Economia
Não perder este post sobre em que Krugman comenta uma caixa do capítulo I do Economic Outrlook da OCDE sobre o efeito da inflação sobre a dívida pública (os negritos são meus):
"the report has a box dismissing the possibility that a higher inflation target, which has been advocated among others by Olivier Blanchard and even Greg Mankiw, could do any good. The report does some arithmetic on the likely reduction in public debt burdens, finding that a sustained increase in inflation by 2 percentage points would be required over a 10-year period to erode the average crisis-induced increase in the debt ratio in the OECD area which the OECD takes as evidence that inflation can’t be a useful response.
So, what’s wrong with this? I see at least three things wrong.
First, the report writes as if a period of 4 percent inflation rather than 2 percent inflation would be a terrible thing, highly disruptive to the economy.
Second — and this is technical but important — the OECD assumes that higher inflation would be reflected one-for-one in higher interest rates. This is a good assumption in normal times — but the whole reason we’re in such a mess is the fact that short-term rates are up against the zero lower bound, that is, that we’re in a liquidity trap. This means that short-term rates would not rise at all for some length of time if we had higher inflation, and that long rates, which reflect expected short rates, should rise less than one for one. In fact, that’s one of the main arguments for higher inflation when you’re facing a zero lower bound: it would reduce real interest rates. So the benefits for the public debt burden would be larger than the estimates suggest.
Third, public debt is not our only problem — in fact, it’s not the core problem. The key problem is, instead, the overhang of private debt. (...) And a period of modestly higher inflation would help reduce that private debt overhang, which would help promote economic recovery, which would in turn raise revenues and help the fiscal situation."
- Dívida Pública - Mapa Interativo
Our interactive graphic above shows the IMF's latest forecasts (updated in October 2012) for government gross debt as a percentage of GDP through to 2017. It also allows you to input your own long-term assumptions to project the likely path of debt...
- Repressão Financeira
Financial Repression Has Come Back to Stay: Carmen M. ReinhartAs they have before in the aftermath of financial crises or wars, governments and central banks are increasingly resorting to a form of “taxation” that helps liquidate the huge overhang...
- Dinâmica Da Dívida Pública
Debt dynamics The maths behind the madness The Economist online Our interactive guide to reducing government debtGOVERNMENT debt dynamics, once an esoteric subject of interest only to macroeconomists, are suddenly in vogue. With Greece...
- A Dinâmica Da Dívida Pública
Debt dynamics- The maths behind the madness-The Economist online GOVERNMENT debt dynamics, once an esoteric subject of interest only to macroeconomists, are suddenly in vogue... Veja aqui a mapa interativa da dívida pública There are two things that...
- Hiperinflação Usa
May 27 (Bloomberg) -- The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said. Prices may increase at rates “close to”...
Economia
Ler os Outros: Inflation and Debt (Wonkish) - Paul Krugman
Não perder este post sobre em que Krugman comenta uma caixa do capítulo I do Economic Outrlook da OCDE sobre o efeito da inflação sobre a dívida pública (os negritos são meus):
"the report has a box dismissing the possibility that a higher inflation target, which has been advocated among others by Olivier Blanchard and even Greg Mankiw, could do any good. The report does some arithmetic on the likely reduction in public debt burdens, finding that a sustained increase in inflation by 2 percentage points would be required over a 10-year period to erode the average crisis-induced increase in the debt ratio in the OECD area which the OECD takes as evidence that inflation can’t be a useful response.
So, what’s wrong with this? I see at least three things wrong.
First, the report writes as if a period of 4 percent inflation rather than 2 percent inflation would be a terrible thing, highly disruptive to the economy.
Second — and this is technical but important — the OECD assumes that higher inflation would be reflected one-for-one in higher interest rates. This is a good assumption in normal times — but the whole reason we’re in such a mess is the fact that short-term rates are up against the zero lower bound, that is, that we’re in a liquidity trap. This means that short-term rates would not rise at all for some length of time if we had higher inflation, and that long rates, which reflect expected short rates, should rise less than one for one. In fact, that’s one of the main arguments for higher inflation when you’re facing a zero lower bound: it would reduce real interest rates. So the benefits for the public debt burden would be larger than the estimates suggest.
Third, public debt is not our only problem — in fact, it’s not the core problem. The key problem is, instead, the overhang of private debt. (...) And a period of modestly higher inflation would help reduce that private debt overhang, which would help promote economic recovery, which would in turn raise revenues and help the fiscal situation."
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- Dívida Pública - Mapa Interativo
Our interactive graphic above shows the IMF's latest forecasts (updated in October 2012) for government gross debt as a percentage of GDP through to 2017. It also allows you to input your own long-term assumptions to project the likely path of debt...
- Repressão Financeira
Financial Repression Has Come Back to Stay: Carmen M. ReinhartAs they have before in the aftermath of financial crises or wars, governments and central banks are increasingly resorting to a form of “taxation” that helps liquidate the huge overhang...
- Dinâmica Da Dívida Pública
Debt dynamics The maths behind the madness The Economist online Our interactive guide to reducing government debtGOVERNMENT debt dynamics, once an esoteric subject of interest only to macroeconomists, are suddenly in vogue. With Greece...
- A Dinâmica Da Dívida Pública
Debt dynamics- The maths behind the madness-The Economist online GOVERNMENT debt dynamics, once an esoteric subject of interest only to macroeconomists, are suddenly in vogue... Veja aqui a mapa interativa da dívida pública There are two things that...
- Hiperinflação Usa
May 27 (Bloomberg) -- The U.S. economy will enter “hyperinflation” approaching the levels in Zimbabwe because the Federal Reserve will be reluctant to raise interest rates, investor Marc Faber said. Prices may increase at rates “close to”...