After I wrote this I saw that Frances Coppola has a post that covers some of the same ground, but the point I want to make is different.


It is all very well observing that hope seems to have departed and people appear to have resigned themselves to a depressing, and depressed, future. But why are people so pessimistic? What – or who - has convinced people that government debt levels are unsustainable and there is significant pain to come? In a word, economists.
For the last thirty years, the economics profession as a whole has sung the praises of monetary policy run by independent central banks and denigrated or sidelined fiscal policy run by elected governments. Economic researchers have “proved” the following:
•runaway inflation is inevitable unless fiscal authorities are forced to operate within a monetary policy envelope set by the central bank (“monetary dominance”)
•short-term fiscal expansion is pointless because people will simply increase precautionary saving in expectation of higher taxes in the future (Barro-Ricardian equivalence)
•the state competes with the private sector for funding, so if it gets too large it absorbs funding needed by the private sector, preventing it from growing (“crowding out” theory)
•fiscal austerity can result in growth (“expansionary fiscal contraction”)
•if debt/gdp rises above 90% growth will come to a shuddering halt (Reinhart & Rogoff)
•both inflation and growth can be generated by the central bank without involving fiscal authorities (market monetarism)
Not one of these has been proven empirically. Some have even been shown NOT to be true, and others are failing to live up to the predictions of theory. But the beliefs live on. For example, in her speech at the Lindau opening ceremony, Chancellor Merkel of Germany made the following remark:
“The German experience shows that fiscal consolidation and growth are not incompatible”.
And she went on to suggest that there should be tougher sanctions for countries that broke the Maastricht treaty requirements of a deficit of no more than 3% of GDP and debt/gdp no higher than 60%. In a press briefing later that day Sims, apparently horrified by this, reinterpreted “sanctions” as “punishment”:
“I can't see that punishing countries for breaking the debt rules is helpful”, he said.
The economic beliefs that underlie financial pessimism have become deeply entrenched. However, it is encouraging to hear a world-renowned economist advocating fiscal expansion to restore growth. And he was not the only Nobel laureate at Lindau promoting a greater role for fiscal policy in the quest for recovery: others included Peter Diamond and Eric Maskin. Let's hope this new recognition of the vital importance of fiscal policy and the damaging effects of arbitrary fiscal constraints feeds through into real changes in economic policy-making.
希望が潰え、陰鬱で不振に陥った未来が来るという諦念の境地に人々が至っているかのような状況は、随所で観察される。しかしなぜ人々はそこまで悲観的なのか? 何、もしくは誰が、政府債務の水準は維持不可能で、非常な苦痛が到来することになる、と人々に確信させたのか? 一言で言えば、それは経済学者である。

  • 財政当局の運営が、中央銀行の設定した金融政策の枠組みの範囲内に制限されない限り、悪性インフレは不可避である。(「金融主導」)
  • 短期的な財政拡張策は意味が無い。というのは、人々は将来の増税を予想して予備的貯蓄を増やすだけに終わるからである。
  • 政府は資金調達において民間と競合関係にあるため、政府が大きくなり過ぎると民間が必要とする資金を吸い上げてしまい、その成長を妨げてしまう。(「クラウディングアウト」理論)
  • 財政緊縮策は成長をもたらし得る。(「拡張的財政収縮策」)
  • 債務GDP比率が90%を超えると、成長は恐ろしい停止を迎える。(ラインハート=ロゴフ)
  • インフレも成長も財政当局抜きで中央銀行だけで生み出せる。(市場マネタリズム


*1:cf. ここ