. In this regard HK post is completely flawless.
    On the other hand some of the mainstream thinkers actually find rising problems with this logic. E.g. Brad Delongs posts at Project Syndicat and also in the FTD this week. Not that I actually liked one of them, but BD proves, that he is uncomfortable with what we have. More and more theorists uncover structural problems with a globalized economy. With the resticted mindset (equilibrium, bazar markets, Tauschwirtschaft) it will get really hard to solve this mess. For the moment I’ll stick with Yoda: “think we must”

  7. Scott Sumner schreibt:

    Henry, I understand your point about exports and investment, but this is what I was responding too:

    “an extended period of elevated household savings, and therefore less domestic demand (that cannot be compensated by higher demand elsewhere within the U.S. economy, given that the economy as a whole is over-indebted).”

    Perhaps I misstated your views, but that was the quote I was thinking of.

    China does not really prevent the US from saving more and consuming less, just as it doesn’t prevent Germany from doing so. The main point of disagreement seems to be what should we do given the likelihood that the US will continue it’s pro-consumption anti-savings, fiscal policies in the near future. I say we should still aim for 5% trend NGDP growth, as that will at least reduce unemployment. Recall that high unemployment makes our over-indebtedness even worse through resulting big budget deficits.

    To me the choice is:

    1. Over-indebtedness and high employment
    2. Over-indebtedness and high unemployment.

    I don’t think slower NGDP growth can somehow erase the over-indebtedness problem indeed it will make it worse in real terms, or as a share of GDP.

    But at least we agree on the need for Americans to save more—many American economists pay lip-service to that, but are unwilling to support the tough fiscal policies necessary to make it happen.

  8. Alex F. schreibt:

    @ H.K.
    Sorry, I meant: “And let’s say we also agree there is too much debt…” and “safe asset”…

    @L. Büchner
    “And increasing export is, what all the mainstream economists are longing for.”

    But my point is that the central bank should do its job which is to boost AD to fight unemployment. Structural problems can be better solved without depressed AD. Brad DeLong is saying the same thing.

  9. Dietmar Tischer schreibt:

    Wenn ich verstehe, was hier verhandelt wird, ist die Kontroverse m.A.n. so auf den Punkt zu bringen:

    H.K:
    Unter den gegebenen Bedingungen („constraints“) ist zumindest kurzfristig eine NACHHALTIGE Gesamtnachfrage auf Vorkrisen-Niveau mit entsprechend akzeptabler Beschäftigung nicht zu erreichen (längerfristig bei STRUKTURELLEN Veränderungen aber durchaus).

    Scott Sumner:
    NGDP-Wachstum von 5% ist durch Fiskalpolitik anzustreben (durch Steuererhöhungen, was Zwangssparen der Privathaushalte ist, und – wie immer im Detail ausgestaltet – durch Investitionen bzw. Investitionsanreize), um die Arbeitslosigkeit zu vermindern – und das bei Inkaufnahme von Über-Verschuldung.

    Alex F.:
    NGDP-Wachstum und Abbau von Arbeitslosigkeit durch die Geldpolitik der Zentralbank (insbesondere durch real negative Zinsen), was – gewünscht – zu einer zunehmenden Verschuldung der Privathaushalte führt und zugleich die Bedingungen nachhaltiger Verschuldung ändern soll.

    Ist das richtig, stellt sich mir die Frage:

    Liegt H. K. richtig damit, dass nach Lage der Dinge NACHHALTIGES Wachstum nur über Entschuldung zu erreichen ist, oder haben Scott Sumner und Alex F. recht damit, dass Überschuldung kein Problem ist auf dem Weg zu NACHHALTIGEM Wachstum oder (falls das überinterpretiert sein sollte) zumindest kein Hindernis ist, um die Arbeitslosigkeit zu vermindern (mit welchen Risiken für nachhaltiges Wachstum und erneute Krisen auch immer)?

    Wenn die Frage richtig gestellt ist, sind die beiden Positionen widersprüchlich. Nur eine kann richtig sein, wenn auch Scott Sumner und Alex F. zu nachhaltigem Wachstum kommen bzw. zukünftige Risiken ausschließen wollen.

    Kann mir jemand erklären, ob und gegebenenfalls wie der Widerspruch aufzulösen ist?

  10. Alex F. schreibt:

    @Dietmar Tischer

    Nur eine Korrektur, Sumner ist ganz und gar nicht für Fiskalpolitik! Im Gegenteil, er ist der Champion der Geldpolitik, ich habe meine Ansichten von ihm. Sumners Ideal ist NGDP level targeting. Hier erklärt er seine Position: http://www.nationalreview.com/articles/255093/money-rules-scott-sumner?page=1

    Meine Position ist neben Sumner der von Greg Mankiw nahe. Natürlich sollte wer nicht kreditwürdig ist, keinen Kredit bekommen. Wenn man damit aufhört Banken zu retten, werden diese aus Eigeninteresse die Kreditvergabe strenger kontrollieren. Aber das ist nicht Aufgabe der Zentralbanken. Es ist auch nicht ihre Aufgabe über das richtige Verhältnis von Investition und Konsum zu spekulieren oder wie viel Verschuldung angemessen ist. Sparen und Investieren sind dann im Gleichgewicht, wenn die Zentralbank das Horten von Geld verhindert, d.h. den excess demand for money beseitigt. Manchmal impliziert das eben bei safe assets einen negativen Realzins. Es gibt kein Recht auf einen positiven Zinssatz für safe assets. Das entscheidet der Markt.
    Alles andere wäre rent-seeking. Eine Zentralbank, die Disinflation oder Deflation in Kauf nimmt, verschafft Geldhaltern eine politische Rente. Das ist genauso eine Umverteilung wie eine durch die Zentralbank herbeigeführte Inflation. Generell kann man sagen, dass es der Zentralbank darum gehen muss, die Inflationserwartungen stabil zu halten. Sie dürfen weder über- noch unterschritten werden.

  11. Alex F. schreibt:

    Man müsste noch etwas sagen zu dem Unterschied zwischen inflation targeting und NGDP targeting. Das ist wichtig. Bei Sumner verliert Inflation und auch Deflation zu Recht ihre Stellung als Richtwert der Geldpolitik.
    Habe bloß gerade keine Zeit…

  12. Dietmar Tischer schreibt:

    @ Axel F.

    Danke für den Hinweis.

    Tut mir leid, wenn ich Scott Sumner falsch interpretiert habe.

    Ich habe mich auf sein Statement „ … But at least we agree on the need for Americans to save more—many American economists pay lip-service to that, but are unwilling to support the tough fiscal policies necessary to make it happen” bezogen (16:11) und meine daher, dass er in der BESTEHENDEN Situation AUCH auf Fiskalpolitik setzt.

    Ist das so, würde er für die gegenwärtige Situation GRENZEN der Geldpolitik anerkennen.

    Diese sieht auch Brad DeLong zumindest für traditionelle Fed-Politik:

    >Also braucht Amerika momentan nicht nur eine Erholung der Nachfrage, sondern eine strukturelle Anpassung. Leider kann der Markt selbst keine schnelle Nachfrageerholung erzeugen. Und so lang diese nicht sichtbar ist, kann er auch keine strukturelle Anpassung hervorbringen.>

    http://www.ftd.de/politik/konjunktur/:top-oekonomen-j-bradford-de-long-die-fed-kann-ihren-zauberstab-nicht-einsetzen/60033494.html?page=2

    Wer also soll für eine höhere Sparquote und Investitionen sorgen, d.h. strukturelle Anpassungen in Gang setzen, wenn das die Privatwirtschaft nicht oder nicht hinreichend tut und die Geldpolitik ALLEIN es auch nicht kann?

    Der Staat kann das zweifellos indem er z. B. die Einkommenssteuer-Struktur ändert und Anreize für Investitionen setzt.

    An diesem Punkt muss man sich meiner Ansicht nach aber entscheiden:

    Entweder hat H. K. in seinem Beitrag nur etwas zusammengebastelt und seine Auffassung „ … genau dieser Vorkrisentrend (mit Geldpolitik die gesamtwirtschaftliche Nachfrage zu steigern, D.T.) war unvereinbar mit stabilem Wachstum, denn er führte unausweichlich zu Überschuldung amerikanischer Haushalte, zu Überschuldung der U.S.-Volkswirtschaft insgesamt gegenüber dem Ausland, und damit direkt in die Krise“ ist grottenfalsch.

    Hat er unrecht (was ich nicht sehe), d. h. ist STABILES Wachstum mit Überschuldung der U.S.-Volkswirtschaft insgesamt gegenüber dem Ausland möglich – was DAUERHAFT möglich heißt –, dann kann man mit Überschuldung weitermachen.

    Hat er recht, kann man nicht mit Überschuldung weitermachen, auch nicht mit Staatsüberschuldung.

    Der Frage kann man nicht ausweichen durch eine Debatte darüber, was Geld- und/oder Fiskalpolitik da oder dort bewirken können.

    Auch der Verweis darauf, dass die hohe Arbeitslosigkeit um jeden Preis bekämpft werden müsse, ist ein Ausweichen.

    Man kann durchaus dieser Auffassung sein, sollte dann aber auch eingestehen, dass NACHHALTIG stabiles Wachstum allenfalls zweitrangig ist.

  13. hkaspar schreibt:

    @ Alex F.

    Is it up to macroeconomics to decide the optimal amount of investment or consumption?

    I seem to have difficulties getting my point across. No, monetary policy can and should not decide about the optimal amount of investment or consumption. But monetary policy must not ignore excess indebtedness of households or corporations that result from excess consumption (see sub-prime) or investment (see dot.com). Otherwise monetary policy provokes financial crises.

    Unsustainable debt is just the flip side of a bad monetary policy which keeps the return on savings above the market rate.

    I guess you mean “below the market rate” (and with the latter you presumably mean something like the Wicksellian natural rate) (?)

    With negative real interest rates you can go into debt and get rich :-) More serious, negative real interest rates alter the conditions of sustainability of debt. By the way, all I just said is boring (Greg Mankiw) textbook macroeconomics.

    I know. If the equilibrium real interest rate is negative, and we can implement a monetary policy that overcomes zero-bounds like extraterrestrials overcome space and time and that drives actual real interest rates to wherever they clear the capital market, then households that go on a debt-fuelled consumption spree while becoming the less indebted. We enter the world of a sustainable Ponzi-game for the U.S. consumer.

    The flipside: Chinese Central Banks and German Landesbanken – ultimately the US households’ creditors – engage in an inverse Ponzi game. I.e., they voluntarily impoverish themselves by granting loans at a negative expected return and thus become the poorer the more they save.

    Surely it’s only the incompetence of the Fed that prevents such a scenario from materializing?

    I understand the argument, dear Axel F., and I admit that it is not only logically consistent but seductively beautiful if one is prepared to make a few leaps of faith. Such as ignoring the zero bound, assuming the entire world has a negative equiblirium rate (hence Chinese Central Banks and German Landesbanken find no more proitale investment oportunities than negative-rate U.S. consumer loans), or abstracting from things like risk and liquidity premia (that would drive household loans well into positive territory even if the real risk free rate is negative).

    My inbred lack of imagination prevents me from making these leaps, and hence I have difficulties considering this argument particularly relevant policy advice. Full confession: to me it seems a case of “if one has a hammer everything looks like a nail”, with us driving screws into the wall, and the screwdriver with it.

    @ Scott Sumner

    I agree with your crisp characterization of where we disagree, summarized in your sentence “I don’t think slower NGDP growth can somehow erase the over-indebtedness problem indeed it will make it worse in real terms”. I think the opposite – after all, both household indebtedness and overall indebtnedess of the U.S. economy have fallen in the past three years as debt-creating flows have dried up. Which, in turn, suggests to me that the choice is between fast growth (to the extent it can be engineered) and continued overindebtedness on the one hand, and slower growth combined due to lower consumption with a return sustainable debt levels on the other. At least unless a shift of demand from C to X and I can be engineered – which comes back to my key point that the structure of demand matters.

    Other quibble: “China does not really prevent the US from saving more and consuming less, just as it doesn’t prevent Germany from doing so” — China mostly fixes its currency against the U.S. dollar, if I am not mistaken, not the euro.

    @ Ludwig Buechner

    not sure I understand your criticism. I did not write about lower wages, rather about devaluation, which can be brought about much more effecitvely by a weaker currency. And I certainly did not write about “Tauschwirtschaft (exchange economy), but about savings, investment, debt, and credit. All things that go far beyond a pure exchange econmomy, and in my view are the nuts and bolts of capitalism.

    More generally, I suppose Scott Sumner and Anders Aslund (who Matt_US refered to) could both be called “mainstream economists”, but they come out at opposite ends about what U.S. monetary policy should do at this juncture – with Sumner thinking it should be much loser and Aslund thinking it should be much tighter. Thus, “mainstream economists” are hardly all longing for the same. To be honest I don’t know what exactly a “mainstream economist” is, or why that notion should be useful. I see value in distinguishing between good and bad economics, logically coherent and flawed economics, interesting and uninteresting economics, relevant and irrelevant economics; but not “mainstream” and “sidestream” or “offstream” (or whatever).

    Btw, I take issue with your statement that “there is no way to increase exports and at the same time generate demand for consumption.”. Lower interest rates tend to do excatly that. And, true, in the U.S. I would welcome stronger exports but not higher consumption at this juncture – but in China the inverse.

    @ Dietmar Tischer

    Wenn ich Sumner recht verstehe meint er Ueberschuldung sei unvermeidbar (u.a. aufgrund inhaerenter Verzerrungen durch das U.S. Steuersystem), die Frage sei ob sie mit hoeher Arbeitslosigkeit einhergehe oder nicht. Axel F. meint Ueberschuldung bei Vollbeschaeftigung sei vermeidbar da Realzinsen negativ sein koennen.

    Ich sehe das in der Tat anders als beide (und Sie geben meine Position korrekt wieder). Unter allen mir plausibel erscheindenden Umstaenden gibt es einen Trade-Off zwischen der Staerke heimischer Nachfrage und dem Niveau der Verschuldung des Privatsektors. Aufgabe der Fed und anderer Zentralbanken ist es diesen Trade-Off zu managen. Auch Fiskalpolitik hat eine Aufgabe, denn sie kann helfen den Nachfrageeinbruch, den der Abbau des privaten Schuldenueberschusses erzeugt, durch temporarer hoehere offentliche Nachfrage (und damit temporaer hoehere oeffentliche Schulden) abzumildern.

    Gruss,
    HK

  14. Alex F. schreibt:

    “The flipside: Chinese Central Banks and German Landesbanken – ultimately the US households’ creditors – engage in an inverse Ponzi game. I.e., they voluntarily impoverish themselves by granting loans at a negative expected return and become the poorer the more they save.”

    They are not forced to. But if they continue saving, a negative rate is the price the market wants them to pay. If you engineer a positve rate, you allow people to hoard which creates deflation or disinflation. Hoarding is not saving. Remember Nick Rowe: http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/10/the-paradox-of-thrift-vs-the-paradox-of-hoarding.html
    There is no right to hoarding. There is a right to save as much as you want, as long as you pay the market price. We believe in free markets, do we?

    In case of the zero bound, you know, I share your scepticism. But for me it’s all about the commitment problem. If they could commit, then they could go through walls :-) It’s nothing outlandish. And we all, Sumner and Kantoos included, know there is a big political problem. But that’s not a good reason to cave in.

    By the way, 5-year treasuries already were below zero: http://research.stlouisfed.org/fred2/series/DFII5?cid=82

    There is another point… I don’t know, but sometimes you sound like there is something immoral about a going below the zero bound. I don’t want to imply you think that, but a lot of people believe a zero rate is like working for free. That’s wrong. Getting your expected wage is like a zero rate. Working for free is a very high negative rate.

    Imagine you could own a worker. Or better, you were a slave and bought yourself free. You are an average worker and you will make 1,5 mill euro in your lifetime. There are costs, you have to feed yourself, medical cost… so let’s say when you start your working life your human capital is worth 1 mill. That’s what you have to pay to buy yourself. If you get unemployed (and there is no welfare state), you can’t feed yourself. Since your are young and have no savings, you will die in 2 months. This is a negative interest rate of -600% p.a. Even if you have a welfare state, you loose time and you get older. Just short times of un- or underemployment makes it impossible to get your invested 1 mill back, which is nothing else than a negative real interest rate.

    Risking a high negative rate for human capital, even a -100% rate (think about the cost of unemployment, depression, drugs, crime, homicide, suicide…), so that money capital can stay above the zero bound, that’s were I start to become a Marxist :-)

    Now, you don’t want that, you want fiscal policy. But even then why shouldn’t the state borrow at negative rates? What’s good about going deeper into debt?

    I think it’s always the same point. You seem to think that saving alone is something productive. I think that saving in equilibrium with investment is productive.
    I give Mankiw the last word:
    “In standard models of asset pricing, negative real interest rates are most likely to arise if growth expectations are particularly low or if uncertainty is particularly high. Low growth expectations encourage households to save, which drives down equilibrium rates of return. High uncertainty drives up risk premiums, which in turn drives down the return on safe assets, perhaps below zero. Both forces seem to be working now. ” http://gregmankiw.blogspot.com/2008/03/real-interest-rates-are-now-negative.html

  15. Ludwig Büchner schreibt:

    @hkaspar
    Sorry, I was not criticizing especially You. Au contraire, I had written that Your post is completely flawless. It’s just, that I have got the impression, that it does not help. I followed the dispute about wages – devaluation – disinflation in several other places and have a strong feeling that if one would look closer, the differenced might disappear.
    Concerning “barter economy”: This was the word that didn’t come to my mind when I wrote the comment. It had not been meant to be used against Your post, but instead there are some very important German economists that use it frequently.
    In a hurry.
    Ludwig

  16. hkaspar schreibt:

    @ Ludwig B:

    thanks for the clarifications.

    @ Alex F.

    as much as I like your comments, I reckon the debate would be more fruitful if you would focus on what I write, not on what you think or have a feeling or construe that I allegedly think. Hitting strawmen rarely advances a discussion. I know hoarding is not saving (from an economy-wide perpsective). I do not think saving per se is productive (and have no clue why you think I would think that) – hence there is no “point”, beware of “always the same”. I also do not think there is something “immoral” about going below the zero bound. And I find annoying that I have to repeat this – these are trivialities, no major insights.

    The key difference is: I don’t see how pushing real rates below the lower bound in a sustained manner is technically feasible, short of introducing Gsell’s Schwundgeld (and even then my gutfeeling is that people would find other stores of value). At or near the zero bound there is no transmission mechanism by which central banks can increase money supply: whatever they inject comes back as central bank balances or is being hoarded as cash. And as central banks that can’t credible liquify the economy, they can’t create inflation expectations (QE2 is no counterargument, as it manipulated longer-term rates that were still positive). “Committment” to something one has no means to bring about solves nothing.

    As a result, and as I wrote in another discussion, I believe fiscal policy is more efficient at the zero bound, as it boosts AD directly and can create physical shortages in goods markets (and, as long there is spare capacity, it comes nearly for free).

    A few more comments:

    – I would add a third set scenario to Mankiw’s when real equilibrium interest rates can be negative: excess indebtedness of liquidity constrainted households and corporations. Every penny that comes in is then used by debtors to repay creditors so as to restore the health of debtors’ balance sheets. Creditors have a higher propensity to save than debtors (this is why they are creditors), thus desired savings increase, possibly to a point where the market-clearing r is negative (one can also call this “excess demand for money”, although the mechanism behind it is rather different). Two years into the crisis debt overhangs seem the more plausible cause behind weak AD than excess demand for safe assets (the latter prevailed in late 2008/early 2009)

    – Mankiw’s point on risk premia is important for another reason: household loans are not safe assets. Thus, even if monetary policy were to succeed in pushing the real rate for safe assets into negative territory, mortgage or consumer loans may (and likely would) still carry a positive real rate. Meaning: the conditions for household debt sustainability would not change fundamentally.

    As for the policy response, in my view the natural reaction to risk and liquidity premia spiking in times of crisis is to contain premia (= making formerly safe assets safe again), through measures like guarantees and liqiuidty support — rather than to try making money unsafe (out comes the hammer in search for nails).

    – On China’s Central Bank and Germany’s Landesbanken: even if in the U.S. the market clearing real rate may have been negative during crisis, this is emphatically not the case in emerging economies. In these circumstances one would normally expect investors to redirect investments to parts of the world where they have a higher expected return, bringing about a weakening of the U.S. dollar, a boost to U.S. exports and stronger AD. If the weaker dollar wouldn’t be what large parts of the world are not prepared to accept, and rather buy low-return assets than let their currencies appreciate. From that persepctive, low return on safe U.S. assets is an artefact that results from distortive global exchange rate policies.

    Cheers,
    HK

    • kantoos schreibt:

      @ HK

      “At or near the zero bound there is no transmission mechanism by which central banks can increase money supply: whatever they inject comes back as central bank balances or is being hoarded as cash.”

      This is a much too static view on what central banks can do. Monetary policy is not about setting a short term interest rate. It is mostly about signalling the future path of monetary policy and the interest rate is its method of choice. In the longer run, interest rates will not be near zero so there is plenty of room left.

      And Alex F. was just politely guessing what you might think (or what others do think), he did not mean to offend or upset you.

  17. hkaspar schreibt:

    @ Kantoos

    I am not upset, but I also did not write that monetary policy is about setting the short-term rate. I wrote that at the zero bound central banks cannot create inflation expectations, as the latter requires credible means of injecting liquidity — which is precisely what they lack.

    Btw, how exactly are nominal interest rates not near-zero in the longer-term if the economy is stuck in a liquidity trap? Doesn’t this require inflation expectations — and if these existed the economy would not be stuck in the liquidity trap in the first place?

    In a nutshell: I buy into the logic of your and Axel’s views conditional on the ability of monetary policy to overcome the zero bound. But this “conditional on” is crucial — and I don’t see how you would have solved the issue.

    Cheers,
    HK

    • kantoos schreibt:

      @ HK

      Your views were a little unclear to me here, but you wrote about “liquitiy” and practical means of providing more, which to me seems to be a short term thing. Moreover, if all rates are at zero, but the inflation expectations are still not where they should be (which I think is unlikely, if not impossible), the central bank can buy other assets on the market, like MBS or corporate bonds, until markets realize that the central bank will continue until inflation expectations are where it wants them to be.

      But if you prefer to think in terms of interest rates (which I don’t), let me ask whether you think long term real rates can be zero at all (we will never be in a liquidity trap forever).

  18. Alex F. schreibt:

    @H.K.

    The same mindset which prohibits going below the zero bound will make fiscal policy difficult too. Just look what is happening all around us. The best outcome will be that we become like Japan. Neverending stagnation. I don’t want that.

    My problem is not fiscal policy per se. I wouldn’t want a quasi-fiscal policy of buying risky assets either. I was against QE1, the bailout. All I want is: a fair, fast and easy way to create inflation expectations to fight unemployment.

    Here is a fiscal policy I like: Friedmans helicopter drop – which is fiscal policy too, but doesn’t create more debt. In an ideal world you could do that as monetary policy, every eurozone citizen would have a deposit by the central bank and would get the same amount of fresh produced money till NGDP is on target. What’s not to like? An alternative for the real world would be a refundable(!) tax credit. Same effect. Everybody get’s showered in money.
    Now, please don’t tell me, that’s for political reasons not possible. I know that. All that matters in our discussion is: is it technically feasible? And it is.
    Now, if you could do that, it seems to me the commitment problem would be solved and you wouldn’t need to turn on the shower. That’s Kantoos point. People would get wet without water. Money is a social construction, it’s all just in the mind.

    So in the end, we have a mindset problem. This is what we have to fight. Like Leo in “Inception”. That’s what a blog like this should try to do. That’s why I’m talking so much about what people think is legitimate and what not. Because now most people think, that creating inflation expecations is like stealing. The truth is: hoarding is like stealing. You don’t have a right to a positive interest rate, you don’t have a right to safe assets, but you do have a right to a monetary policy which closes output gaps and targets full employment. Funny how Monetarism at the zero bound sounds like Marxism :-)

    Now, if you think we have structural problems, too much consumption, tax laws which give too much incentives to buy houses… all this should be discussed and fixed while we have full employment. (I prefer a site value tax and a higher consumption tax, less taxes on capital and labour.) What I’m against is the Austrian idea that poor people being unemployed somehow helps us to solve these problems.

    By the way, I don’t agree that easy money was the cause for the financial crisis. It was bad regulations. But more important, I don’t think the financial crisis was the cause for the recession. I’m a Sumnerian. Falling NGDP did it.

    A last point, you write: “The key difference is: I don’t see how pushing real rates below the lower bound in a sustained manner is technically feasible, short of introducing Gsell’s Schwundgeld (and even then my gutfeeling is that people would find other stores of value).”

    You can only hoard in the medium of account. Going into gold, just puts the hot potatoe in other hands… Going into another currency is no problem, it’s what we want. As long as you control the medium of account, there is no escape.

  19. Scott Sumner schreibt:

    Henry, I suppose I haven’t been following private debt closely. The government debt problem in Amerca has dramatically worsened with the slowdown in NGDP. Indeed net Federal debt is going to nearly double as a share of GDP, and state and local debt is also very troublesome. I suppose I was focusing on government debt, which is where I think the biggest problems lie.

    After the subprime bubble burst, it was inevitable that private debt would be trimmed back, but because of tougher lending standards more than falling NGDP.

  20. rubycon schreibt:

    @ Alex F

    “Money is a social construction, it’s all just in the mind.
    So in the end, we have a mindset problem. This is what we have to fight.

    You can only hoard in the medium of account.

    As long as you control the medium of account, there is no escape.”

    Das sind grundsätzliche Schlüsselerkenntnisse, der Anfang verknüpfter Wissenschaften (Geistes- und Natur-).

    These are basic keyenlightments, the beginning of linking natural and social sciences.

    Creating immortality im Antropozän:

    http://www.dradio.de/aod/?station=1&broadcast=445216&datum=20110410&playtime

    Zahlen zum Wohlfühlen nutzen.

  21. Dietmar Tischer schreibt:

    @ Axel F.

    Without distracting from the topic just a remark on

    >I don’t agree that easy money was the cause for the financial crisis. It was bad regulations.>

    This is like saying:

    Bad fire safety rules caused the fire.

    Obviously this is wrong.

    With respect to the financial crisis it is correct to say:

    Bad regulations or bad rules ALLOWED (did not prevent) the financial crises, but were not its cause.

    And:

    If obeyed to, good regulations or good rules would have PREVENTED the financial crises.

    One has to differentiate between a cause and the conditions for something to become or not to become a cause.

  22. Olaf Storbeck schreibt:

    Ein sehr interessanter Beitrag, dessen These ich weitgehend teile. Alleridings finde ich die empirischen Belege, die du liefertst, etwas schwach. Es gibt mindestens drei neuere, gut gemachte Studien, die harte empirische Evidenz dafür liefern, wie wichtig die Schulden für die Krise waren. Welche das sind, erkläre ich im Handelsblog: http://blog.handelsblatt.com/handelsblog/2011/04/11/die-crux-mit-den-schulden/

  23. Olaf Storbeck schreibt:

    here’s an English version of my comment:

    This is a very interesting post indeed. From my point of view Henry gets it (mostly) right. However, I think the empirical evidence he is giving as a support is rather weak. There are at least three different empirical papers which deliver sound empirical support for the claim that debt was one important trigger of the financial crisis. I briefly discuss them on “Economics Intelligence”: http://olafstorbeck.com/2011/04/11/why-debt-matter-some-real-empirical-evidence/

  24. Dietmar Tischer schreibt:

    @ Olaf Storbeck

    Danke für den Link, Ihr Beitrag ist sehr informativ.

    Insbesondere die Differenzierung zwischen Geldmenge und Kreditvolumen ist sehr be-achtenswert.

    Was den Beitrag von H. K. hier am Blog betrifft, will ich lediglich darauf verweisen, dass es ihm vorrangig um die Frage geht, ob die gesamtwirtschaftliche Nachfrage NACHHALTIG auf Vorkrisenniveau gebracht werden kann OHNE die Beachtung einer strukturellen Sonderheit wie Überschuldung, die unzweifelhaft das Vorkrisenniveau der gesamtwirtschaftlichen Nachfrage mitbestimmt hat.

    Das ist eine etwas andere Frage als die, ob die Verschuldung/Überschuldung (mit) krisenursächlich war, wiewohl natürlich beides zusammenhängt.

  25. Alex F. schreibt:

    @ D. Tischer

    “One has to differentiate between a cause and the conditions for something to become or not to become a cause.”

    Good point.

  26. matt_us schreibt:

    @Scott Sumner

    Just a little comment aside here; we got the US not being able to pay its debts, only just about able to vote on a postponement of not paying its soldiers or teachers or whatever – and you wake me up this morning (6:15) with some talk about how NGDP targeting would be a better policy for the Eurozone area.

    I guess it is not your fault, you are being interviewed by the UK’s main radio news program – the BBC Radio 4 Today program, but what the dickens is going on?

    Business news with Adam Shaw.
    Tue, 12 Apr 11

    Duration:
    13 mins

    Business news with Adam Shaw: Sales on the high street suffered their worst drop in 16 years last month. Stephen Robertson, director general of the British Retail Consortium, looks at why things have been so bad. The US economist, Scott Sumner, suggests the Bank of England should stop targeting inflation ahead of the publication of March figures today. And Alpesh Patel, founding principal of Praefinium Partners Ltd, looks at the markets.

    http://downloads.bbc.co.uk/podcasts/radio4/today/today_20110412-0625a.mp3

    This is the second time we have somebody interviewed in the morning, yesterday it was Kenneth “everybody but me needs a haircut” Rogoff, today it was Scott Sumner That ever so slightly winds me up – I am not a happy bunny when I get up. It kind of ruins my good night’s sleep, when I get up to hear American economists we should restructure euro debt, or make money even cheaper than it is at the moment – just to chase some NGDP targeting, which, as the US has shown, has so far not worked, with all the quantatative easing, still 14 Mio unemployed.

    As if America has all its debts under control and we should just do what their economists advice and everything will come up roses.

    I do not mind having your views on the subject here on this website, or some other obscure economic blogs – its for people who are interested in esoteric ideas and let’s discuss them, by all means. But why are the BBC putting that stuff out – early in the morning – on their main finance bulletin – I do not understand.

  27. Ludwig Büchner schreibt:

    @Henry Kaspar

    Sometimes I rush with the answer if an idea is nagging me for a while. This is what happened last Friday, when I wrote my comment to “Why debt matters”. Now I see that I had not clearly delivered, what was on my mind. I also have to admit, that I mixed Kantoos’ and Henry Kaspars positions because I’m still working to understand them.
    Since You corrected me very friendly and also made some important points, I try to think that over and post it again:
    What most of the major economists are proposing since some time now is, that due to the balance mechanics (also referred to as equilibrium) in a economy with over indebted consumers and thus suppressed consumption there is no way to generate demand for consumption and at the same time increase exports. And increasing export is, what many economists are thinking to be a valid solution.
    By using all instruments available e.g. fiscal + monetary politics to get wages below inflation, better far below, a depressed economy can be forced to higher competitiveness and so to export .
    Market clearing wages (explicitly a lot lower wages, I think) as a result will do the trick and enhance exports so that consumption could remain lower without deepening the crisis.
    I found one hint towards that direction here:
    http://kantooseconomics.com/2011/04/11/stiglitz-zu-irland/#comment-1894

    While this all seems to be basic textbook macro as Alex F. had written above I’m asking myself whether I have to accept it. In short: If a model is derived from actual research, can we conclude that changes in the model will also be valid, when transferred back to reality ? E.g. if the Irish and Greek will not export more then the well know sheep because all countries around also urgently want to export and try the same methods. Even the wealthiest.

    While thinking about that point, I found this amusing little article:
    http://www.scientificamerican.com/article.cfm?id=the-economist-has-no-clothes
    Ok, it asks more questions, than it answers.

  28. rubycon schreibt:

    “It is imperative that economists devise new theories that will take all the realities of our global system into account.”

    The Economist Has No Clothes
    Unscientific assumptions in economic theory are undermining efforts to solve environmental problems
    By Robert Nadeau | March 25, 2008

    Link von L. Büchner
    http://www.scientificamerican.com/article.cfm?id=the-economist-has-no-clothes

    That has to be alterated as good as possible.

  29. Ludwig Büchner schreibt:
  30. rubycon schreibt:

    Mercy beaucup :

    “Well-founded microeconomic theories concerning the efficiency of single markets were blown up and applied to all sectors of the macroeconomy, despite the fact that at an aggregate level many get rich by taking advantage of market failures, asymmetric information or political influence. The mathematization of modern economics, too, gave it the aura of a true science, the only one of the social sciences whose practitioners believe they stand in the same league as physicists. Ben Bernanke’s “great moderation” of the 2000s was in effect just the latest iteration of the mantra “this time is different.”

    aus dem Link Francis Fukuyama
    http://www.the-american-interest.com/article-bd.cfm?piece=906

    Every time is different!
    But this time will end the necon`s.
    It is time for good and real new economics based on microeconomic.

  31. hkaspar schreibt:

    Thanks to everybody for the many interesting comments, and apologies for not responding earlier. I have been travelling and unfortunately did not find the time.

    @ Axel F.

    Let’s focus on where we disagree. After all there is a lot we agree on, notably that there is a mindset problem: mindsets tend to be pro-cyclical, policies should be counter-cyclical. I am your ally when the issue is to fight mindsets that want to close the barn door after the horse has run away; i.e., wish to impose restrictive policies in recession that would have been appropriate five years earlier. Often these minds belong to the same folks who forgot all caution during the boom (but there are also “I told you so”-sayers that get carried away).

    1) In terms of theory we seem to disagree on policies to overcome the liquidity trap. To be honest, I am not sure how important this is in practice. However, for the sake of the argument, the only safe way to overcome liquidity traps I see (in the closed economy, in the open economy there are other options) is when the government spends directly and therefore creates shortages in goods markets, which in turn changes price dynamics. I agree that the cheapest and arguably most desirable way to fund this would be via central bank financing (the CB just hands over the cash that the government needs to pay its bills), but this is not critical. In the liquidity trap funding is cheap anyway. By contrast, tax credits etc. rely on the uncertain response of private absorption to changes in budget contraints. This is not much different from an expansionary monetary policy that relies on the uncertain response of private absorption to changes in portoflio composition. In the liquidity trap there is no guarantee that either will work: showering people with money when they consider money a savings vehicle may not trigger spending.

    [I sense that this disagreement points to a wider issue: the tendency of some quasi-monetarists to seek the solution for every macroeconomic issue in monetary policy. I suppose this comes from how quasi-monetarists frame the problem. Y * p = k * M -- so if Y is too low, increasing M looks like an obvious response. But, as I have written elsewhere, this is a non sequitur. Devising a policy to raise Y requires a structural model on how p, k and M react to that policy; there is no shortcut. And there is no a priori reason why monetary policy should be more succesful than non-monetary policies]

    2) As for practical policy, I disagree with the view that closing the output gap takes precedence over financial stability. If closing the output gap with a distorted structure of AD creates excess indebtedness – and therefore lays the ground for the next financial crisis – the output gap should not be closed. In fact the very concept of an “output gap” is misleading in such cases: with AD persistently distorted toward domestic consumption, the structure of supply is likely to be also distorted toward consumer goods. Hence “excess capacity” that allows producing consumer goods beyond what households can sustainably absorb is capacity that needs to be shed, not used.

    3) We also disagree on the role of monetary policy in laying the ground for the financial crisis, and on the importance of the financial crisis for the recession. It is monetary policy that overstimulated domestic demand – in particular consumption – prior to the crisis (no wonder when the central bank refinancing rate is below the nominal growth rate of the economy even during boom times – I sense that no regulation in the world could bring markets to reject such an invitation to a central bank funded Ponzi game). The result was excessive household debt, effectively owed to non-residents. This excessive household debt has to be paid down now, which is the key reason for the drop in AD and the recession. I would agree to your phrase “falling NGDP did it” only if there is an easy way of replacing household demand with corporate or external demand. I don’t think there is.

    The lenght of this commentary suggests that I should maybe write an article about quasi-monetarism: what I like about it, and where I find premises and conclusions difficult to share. If Kantoos’ legendary tolerance permits also that, of course.

    @ Kantoos

    In a liqudity trap buying “other assets” does not help either, all what happens is that the private sector hoards the money it receives from these asset sales. And if the private sector hoards money rather than spending it, there is no plausible way how this should give rise to inflation expectations.

    [besides, as Axel F. continues to point out, as soon as the central bank buys unsafe assets this is not pure moentary policy any longer, as the central bank assumes quasi-fiscal risks].

    What central banks can do when only short-term rates are near-zero is to manipulate longer-term rates that are not zero, but in this case the economy is not “truly” in a liquidity trap. This is the old Meltzer argument. It also underpins QE.

    @ Scott Sumner

    The government debt problem in Amerca has dramatically worsened with the slowdown in NGDP. Indeed net Federal debt is going to nearly double as a share of GDP, and state and local debt is also very troublesome. I suppose I was focusing on government debt, which is where I think the biggest problems lie. After the subprime bubble burst, it was inevitable that private debt would be trimmed back, but because of tougher lending standards more than falling NGDP.

    I agree. I would add that surging public debt is to some degree the flipside of falling private debt, with the fiscal authorities attempting to support demand during the recession.

    With the econmy emerging from recession, the #1 policy challenge is arguably to put U.S. fiscal policy back on a sustainable path.

    @ Dietmar Tischer

    Ganz meine Meinung. Mehr und bessere Regulierung und bessere haette die Schuldenkrise vielleicht verhindern koennen (ich zweifle auch daran), unzureichende Regulierung kann aber nicht ihre (kausale) Ursache sein.

    @ Storbeck

    Thank you for the informative links, especially the neat Mian/Sufi paper that is now incorporated in the post. I guess I did not link up to research papers because (i) the Flow-of-Fund figures speak for themselves (I don’t find them “weak” at all), but are not that widely kown, (ii) I sense that if I refer to other peoples’ papers and adopt their views as my own, I need to be willing and able to defend their line of reasoning and methods, which goes beyond of what I can reasonably do in a blog post, and relatedly (iii) in a debate it is important to formulate ones own points. But again thanks for these important complementary and supportive pieces of information.

    @ Ludwig Buechner/Rubycon

    I understand you want to make some fundamental point against academic economics, which is fine and legitimate. It just is not clear to me how this relates to the content of my article and the ensuing debate (which, for examle, is not mathematical at all, purely verbal and based on intutition and some data rather than formulae). If you have a specific point of criticism, I would be happy to try to address it.

    Regards to all,
    HK

  32. Ludwig Büchner schreibt:

    @HK
    I’ll make that short, here is a snippet of Your original post:
    “Gelingt es den notwendigen Rückgang heimischer Nachfrage durch externe Nachfrage – also Exporte – zu ersetzen, kann die gesamtwirtschaftliche Nachfrage zurück auf ihren Vorkrisentrend;”
    Seen from the US, this is the solution. We know that in Germany.
    Actually, almost all economies are trying to do this so, what if it goes wrong ?

  33. rubycon schreibt:

    @ kantoos

    Deine Stunde zur Bankenregulierung hat geschlagen.
    Die Verschuldung durch Rettung dieses Bankensystems durch staatliche Schuldenaufnahme muß durch mikroökonomischen Eigenkapitaldeckung angemessen ersetzt werden.

    http://www.taz.de/1/zukunft/wirtschaft/artikel/1/ackermann-ist-gefaehrlich/

    Dies gilt international aber besonders für Europa und Amerika.
    Es gibt keinen Ausweg aus diesen Spekulationsspielen mehr für die Handelnden.
    Das Zocken auf Zeit mit Einbindung der Politik läuft ab.
    Um die Realwirtschaft nicht zu schwächen, brauchen wir Investitionen in nachhaltige sich später wieder refinanzierende sinnvolle Nutzungen vor Ort.
    Empirisch einwandfrei belegt – let us try it.

  34. hkaspar schreibt:

    @ Ludwig Buechner

    I see where you are coming from. I for my part don’t think all economies should try to boost exports. Exports are costs, thus, ultimately there is only one plausbile reason why one would want to export: in order to be able to import.

    In my view stronger exports are needed for countries with a large external deficit (financed by debt accumulation) that need to put their external debt on a sustainabale path while avoiding a reduction in aggregate demand. An alternative, to some degree, are higher productive investments – they do not avoid the accumulation of debt (unless they are financed with equity), but match debt with the built-up of a productive capital stock that boosts repament capacity. This said, there are plentiful examples of investment booms gone wrong, for example the dot.com boom of the late 1990s/early 2000s.

    But stronger exports are no panacea. Countries with large external surpluses should arguably use their export earnings to absorb more – i.e., consume or invest. Otherwise they impoverish themselves unnecessarily. The question is why they don’t absorb more. In China it the government boosts exports with an artificicially low exchange rate, and at the same time organizes the capital export through reserves accumulation, apparently pursuing a strategy that puts employment above consumption. In Germany the issue is weak imports more than strong exports, relating mostly to weak investment. The challenge is therefore be to improve the investment climate to attract capital inflows. This, in fact, is what happened through much of the 2000s.

    Hope this helps,
    HK

  35. Ludwig Büchner schreibt:

    @HK
    Thanks, for Your time and explanations !
    We are pretty close in the things that should be, but I beg to differ on the observations about things that are.
    I did not have much time to translate and only can post my next question in Deutsch.

  36. Ludwig Büchner schreibt:

    @Henry Kaspar
    Es ist an der Zeit. Ich fand dieses Geplänkel erst ganz witzig, man kann Fragen stellen, ernsthafte Ökonomen antworten und es ist durchaus so, daß ich in den paar Wochen, die ich hier bei Kantoos reinschaue etliches für mich Neues gelernt habe. Ich bin kein Wissenschaftler und auch kein Ökonom, darum muß ich vieles was hier als Basis vorausgesetzt wird für mich erst zusammenreimen und mir ein eigenes Bild davon machen. Dabei haben mir schon viele Blogschreiber geholfen, denen ich auch ausdrücklich dankbar bin. Kantoos, Weissgarnix in D aber auch mehrer US Seiten gehören dazu, wie Barry Ritholtz. Jetzt bin ich aber an einer Stelle angekommen ( und dies scheint mir sehr wichtig) wo ich den Eindruck bekommen, daß die Ökonomen nicht weiter wissen. Noch mal das gleiche Zitat aus Ihrem Post Why debt matters: „Gelingt es den notwendigen Rückgang heimischer Nachfrage durch externe Nachfrage – also Exporte – zu ersetzen, kann die gesamtwirtschaftliche Nachfrage zurück auf ihren Vorkrisentrend;“

    Ja, mir ist aufgefallen, daß Sie in der deutschen Fassung “also Exporte” in der englischen Fassung “e.g. export” geschrieben haben.

    Zunächst die Frage: Wenn alle Staaten versuchen die aktuellen Nachfrageprobleme durch Stimulierung des Exports zu lösen und danach sieht es ja wirklich derzeit aus; wenn alle Ökonomien ungeachtet ihrer politischen Positionen und Möglichkeiten das gleiche versuchen, dann müssen notwendig einige scheitern. Ex post ist mMn icht zu sagen, welche das sein werden. Aufgrund der derzeitigen Erkenntnislage werden diejenigen denen das Scheitern droht wahrscheinlich versuchen mit den gleichen Rezepten eine noch bessere Wettbewerbsfähigkeit zu erlangen um dann vielleicht auf die Gewinnerseite zu wechseln. Was aber wird das Endresultat sein wenn es über mehrere Runden so läuft ?
    Ich habe dazu nun schon einige Ansätze gesehen, die aber alle im wesentlichen auf Ricardo, Say und Equilibrium aufsetzen, sei es nun MMT, Krugman oder Sinn. Im Grunde suchen alle nach einer Lösung für das gleiche Problem und kommen halt zu unterschiedlichen Lösungsansätzen.
    Was aber, wenn “gesamtwirtschaftliche Nachfrage zurück auf ihren Vorkrisentrend” gar nicht das Problem ist ?
    HK: Ich habe die Links zu den wirtschaftswissenschaftskritischen Beiträgen nicht eingestellt um irgendjemanden zu ärgern. Ich habe auch nichts gegen Mathematik oder gar Physik, die mir mein täglich Brot beschafft. Ich habe nur große Sorge, daß wir vielleicht an den falschen Stellen suchen. Die Probleme müssen mit den Ökonomen gelöst werden, die wir haben und dafür schätze ich auch gerade die, die sich der Diskussion aussetzen. Trotzdem bleiben Fragen offen und wir Amateure dürfen doch auch mal Hinweise auf andere Ansichten geben.

  37. hkaspar schreibt:

    @ Ludwig Buechner

    wer behauptet das Wohl einer Nation laege immer und ueberall in der Stimmulierung des Exports ist mAn ein schlechter Oekonom. Punkt. Das hat uebrigens nichts mit Mainstream vs. heterodoxe Ansaetze zu tun. Gerade Adam Smith und David Ricardo wussten dass Export Kosten sind und Import Nutzen.

    Zu Mathematisierung der VWL etc.: mAn bekommt man damit nur dann ein Problem wenn man unrealistische Erwartungen daran hat was oekonomische Modelle leisten koennen. Nie kann ein oekonmisches Modell die Realitaet getreu abbilden, wie das z.B. vielleicht in der Physik moeglich ist. Formalisierung leistet allerdings dreierlei: (i) es zwingt zu logischer Geschlossenheit, (ii) es zwingt die eigenen Annahmen offenzulegen, und (iii) es ermoeglicht (bei geeigneteter Formulierung) empirische Ueberpfruefung. Alles drei scheint mir wuenschenswert. Gute oekonomische Modelle arbeiten grob vereinfachte Grundstrukturen auf logisch konsistente Weise heraus, nicht mehr und nicht weniger.

    Zu orthodoxe vs. heterodoxe Ansaetze: mir ist leider immer noch nicht genau klar was Sie damit meinen. In der Diskussion hier z.B. sind sehr verschiedene Ansichten vertreten, von matt_US ueber mich und Tischer bis zu Kantoos und Axel F. Ich weiss nicht genau wer von uns heterodox und wer orthodox ist. Sofern wir alle orthodox sein sollten laesst die Orthodoxie allerdings ein weites Meinungsspektrum zu, nicht wahr?

    Gruss,
    HK

  38. Dietmar Tischer schreibt:

    @ Ludwig Büchner

    Eine Frage:

    Was erwarten Sie von der VWL?

    Wenn Sie Ihre Erwartungen bzw. Ansprüche kurz skizzieren und mit einigen bewertbaren Kriterien belegen würden, könnten wir vielleicht zu einigen Feststellungen kommen, warum sie was nicht oder noch nicht oder vielleicht überhaupt nicht leisten kann.

    Wäre das ein Ansatz, um die Klärung voranzutreiben?

  39. Ludwig Büchner schreibt:

    @Dietmar Tischer
    das ist eine interessante und berechtigte Frage. Wenn ich sie nur schlüssig beantworten könnte.
    Betrachten Sie es mal so:
    Die Erde ist eine Scheibe.
    Die Sonne dreht sich um die Erde.
    Vielleicht haben Sie die aktuelle (US-)Diskussion um die Haushaltsplanung und Schuldenreduzierung verfolgt. Dort geht es gerade um solch ein Thema, ganz gut, wenn auch mit ein wenig Bias zusammengefasst hier:
    http://www.ritholtz.com/blog/2011/04/strawman-alert/

    In der Physik hat es, zugegeben, Jahrhunderte gedauert bis sich soetwas wie Gesetze durchgesetzt haben. Von Galilei bis Newton um es verkürzt darzustellen. In der VWL scheinen mir aber noch nicht einmal Ansätze dafür vorhanden zu sein, auch nur ein kleinstes Fundament zu etablieren auf dem es lohnt zu streiten. Wie Henry Kaspar schreibt: “laesst die Orthodoxie allerdings ein weites Meinungsspektrum zu”.

    Warum passiert denn nicht ein wenig mehr in der Ökonomenzunft bei solchen Diskursen, wie dem von der Heritage Foundation ausgelösten.

    Warum kann man sich hier nicht einfach auf ein Nein einigen. Auf eine klare Aussage: Es ist nicht so !

  40. hkaspar schreibt:

    @ Ludwig Buechner

    Ihr Kommentar erinnert mich an Tolstoi: glueckichen Familien (Physiker) gleichen einander, unglueckliche Familien (Oekonomen) sind alle auf ihre eigene Art ungluecklich.

    Ich wuerde aber doch gern wissen: welcher Oekonmen behauptet (das Aequivalent zu) die Erde sei eine Scheibe? Und die Sonne drehe sich um die Erde? Und was genau “ist nicht” “so” (wie?)?

    Gruss,
    HK

  41. Cangrande schreibt:

    Ich komme vielleicht etwas spät zu dieser Debatte, will aber Interesse halber unbedingt auf den Artikel “Getting Traction In Your Vision” http://www.pimco.com/EN/Insights/Pages/FF_08_2001.aspx vom August 2001 von Paul A. McCulley (PIMCO) aufmerksam machen, der sozusagen die Immobilienblase für Alan Greenspan vorgeplant hat.

  42. rubycon schreibt:

    @ Cangrande

    “The margin debt that matters is not that on stocks, but on homes. And there will be no margin calls on homes, by god and by Greenspan. There will be no calls from mortgage brokers to homeowners seeking cash, only calls begging homeowners to take cash. This is America, don’t you know. ” aus dem McCulley Artikel

    That`s all.

    Den Menschen Träume verkaufen – hier nach dem eigenen Dach über dem Kopf.
    Die Karawane zieht weiter. Träume gibt es genug.

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