Sunday, September 21, 2014

Paralelismos con 1937 by Robert J. Shiller - Project Syndicate

Paralelismos con 1937 by Robert J. Shiller - Project Syndicate

La depresión que siguió al desplome del mercado de valores en 1929 cobró un cariz peor ocho años después y la recuperación llegó sólo con el  enorme estímulo económico proporcionado por la segunda guerra mundial, conflicto que costó más de sesenta millones de vidas. Cuando por fin llegó la recuperación, gran parte de Europa y Asia estaba en ruinas.
Laactual situación mundial no es ni mucho menos tan espantosa, pero hay parelelismos, en particular con 1937. Ahora, como entonces, la decepciónde la población se ha prolongado durante mucho tiempo y muchos están desesperados. Están empezando a temer más por su futuro económico a largo plazo y semejantes temores pueden tener consecuencias graves.


Monday, September 15, 2014


How to jumpstart the Eurozone economy | vox

Francesco Giavazzi, Guido Tabellini 21 August 2014


What can be done to increase aggregate demand in the Eurozone? From a technical point of view, the answer is simple and has few

• All countries should enact a large tax cut, say corresponding to 5% of GDP.

• They should be given several years (say three or four), to reduce the budget deficit created by this tax cut, through a combination of higher growth and lower expenditures.

• To finance the additional deficits, members states should issue long-term public debt with a maturity of say 30 years.
This extra debt should all be bought by the ECB, without any corresponding sterilisation, and the interest on the debt should be returned to the ECB shareholders as seigniorage.

Combining a monetary and a fiscal expansion is key to the success of aggregate demand management, as shown by the recent experience of other advanced countries. Quantitative easing by itself would not do much to revive bank lending and private spending, because credit in Europe flows mostly via banks, rather than financial markets. And fiscal expansion without monetary easing would be almost impossible, because public debt in circulation is already too high in many countries. The combined monetary and fiscal expansion would stimulate aggregate demand both directly and indirectly, through a devalued exchange rate. The resulting temporarily higher inflation would be welcome, as it would reduce the debt overhang problem and it would facilitate achieving the ECB’s price stability goal.