Willem Buiter: Eurozone crisis demands swift debt restructuring

Pessimista, chegou a fixar data para a implosão da zona do euro. Apesar disso, continua sendo um dos melhores macroeconomistas da atualidade. Vale a leitura.

Balance sheet obstacles to sustained demand growth mean the European Union faces two or three more years of recession and tepid cyclical recovery, even if EU policy makers enact the right measures as fast as their glacial decision-making process allows.
The balance sheet recession is caused by excessive leverage: zombie banks throughout the EU, excessive sovereign debt and deficits in the periphery, and excessive household indebtedness in many countries.
Unfortunately we cannot be sure that, even when the deleveraging process is complete and domestic demand expands again, there will be more than a cyclical recovery. For the growth rate of potential output to rise, deep structural supply-side reforms are needed.
The deleveraging will not come through growth, as growth will not return until deleveraging is completed. It will not come through inflation because the European Central Bank will not inflate. The debate between Spendarians and Austerians has little relevance as only Germany is in a position to provide a significant discretionary fiscal stimulus.
If countries under pressure to reduce their deficits wish to spread the pain of austerity over a longer period, they will either have to convince the markets to fund them or ask the troika of international lenders for additional concessional funding. For most countries, the level of austerity will be higher this year than last, but less than it would have been without the retreat by the European Commission and International Monetary Fund from their past support of excessively pro-cyclical austerity.
Another positive development is the elimination of Cyprus as a tax haven and the contribution this is making to the rapid elimination of bank secrecy in tax havens in or near the EU and in UK overseas territories. This creates new, less demand-destroying revenue opportunities through wealth levies, including tax amnesties that may prove valuable to countries like Italy.
The main instruments of deleveraging will be debt mutualisation and restructuring. Euro bonds will not be used, either to deal with the problem of legacy excessive sovereign debt or with the flow problem of funding future deficits in the periphery. This would require significant additional fiscal union, and there is little political support for this. Instead, there will be some limited ex-post mutualisation, as the outstanding debt of troika programme countries to their sovereign creditors is gradually converted into a zero-coupon perpetuity, promising to pay nothing forever.
There will also be some more mutualisation of sovereign debt and of bank losses when the ECB takes losses on its exposure to likely insolvent sovereigns and to likely insolvent banks that have offered substandard collateral. But this will not suffice to deleverage quickly.
In line with the agreement reached to manage the Cyprus crisis, the new template for bank resolution bails in the existing shareholders followed by all unsecured creditors, including if necessary the non-insured depositors. Domestic taxpayers are no longer subordinated to senior unsecured bank creditors. Once the single supervisory mechanism for eurozone banks comes into force, the European Stability Mechanism will be able to directly recapitalise banks. German proposals to delay this and to forbid it recapitalising banks with “legacy” capital needs are likely to be shelved after the German elections.
A directive for national bank recovery and resolution mechanisms for EU member states could be transposed into national laws by the time of the German elections. Although this falls short of a single European bank resolution regime, it will accelerate the recovery or resolution of EU zombie banks.
The ECB will soon start a euro-area Asset Quality Review that is likely to be conducted by independent experts, without excessive interference by captured national supervisors. By the end of this year, the informational and institutional toolkit to dezombify the euro area banking system could be in place.
Sovereign debt restructuring by bailing in private creditors will not remain confined to Greece. Cyprus, Portugal and Spain are also at risk. Even Italy’s sovereign creditors are threatened because of the seeming inability of its political institutions to deliver growth-enhancing structural reforms.
Early resolution is preferable to economically costly and politically unsustainable additional austerity and pointless concessional funding. The inherent disruption is minimised through early, co-ordinated and simultaneous debt restructuring of banks, households and sovereigns, of sufficient size to convince markets there will not be an early repeat of the exercise. Losses would be less than those created by further delay. Easy, really.

Willem Buiter is chief economist at Citigroup

Fonte: FT

The German model is not for export

É sempre muito difícil exportar um modelo econômico, mas ele pode servir como inspiração para implementação de medidas adaptadas as condições de cada país. Este me parece ser o caso da relação de alguns países da zona do euro com o modelo alemão. Há mais virtude do que vicios no modelo alemão, o problema é que Wolf está mais focado nos últimos. Seu pessimismo em relação ao projeto da zona de euro é,em parte, justificado, mas, por outro lado, o levou a fazer previsões equivocadas sob o fim eminente deste importante experimento em política e economia.


Germany is reshaping the European economy in its own image. It is using its position as the largest economy and dominant creditor country to turn members of the eurozone into small replicas of itself – and the eurozone as a whole into a bigger one. This strategy will fail.
The Berlin consensus is in favour of stability-oriented policies: monetary policy should aim at price stability in the medium term; fiscal policy should aim at a balanced budget and low public debt. No whiff of Keynesian macroeconomic stabilisation should be admitted: that is the way to perdition.
To make this approach work, Germany has used shifts in its external balance to stabilise the economy: a rising surplus when domestic demand is weak, and the reverse. Germany’s economy may seem too big to rely on a mechanism characteristic of small and open economies. It has managed to do so, however, by relying upon its superb export-oriented manufacturing and ability to curb real wages. In the 2000s, this combination allowed the country to regenerate the current account surplus lost during the post-unification boom of the 1990s. This, in turn, helped bring modest growth, despite feeble domestic demand.
For this approach to stabilisation to work well, a large export-oriented economy also needs buoyant external markets. The financial bubbles of the 2000s helped deliver this. Between 2000 and 2007, Germany’s current account balance moved from a deficit of 1.7 per cent of gross domestic product to a surplus of 7.5 per cent. Meanwhile, offsetting deficits emerged elsewhere in the eurozone. By 2007, the current account deficit was 15 per cent of GDP in Greece, 10 per cent in Portugal and Spain, and 5 per cent in Ireland.
The domestic-demand counterparts of the huge external deficits run in these countries were mostly credit-fuelled private spending. Then came the global financial crisis. Capital inflows halted and private spending collapsed, creating huge fiscal deficits. Harvard’s Carmen Reinhart and Kenneth Rogoff have shown that this was predictable. Between 2007 and 2009, the fiscal balance shifted from a surplus of 1.9 per cent of GDP to a deficit of 11.2 per cent in Spain, from a surplus of 0.1 per cent to a deficit of 13.9 per cent in Ireland, from a deficit of 3.2 per cent to one of 10.2 per cent in Portugal and from a deficit of 6.8 per cent to one of 15.6 per cent in Greece.
The mistaken consensus swiftly emerged, notably in Berlin, that this was a fiscal crisis. But that was to confuse symptoms with causes, except in the case of Greece. Yet, being deprived of access to the bond market or close to that plight, crisis-hit countries had to tighten, despite their deep recessions. Tighten they did. Between 2009 and 2012, according to the International Monetary Fund, the structural fiscal deficit shifted by 15.4 per cent of potential GDP in Greece, 5.1 per cent in Portugal, 4.4 per cent in Ireland, 3.8 per cent in Spain and 2.8 per cent in Italy. This combination of financial crises with fiscal tightening caused deep slumps: between the first quarter of 2008 and the fourth quarter of 2012, GDP fell 8.2 per cent in Portugal, 8.1 per cent in Italy, 6.5 per cent in Spain and 6.2 per cent in Ireland. So far, so grim.
Unfortunately, the eurozone’s healthier countries also hew tightly to the stability mantra. So they, too, tightened fiscal positions. The IMF forecasts that the eurozone’s cyclically adjusted fiscal deficit will shrink by 3.2 per cent of potential GDP between 2009 and 2013, to end up at just 1.1 per cent of GDP. The European Central Bank also continues to show next to no interest in spurring demand. Unsurprisingly, the eurozone economy is becalmed, with GDP at the same level in the fourth quarter of 2012 as it was in the third quarter of 2010.
Meanwhile, consumer price inflation is falling below the ECB’s 2 per cent target. Last week’s cut of a quarter of a percentage point in the intervention rate will make next to no difference. A big adverse shock risks turning low inflation into deflation. That would aggravate the pressure on countries in crisis. Even if deflation is avoided, the hope that they will grow their way out of their difficulties, via eurozone demand and internal rebalancing, is a fantasy, in the current macroeconomic context.
That leaves external adjustment. According to the IMF, France will be the only large eurozone member country to run a current account deficit this year. It forecasts that,
by 2018, every current eurozone member, except Finland, will be a net capital exporter. The eurozone as a whole is forecast to run a current account surplus of 2.5 per cent of GDP. Such reliance on balancing via external demand is what one would expect of a Germanic eurozone.
If one wants to understand how far the folly goes, one must study the European Commission’s work on macroeconomic imbalances. Its features are revealing. Thus, it takes a current account deficit of 4 per cent of GDP as a sign of imbalance. Yet, for surpluses, the criterion is 6 per cent. Is it an accident that this happens to be Germany’s? Above all, no account is taken of a country’s size in assessing its contribution to imbalances. In this way, Germany’s role is brushed out. Yet its surplus savings create huge difficulties when interest rates are close to zero. Its omission makes this analysis of “imbalances” close to indefensible.
The implications of the attempt to force the eurozone to mimic the path to adjustment taken by Germany in the 2000s are profound. For the eurozone it makes prolonged stagnation, particularly in the crisis-hit countries, highly likely. Moreover, if it starts to work, the euro is likely to move upwards, so increasing risks of deflation. Not least, the shift of the eurozone into surplus is a contractionary shock for the world economy. Who will be both able and willing to offset it?
The eurozone is not a small and open economy, but the second-largest in the world. It is too big and the external competitiveness of its weaker countries too frail to make big shifts in the external accounts a workable post-crisis strategy for economic adjustment and growth. The eurozone cannot hope to build a solid recovery on this, as Germany did in the buoyant 2000s. Once this is understood, the internal political pressures for a change in approach will surely become overwhelming.
Europe will not become a bigger Germany. It is foolish to believe it ever could. The eurozone will either achieve a better-balanced resolution of its difficulties or break up. Which of the two will it be? That remains the big unanswered question.

Martin Wolf

Fonte: FT

Bresser Pereira: Qual Poder é preciso defender?

Meu mestre, Bresser Pereira, ultimamente, anda inspirado e sem papas na lingua.

As democracias se caracterizam pelo equilíbrio de Poderes, mas isso não significa que os três tenham a mesma importância. O Legislativo é o Poder democrático por excelência, e cabe a ele a palavra final em todas as questões, através das emendas. Entretanto, o que vemos no Brasil é o Judiciário -- Poder burocrático por excelência -- tentar assumir essa posição, o que é inaceitável do ponto de vista da democracia.

O equilíbrio de Poderes, ou "checks and balances", é a tese através da qual filósofos liberais do século 18 buscaram limitar o Executivo, o monarca absoluto. Mas, além disso, é uma tese que visou limitar o Parlamento -- reflexo da oposição do liberalismo à democracia no século 19 a partir do argumento de evitar a "ditadura da maioria".

Há tempos esse argumento, que servia para a burguesia rejeitar o sufrágio universal, mostrou-se equivocado. A maioria alcançada em alguns momentos por sociais-democratas que representavam os trabalhadores jamais buscou exercer a ditadura quando ganhou eleições.

Mas o medo da democracia continua a assombrar liberais, que, apesar da crítica ao Estado e à sua burocracia, sempre buscam transferir poderes; do Executivo para agências burocráticas supostamente "independentes"; e do Legislativo para o Supremo Tribunal Federal.

Ao julgar a constitucionalidade das leis e interpretar os dispositivos da Constituição que não são claros, o Poder Judiciário exerce um papel que lhe é próprio. Mas o que estamos vendo é algum dos ministros usarem o "clima favorável" criado por um liberalismo antidemocrático ainda dominante para se impor sobre o Parlamento. Vimos dois movimentos recentes nessa direção.

Primeiro, o Supremo não hesitou em interferir na ordem em que os projetos de lei são votados, exigindo que venham primeiro as medidas provisórias. Agora, um ministro concedeu liminar para impedir que continue a ser discutido no Senado projeto de lei que inibe a criação de partidos políticos. Usou como justificativa o fato de que o projeto estaria sendo aprovado "de afogadilho".

O Brasil tem um bom Judiciário, um Poder meritocrático formado por magistrados de elite. Já o Congresso está permanentemente nas manchetes, porque é constituído de um número grande e heterogêneo de parlamentares e reflete qualidades e defeitos da sociedade brasileira.

Mas não é razoável que, por essa diferença de constituição, a sociedade se deixe convencer por um liberalismo que manifesta preferência pelo Poder Judiciário e desgosto com a política e a democracia.

O Congresso aprovou na Comissão de Justiça da Câmara emenda constitucional que exige maioria de quatro quintos para o Supremo declarar leis inconstitucionais -- algo discutível, mas razoável. Creio ser justo que esteja clara para o Supremo a inconstitucionalidade de uma lei já duramente discutida.

Receio que alguns ministros do Supremo estejam se inspirando na Suprema Corte dos Estados Unidos, mas lá seus membros não têm alternativa, já que a Constituição se tornou uma espécie de tabu, e o Congresso perdeu capacidade prática de emendá-la. No Brasil não é assim. Devemos saudar as tentativas para contornar a crise entre os dois Poderes, mas sem perder de vista que, se há um que precisa ser defendido (e sempre criticado), este é o Legislativo. Os outros dois não estão ameaçados.


Luiz Carlos Bresser-Pereira

Fonte: FSP

A Burke for our time

Resenha da nova biografia de um grande conservador ainda pouco conhecido no Brasil: Edmund Burke: The First Conservative, by Jesse Norman; Basic Books, 336 pages, $27.99. Não sei se sou conservador, mas confesso que os que se denominam como tal no grande bananão ficam muito a desejar em comparação à velha guarda do mundo anglo-americano


A Burkean event took place in New Haven not long ago when two distinguished leaders at Yale proposed to the Proprietors of the Grove Street Cemetery, before a standing-room-only crowd of townspeople, that to tear down the cemetery wall would “create an inviting and open atmosphere” for passersby.

The cemetery is the oldest municipally incorporated burial ground in the country, older than Père-Lachaise in Paris. Eli Whitney, Noah Webster, Roger Sherman, and Samuel F. B. Morse lie there along with African-American Civil War veterans. The entrance gate and wall erected in the 1840s is a unique expression of the neo-Egyptian architectural style of the time. A headstone on an empty gravesite salutes the memory of Glenn Miller, the trombonist and band leader whose plane disappeared over the English Channel during World War II; he had formed his 418th Army Air Force band at Yale.

The debate was civil and moderate in tone, but stark. It became a male versus female issue. The women of the town prevailed. Their argument was, in essence: “Who are we to do such a thing as against all those generations in the past, and those yet to be born?” It was a Burkean moment, although no one at the time seemed to recognize it as such.

For Edmund Burke, the eighteenth-century Irish statesman who served in the British House of Commons, the hallmark of a sane society is reconciliation of the present and the future to the past. We live our lives in the present, with time always progressing forward in a linear direction, so Burke’s respect for the past makes him conservative. Given the modern world’s appetite for change, Burke’s emphasis on continuity and permanence makes him seem like a strange outsider. Furthermore, Burke’s conservatism is expressed in a fierce and fiery, almost reactionary, style.

This puzzled his detractors, who were constantly suspecting Burke of some ulterior motive, of exerting some nefarious influence in the cause of some hidden agenda. The Duke of Newcastle said, “Burke’s real name is O’Bourke, a wild Irishman, a Jacobite, a papist, a concealed Jesuit.” At best, but equally threatening to the state, Burke was an eighteenth-century Socrates, a dangerous gadfly, challenging the settled assumptions of Britain. The portrayal of Burke in Boswell’s Life of Johnson avoids quoting the statesman directly, and sometimes disguises the identity of the “Burkean” speaker, as if to conceal Burke from the authorities. If this was a conservative, it was a strange conservative indeed. Moreover, Burke took contrarian positions on world issues, positions his critics found difficult to reconcile: religious liberty for Ireland, independence for America, justice and respect for India’s traditions, and to hell with the French Revolution.

Indeed, Burke presented a formidable challenge to friend and foe: a great intellect, a stunning orator, propelled by an intense inner energy that was hard to take. Burke seemed to concentrate all his capabilities in the immediate moment. If you found yourself conversing with Burke, it was said, you felt as if you were being “grazed by a powerful machine.” Samuel Johnson, who yielded to no one in considering himself a great man, repeatedly praised Burke as a great man. If Burke should drop in at a blacksmith’s shop to have his horse shod, Johnson said, the blacksmith would say, “We have had an extraordinary man here.” Even to the domineering Johnson, Burke was an intimidating presence: “His stream of mind is perpetual.” Once, when Johnson was feeling poorly, he said, “That fellow [Burke] calls forth all my powers. Were I to see Burke now, it would kill me.”

Not since Cicero had a major political thinker been a practicing politician in the center of the arena. So it is refreshingly welcome to have Burke reassessed today by another politician, Jesse Norman, Member of Parliament for Hereford and South Herefordshire who has taught philosophy at University College London.

Edmund Burke: The First Conservative is not a standard biography.1 Norman has set his book in two parts. Part One, “Life,” is a lively review of Burke’s political career from his “outsider” origins to his entanglement in the causes of Ireland, America, India, and France. How those controversies generated his ideas is largely left to Part Two of the book, “Thought.”

Norman locates Burke in many ways as an Enlightenment figure. By the same token, Burke was presciently aware that Enlightenment ideas could produce deep social pathologies as prescribed by, in Burke’s words, “the perverse and paradoxical genius of Rousseau.” This position enabled Burke, the author argues, to become “the hinge or pivot of political modernity,” the first and greatest critic of the modern age, and the earliest postmodern political thinker. The great paradox is that “Burke the anti-radical becomes a far more radical thinker than Karl Marx himself.”

Norman analyzes Burke’s ideas, although they resist brief summary, through a coherent four-part framework: the social self, the political party, the individual, and human values.

First, there is the social self. Unlike Hobbes, Locke, and Rousseau, Burke does not begin with the state of nature. Rather, he takes as given the reality of human society itself, which is where most of our humanity is derived from. Norman misreads Burke in asserting that “for Burke, there can be no such thing as the state of nature”; in fact, Burke says that we are in the state of nature: the society we have evolved into naturally over time, with liberty as the result of a well-ordered society.

For Burke, the social order is, in the broadest sense, what constitutes a nation. The concept of nationhood as social order is one reason why Burke “is instantly able to see France as a country which has, in effect, forgotten itself.” Burke’s “whole philosophy stands as a reproof,” Norman writes, “to the revolutionary rationalism inspired by Rousseau.”

Second, Norman turns to Burke’s insight that properly functioning political parties are the essence of mature governance. Through them, ideologies clash. Burke never seems to have contemplated the idea of parties as mass-membership organizations campaigning across a nation, but it is Burke who first famously defined the modern conception of a political party as “a body of men united for promoting for their joint endeavors the national interest, upon some particular principle in which they are all agreed.” Parties, in Burke’s view, bring stability to politics, give focus to national purpose, moderate government, give ordinary people a part to play, and provide testing grounds for political ideas. Burke stresses that the responsibility of a Member of Parliament is to exercise mature judgment, not simply carry out the wishes of his constituents. In all this, Burke developed what is, or should be, the fundamental conception of a modern representative political party.

Third, Norman focuses on the Enlightenment idea that the human individual is the basic unit of moral, political, and economic accounting. Thus, individual freedoms are paramount. To Norman, “liberal individualism” is today pervasive across most areas of human life, including education, race, health, religion, human rights, trade, development, and migration. From a Burkean perspective, Norman says, liberal individualism has its own points of weakness. For Burke, there is little meaning in the idea of people as individuals apart from society. If individuals artificially separate themselves from society, liberty becomes license; individualism produces self-indulgence. All this, Norman says, has brought a succession of recent disasters and a kind of moral panic about Western society itself: drug use, loneliness, suicide, divorce, single motherhood and teenage pregnancy, and fears of a loss of local or national identity—all in a spreading belief that basic values of respect, hard work, and public service are being lost in celebrity worship, consumerism, and the money culture—all because of the rise of liberal individualism.

Finally, Norman finds hope in the extent to which the modern world is now rediscovering Burke’s wisdom through research findings in the social sciences. In the conclusion of his book, a chapter titled “The Recovery of Value,” Norman refers to recent research that supports Burke’s central themes: that humans have a distinctive social nature; that emotions guide reason, which itself is limited and fallible; that allegiance and identity are grounded in institutions which are the source of human well-being; that absolute freedom or “license” is disastrous for the person and for society; and that what matters most is for humans to live together according to shared rules and norms in a moral community. Norman concludes, “It is striking how much evidence has emerged in recent years for the basically social nature of humans,” as behavioral economics has, in particular, undermined the long-standing picture of man as “homo economicus.” Equally striking are anthropological studies showing that religions, far from being viruses or parasites, as the New Atheists assert, “are likely to have had evolutionary advantages for their members.”

While recognizing that Burke’s persona, like Walt Whitman’s, contains multitudes, Norman boldly summarizes Burke’s thought for our time. Any such effort, however, is fundamentally un-Burkean. There is no catching Leviathan with a hook. Burke’s writing and speaking—style and substance—are all of a piece, coming together organically. His 1790 masterpiece Reflections on the Revolution in France is clear, but stubbornly resistant to summation. There are no chapters or subheadings, no table of contents, no index. When the luminous intellectual historian Frank Turner edited a new edition of Burke in 2003, he was determined to produce an index. It was, Turner told me, “the damndest fool’s errand I ever set myself.” When he had finally completed it, he found that the first item he looked up in the index had not been included. To grasp the full force of Burke’s ideas, one must read through his entire oeuvre, without assistance.

More problematic is Norman’s interpretation of what it takes to bring Burke’s ideas to life in our time. Each of his four main “Burkean” chapters seem to intensify some of the worst aspects of the situation today.

Burke is correct that we humans are social beings, and Norman puts stress on the larger national social order. In the United States, a distinctively American character and order was devastated by the politico-cultural degradations of the Sixties. Since then, the government has happily moved into the role of supreme social-orderer in a way that ignores or spurns the deeply traditional institutions and allegiances Burke championed. Norman’s argument seems to deliver Burke bound and gagged to an overbearing state, which has eagerly moved into the vacuum left by the cultural elite’s eradication of traditional American society.

Burke’s advocacy for the political party may well be, as Norman argues, “the hinge of Anglo-American, and indeed the world’s political modernity,” with the two “big tent” political parties serving the cause of consolidating power in the United States within a political system otherwise designed by the Founders to disaggregate political sources of leverage. But this Burkean contribution, bundled inside Norman’s summation, suggests that one’s political party can be Burke’s “little platoon,” deserving deep allegiance as the foundation of social order—and this in the new twenty-first century, when the primary feature of representative government is, contrary to Burke’s precept, the politician’s fear of exercising mature judgment, slavishly following his constituency’s shifting moods.

This reality is moving our current politics ever more toward the direct democracy that brought down Athens and which led Burke to howl that “a perfect democracy where popular authority is absolute and unrestrained is therefore the most shameless thing in the world.” The same insight led the American Founders to protect their country, in its design, from the dangers of direct democracy.

In gathering Burke’s thoughts, Norman sets the statesman in opposition to the modern creed of individualism. To Norman, individualism cannot but produce self-indulgence; there is no possibility for George Washington’s view that a free society requires individuals capable of exercising the virtues of self-restraint, or Emerson’s declaration of the importance of self-reliance. Indeed, individual liberties are an inextricable part of the American national character. That tradition, in this telling, could be interpreted as impossibly wrong from the start, and now out of control. Most bizarrely, this view could link Burke to governmental policies aimed at entrenching a collective, anti-individualistic culture.

Norman’s summation of Burke’s thought, useful as it is for providing some core Burkean insights in an accessible manner, is too beholden to current governmental proclivities. How, then, do we approach Burke’s thought unless we go at it as did Gladstone, reading Burke’s writings every day? Some have said that within the central pages of Reflections on the Revolution in France, there is a logic chain, but no one yet has found it. To attempt to do so is also somewhat un-Burkean; the best readers of Burke simply absorb the meanings organically. Doing so reveals that Burke was a man of the Enlightenment in his attempt to retell the course of human history somewhat in the manner, if not the substance, of such attempts by Hobbes, Locke, and Rousseau. These are the key points of Burke’s thought:

Burke argues governance requires more than one lifetime to comprehend. This is what Immanuel Kant thought too, but Kant was thinking about history yet to come whereas Burke is referring to the past, present, and future.

Burke, like other Enlightenment thinkers, refers to human nature as basic, but unlike them, he says it is too complex for any theory, policy, or ideology. Language is at the heart of it all; and in the French Revolution, Burke sees what Thucydides saw in the course of the collapse of Athens: words losing their meaning.

Burke’s most memorable passage is even more significant than its controversial fame.

It is now sixteen or seventeen years since I saw the Queen of France, then the Dauphiness, at Versailles; and surely never lighted on this orb, which she hardly seemed to touch, a more delightful vision. I saw her just above the horizon, decorating and cheering the elevated sphere she had just begun to move in, glittering like the morning star full of life and splendor and joy.

Oh, what a revolution! and what a heart must I have, to contemplate without emotion that elevation and that fall! Little did I dream, when she added titles of veneration to those of enthusiastic, distant, respectful love, that she should ever be obliged to carry the sharp antidote against disgrace concealed in that bosom; little did I dream that I should have lived to see such disasters fallen upon her, in a nation of gallant men, in a nation of men of honor, and of cavaliers! I thought ten thousand swords must have leaped from their scabbards, to avenge even a look that threatened her with insult.

But the age of chivalry is gone; that of sophisters, economists, and calculators has succeeded, and the glory of Europe is extinguished forever. Never, never more, shall we behold that generous loyalty to rank and sex, that proud submission, that dignified obedience, that subordination of the heart, which kept alive, even in servitude itself, the spirit of an exalted freedom! The unbought grace of life, the cheap defense of nations, the nurse of manly sentiment and heroic enterprise is gone. It is gone, that sensibility of principle, that chastity of honor, which felt a stain like a wound, which inspired courage whilst it mitigated ferocity, which ennobled whatever it touched, and under which vice itself lost half its evil, by losing all its grossness.

Here, he speaks of the Queen not only as herself, but also as an “artificial person” in the Enlightenment sense. Yet, she also embodies the nation’s heritage in an anti-Enlightenment way.

The key to love of country, Burke then argues, is in “the spirit” of a gentleman and in religion, in which our “passions” instruct our “reason.” This calls to mind Plato’s idea of the soul as a tripartite of reason, desire, and spirit. Burke is here challenging the Enlightenment’s conceit that men were living in an Age of Reason.

The theater, Burke says, is “a school of moral sentiments.” This echoes Adam Smith’s idea of “the impartial spectator” we imagine observing and passing judgment on our doings. Here is a wholly different approach to the cult of entertainment that inundates us today. This leads to an image not unlike that in our time of “the moral—or silent—majority.” Just because “half a dozen grasshoppers under a fern make the field ring with their importunate chink, whilst thousands of great cattle, reposed beneath the shadow of the British oak, chew the cud and are silent, pray do not imagine that those who make the noise are the only inhabitants of the field.” Shall we not think, here, of the media?

Burke then points to our advantages—that which we cherish and express in our “prejudices,” a word that, for Burke, unites the best instincts, character, and conduct of the self and society—and that upon which we base our civil society.

Then come the threats we must guard against: the idea that legitimacy requires a perfect (direct) democracy and the temptation to change the state whenever we choose, making us nothing more than “the flies of a summer.”

All this means that while there is no such thing as a “social contract,” society now is a contract, a partnership of the living, the dead, and those yet to be born. When we recognize and act on this we are in the state of nature.

Liberty comes from this, whereas theories or declarations of rights do not. Actual circumstances, not abstract proclamations, make a people free. When Hannah Arendt, in her contemplation of the Holocaust, recognized this in Burke, an unusual bond between liberal and conservative took place.

And if Burke had appeared in New Haven that evening, he would have added that for understanding society as a partnership, “Every college should have a graveyard in its midst.”

Charles Hill

Fonte: The New Criterion

Kenneth Rogoff, Carmen Reinhart and the spell of magic numbers

Bom artigo sob o complexo de inferioridade de alguns economistas e a eterna busca pelo numero mágico...Modestia a parte não tenho esse problema e sou muito feliz por ser economista, digo, graduado, mestre e doutor em economia. Sem desmerecer os amigos engenheiros e advogados, acredito que a graduação é fundamental na formação do economista.

Humanity will never cease its futile search for magic numbers. The latest example of this quixotic quest is to be found in the saga of Harvard professors Kenneth Rogoff and Carmen Reinhart, who suggested that a debt to gross domestic product ratio above 90 per cent was bad for economic growth. Those conservative politicians and their counsellors who based their advocacy of strict fiscal policy on this magic ratio have retreated with egg on their faces.
This episode has lessons well beyond the immediate fiscal debate. Generations of economists worried that their subject was not regarded as a hard science, a syndrome labelled as “physics envy”. Milton Friedman complained that it had not unearthed key numbers or ratios that could be regarded as constants. He claimed to have discovered one in his statement of the relationship between inflation and the money supply (“inflation is always and everywhere a monetary phenomenon ... ). But without denying the connection, Friedman’s rule does not work in the way that key natural science constants do. Even if one has decided how to measure both the quantity of money and the price level, there is no stable ratio between the two. Friedman’s own work showed that the ratio not only varies in the short term but over several generations.
This is a long way from the physics constant “g”, the acceleration the Earth imparts due to gravity, although even it has to be treated carefully. A stone thrown in a vacuum will fall at an acceleration of 32ft per second every second. But a stone thrown from your window will not fall as fast because of the friction of the air.
The search for a physics-type relationship in subjects such as economics is of long standing. After the second world war it was sometimes proclaimed that if government spending rose above 25 per cent of GDP there would be trouble. This assertion gained credence. Yet there were all sorts of difficulties in testing the assertion. Did the 25 per cent ratio cover capital as well as current spending? If it covered both, countries with a large state sector would be doomed even if a large part of the expenditure was in capital investment deemed essential for growth. But other paradoxes appeared if public investment was removed from this ratio. Money spent on recruiting science teachers appeared as dangerous current spending, while similar sums diverted to extending school lavatories appeared as virtuous capital expenditure. In any case state spending, however defined, has for many decades been well above 25 per cent. It may or may not have slowed down growth, but it has not had the predicted disastrous consequences.
Looking through some old papers the other day, I found a more specific example of unfortunate attempted quantification. In 1970, a widely quoted study by economics professors Richard Lipsey and Michael Parkin proclaimed that if the UK could only tolerate an adult unemployment rate of 2.1 per cent (then regarded as high), wage increases would average only 3 per cent per year, thus putting an end to the inflation problem. Unemployment in fact rose to several times the proclaimed ratio without this magic effect. But it was only in the Great Recession starting in 2008 that earnings increases dropped to 3 per cent or less.
I would be completely misunderstood if anyone thinks that I am intending to pour scorn on quantified research. But it is worth reminding ourselves of Aristotle’s dictum that each subject has its own degree of precision and it is a mistake to look for a similar degree in all of them.
An example of a limited but useful research finding is known as “Okun’s Law”, or more accurately “Okun’s Rule of Thumb”, named after Arthur Okun, a former chairman of the Council of Economic Advisers. This states that a 3 per cent increase in output (above trend) is associated with a 1 percentage point fall in the unemployment rate – the remainder of the increase is accounted for by rises in hours worked, labour force participation and productivity. Okun would have been the first to emphasise that the exact relationship depends on the country and time period under consideration. More important: the relationship applies to short-term fluctuations due to business cycle or policy changes and would be unlikely to apply to long periods of stagnation or inflationary pressure.
The general moral is that economic analysis and policy would benefit from a less credulous acceptance of each purported research finding. It would pay to wait until a number of different studies employing different techniques point in the same direction and have survived professional criticism. In the meanwhile we can go quite a long way with a few well established elementary generalisations and inferences from them.

Samuel Brittan

Fonte: FT

Rogoff and Reinhart : We remain confident in the prevailing view in this field that high debt is associated with lower growth

Bom artigo da famosa dupla de economistas de Harvard. Eles estão correto em relação a associação, interpretada, incorretamente, por alguns como relação de causalidade em único sentido: divida/PIB para crescimento econômico.

The recent debate about the global economy has taken a distressingly simplistic turn. Some now argue that just because one cannot definitely prove very high debt is bad for growth (though the weight of the results still say it is), then high debt is not a problem. Looking beyond the recent public debate about the literature on debt – we have already discussed our results on debt and growth in that context – the debate needs to be reconnected to the facts.
Let us start with one: the ratios of debt to gross domestic product are at historically high levels in many countries, many rising above previous wartime peaks. This is before adding in concerns over contingent liabilities on private sector balance sheets and underfunded old-age security and pension programmes. In the case of Germany, there is also the likely need to further cushion the debt loads of eurozone partners. Some say not to worry, pointing to bursts of growth after the world wars. But today’s debts will not be dealt with by boosts to supply from postwar demobilisation and to demand from the lifting of wartime controls.
To be clear, no one should be arguing to stabilise debt, much less bring it down, until growth is more solidly entrenched – if there remains a choice, that is. Faced with, at best, haphazard access to international capital markets and high borrowing costs, periphery countries in Europe face more limited alternatives.
Nevertheless, given current debt levels, enhanced stimulus should only be taken selectively and with due caution. A higher borrowing trajectory is warranted, given weak demand and low interest rates, where governments can identify high-return infrastructure projects. Borrowing to finance productive infrastructure raises long-run potential growth, ultimately pulling debt ratios lower. We have argued this consistently since the outset of the crisis.
Ultra-Keynesians would go further and abandon any pretence of concern about longer-term debt reduction. This position has been in the rhetorical ascendancy in recent months, with new signs of weaker growth. It throws caution to the wind on debt and, to quote Star Trek, pushes governments to “go where no man has gone before”. The basic rationale is that low interest rates make borrowing a free lunch.
Unfortunately, ultra-Keynesians are too dismissive of the risk of a rise in real interest rates. No one fully understands why rates have fallen so far so fast, and therefore no one can be sure for how long their current low level will be sustained. John Maynard Keynes himself wrote How to Pay for the War in 1940 precisely because he was not blasé about large deficits – even in support of a cause as noble as a war of survival. Debt is a slow-moving variable that cannot – and in general should not – be brought down too quickly. But interest rates can change rapidly.
True, research has identified factors that might combine to explain the sharp decline in rates. Greater concern over potentially devastating future events such as fresh financial meltdowns may be depressing rates. Similarly, the negative correlation between returns on stocks and long-term bonds, while admittedly quite unstable, also makes bonds a better hedge. Emerging Asia’s central banks have been great customers for advanced economy debt, and now perhaps the Japanese will be once more. But can these same factors be relied on to keep yields low indefinitely?
Economists simply have little idea how long it will be until rates begin to rise. If one accepts that maybe, just maybe, a significant rise in interest rates in the next decade might be a possibility, then plans for an unlimited open-ended surge in debt should give one pause.
What, then, can be done? We must remember that the choice is not simply between tight-fisted austerity and freewheeling spending. Governments have used a wide range of options over the ages. It is time to return to the toolkit.
First and foremost, governments must be prepared to write down debts rather than continuing to absorb them. This principle applies to the senior debt of insolvent financial institutions, to peripheral eurozone debt and to mortgage debt in the US. For Europe, in particular, any reasonable endgame will require a large transfer from Germany to the periphery. The sooner this implicit transfer becomes explicit, the sooner Europe will be able to find its way towards a stable growth path.
There are other tools. So-called “financial repression”, a non-transparent form of tax (primarily on savers), may be coming to an institution near you. In its simplest form, governments cram debt into domestic pension funds, insurance companies and banks. Europe is there already – and it has been there before, several times. How to Pay for the War was, in part, about creating “captive audiences” for government debt. Read the real Keynes, not rote Keynes, to understand our future.
One of us attracted considerable fire for suggesting moderately elevated inflation (say, 4-6 per cent for a few years) at the outset of the crisis. However, a once-in-75-year crisis is precisely the time when central banks should expend some credibility to take the edge off public and private debts, and to accelerate the process bringing down the real price of housing and real estate.
Structural reform always has to be part of the mix. In the US, for example, the bipartisan blueprint of the Simpson-Bowles commission had some very promising ideas for simplifying the tax codes.
There is a scholarly debate about the risks of high debt. We remain confident in the prevailing view in this field that high debt is associated with lower growth. Certainly, let’s not fall into the trap of concluding that today’s high debts are a non-issue. Keynes was not dismissive of debt. Why should we be?

Kenneth Rogoff and Carmen Reinhart

Fonte: FT

Limongi: Em defesa do Congresso

Excelente artigo sob os atritos entre o STF e o Congresso. Como o Limongi é reconhecidamente simpático ao PSDB, o artigo torna-se mais relevante e , quem sabe, poderá abrir um debate adulto sobre o comportamento lamentável do STF, principalmente da conhecida figura nefasta...


A confusão está armada. Supremo e Congresso entraram em rota de colisão. Gilmar Mendes, em curta declaração, apontou o culpado: o Poder Executivo. O Supremo se exime de culpa e responsabiliza os demais Poderes. Suas repetidas intervenções teriam um único motivo: pôr ordem no coreto. A omissão do Congresso, sua incapacidade de promover reformas institucionais teria forçado as repetidas investidas do Judiciário na seara alheia.

Rápida revisão das decisões recentes permite concluir o contrário. Da imposição da verticalização das coligações à intervenção do ministro Gilmar Mendes na semana passada, o Supremo tem contribuído mais para confundir do que para esclarecer, para lembrar o refrão do saudoso Chacrinha. As decisões emanadas do Poder Judiciário têm sido tão ou mais "casuísticas" do que as do Congresso Nacional; todas, sem exceção, prenhes de efeitos imediatos para a disputa político- partidária. Não há isenção possível neste tipo de questão. Tampouco é possível argumentar em nome do fortalecimento da democracia ou coisa do gênero. Qualquer decisão tomada favorecerá alguns partidos e prejudicará outros.

Segundo o noticiário da imprensa, o ministro Gilmar Mendes teria identificado vícios formais na tramitação da proposta apresentada pelo deputado Edinho Araújo (PMDB-SP). O Congresso teria agido de forma rápida demais. Não deixa de ser irônico. O Congresso é sempre atacado por sua omissão ou morosidade. Quando é ágil, levanta suspeição. Tamanha celeridade só se justificaria por razões escusas.

O fato é que o Congresso pode agir rapidamente e o faz com frequência. O ritmo da tramitação das matérias é ditado pela maioria, respeitada as normas regimentais. A intervenção do ministro se justificaria se estas normas e ritos tivessem sido violados. Foram? Se sim, quais? A opinião pública não foi informada dos vícios formais identificados pelo ministro Gilmar Mendes. Pelo que se depreende do que publicado na imprensa, a celeridade em si foi questionada. A suspeição motivou a intervenção.

Muitos analistas comungam da desconfiança que motivou a medida cautelar. O Congresso só se moveria com esta presteza para defender interesses particulares e imediatos. Por isto, mesmo, a medida foi comparada ao Pacote de Abril. O governo estaria alterando a legislação em causa própria. No entanto, é preciso ter claro que o Congresso estava apenas restaurando o status quo vigente antes da surpreendente intervenção do Supremo, concedendo tempo de TV ao partido criado por Kassab. Note-se: a emenda mais polêmica foi proposta pelo DEM e não por um partido da coalizão que apoia a presidente Dilma.

O tempo no Horário Gratuito de Propaganda Eleitoral (HPGE) conferido a cada partido é proporcional à sua bancada na Câmara dos Deputados. Partidos ganhavam tempo na TV na medida em que conseguiam aumentar suas bancadas. O Congresso Nacional, tempos atrás, barrou esse incentivo à migração partidária, impondo como referência a bancada eleita, isto é, a vontade do eleitor expressa nas urnas nas últimas eleições. Com esta decisão, um dos principais estímulos à migração partidária foi neutralizado. Foi esta decisão do Congresso Nacional - e não a imposição da fidelidade partidária pelo STF - a maior responsável pela diminuição das dança das cadeiras. Aliciar parlamentares para ganhar tempo na TV deixou de figurar entre as estratégias dos pré-candidatos à Presidência.

O STF, ao decidir que o PSD tinha direito a tempo na TV proporcional à sua bancada, reintroduziu, pela porta dos fundos, a motivação para a migração partidária. A estratégia teve que ser devidamente adaptada. Em lugar de atrair deputados, cria-se um novo partido. As restrições impostas pelo CN podem, agora, ser contornadas. A oportunidade foi prontamente percebida e alguns partidos, não necessariamente os mais fisiológicos, logo viram como tirar proveito das novas oportunidades.

Repentinamente, após anos de convivência, PPS e PMN descobriram suas afinidades ideológicas. Note-se o que está em jogo. Não se trata apenas de somar os tempos de TV que PPS e PMN têm direito em função da bancada que elegeram em 2010. Se fosse isto, a fusão teria o mesmo efeito que uma coligação. A fusão soma tempo de TV desde que seja capaz de atrair novos parlamentares, por exemplo, do DEM e do PMDB. Estes, ao se juntarem ao novo partido, carregam consigo seu tempo de TV. E é assim por força da decisão tomada pelo Supremo quando da criação do PSD.

A contradição entre esta decisão do Supremo e a que impôs a fidelidade partidária é patente. Afinal, a quem pertence o mandato parlamentar? Na realidade, ao assegurar tempo na TV ao PSD, o Supremo contradisse decisão tomada pouco antes, quando a bancada do PSD teve negada sua participação na distribuição de cargos no interior do Poder Legislativo. Depois desta decisão, ninguém mais, nem mesmo o PSD e seus aliados esperavam que o partido ganhasse tempo na TV.

Nestes termos, a proposta do deputado Edinho Araújo (PMDB-SP) e a emenda do DEM são reações a um "casuísmo". O Supremo alterou as regras do jogo. Difícil sustentar que a intervenção do Judiciário tenha contribuído para fortalecer os partidos e aperfeiçoar a democracia. Basicamente, a proposta, que o ministro Gilmar barrou antes que sua tramitação chegasse a termo, simplesmente restaurava o status quo.

As intervenções do Supremo no terreno da legislação eleitoral e partidária - é tempo de afirmá-lo com todas as letras - carecem de coerência. O Supremo, por paradoxal que possa parecer, tem sido fonte de instabilidade. Ao pretender legislar no campo eleitoral, não tem como evitar atrelar suas decisões à disputa político-partidária. Perde assim a isenção para reclamar a capacidade de arbitrar uma luta em que se envolve.

Fernando Limongi é professor-titular de ciência política da Universidade de São Paulo (USP)

Fonte: Valor

Chico Lopes: A Selic e a meta efetiva

Artigo bem interessante de um dos nossos melhores macroeconomistas. Confesso que acho a tese do Pastore criativa, mas nenhum pouco convincente.

Affonso Pastore é um dos melhores economistas brasileiros. Em palestra recente apresentou análise econométrica rigorosa demonstrando que a meta de inflação efetivamente praticada pelo Banco Central (BC) desde 2010 parece ser superior a 4,5% ao ano. Sua conclusão é que "não se pode rejeitar a hipótese de que a sociedade passou a perceber, nesse período, que a verdadeira meta perseguida pelo BC é de 5,5%".

Admitamos que isso é de fato o que está na mente da maioria dos membros do Comitê de Política Monetária (Copom). Para eles o objetivo de longo prazo da política monetária, num horizonte, digamos, de cinco anos, ainda seria fazer a inflação convergir para os 4,5%. Esta seria a "meta teórica". Já a meta efetiva, relevante para um horizonte de 12 meses a 24 meses, seria de 5,5%. Isto significa que, nesse horizonte de tempo, se a inflação for maior do que 4,5% mas menor do que 5,5% o Copom não estaria disposto a operar a taxa Selic para trazer rapidamente a inflação até a meta teórica. Naturalmente ninguém de fora do Copom pode saber se a conclusão do Pastore é correta ou não. Podemos apenas especular sobre suas implicações.

A rigor a discrepância entre meta teórica e meta efetiva não chega a ser um pecado capital. Governos muitas vezes se comprometem com objetivos ambiciosos de longo prazo e terminam buscando objetivos bem mais modestos no curto prazo. No governo FHC, por exemplo, o Conselho Monetário Nacional (CMN) fixava periodicamente uma banda de flutuação bastante ampla para a taxa de câmbio, com distância da ordem de 10% entre o piso e o teto, enquanto na prática a mesa de operação do BC trabalhava com uma minibanda quase igual a uma taxa fixa. Claro que seria melhor se o governo reconhecesse oficialmente que trabalha com uma meta de curto de prazo de 5,5%. Talvez pudesse alterar também o intervalo de tolerância, que poderia ser reduzido para mais ou menos 100 pontos de percentagem em torno da meta. Devia deixar claro, porém, que continua comprometido com um objetivo mais ambicioso de longo prazo, contemplando uma meta teórica até inferior a 4,5%.


É interessante notar que se a meta verdadeira for de fato 5,5% o processo de elevação da Selic iniciado agora poderia ser considerado tecnicamente desnecessário. A razão é que a inflação projetada para os próximos 12 meses, segundo a última pesquisa Focus do BC, está exatamente em 5,5%. Ou seja, a expectativa de inflação está ajustada à meta efetiva; logo não há nada a fazer dentro da concepção do regime de metas. Isto parece ser o raciocínio em que se baseava a noção da convergência não linear da inflação sugerida por Tombini. A inflação acumulada em 12 meses supera agora os 6,5%, é verdade. Não obstante, como é possível inferir da projeção para os próximos 12 meses, deverá convergir para 5,5%. Portanto o próprio mercado acredita que a inflação vai convergir para a meta efetiva.

Como vimos o BC decidiu não bancar essa aposta da convergência não linear. Ficou impossível enfrentar a artilharia pesada da mídia e dos formadores de opinião quando a inflação acumulada em 12 meses superou os 6,5% (não importando o fato de ter sido uma evolução absolutamente previsível!). A ameaça de perda de reputação ficou muito forte.

Estaria a autoridade monetária submetida a uma restrição política no manejo do seu principal instrumento? Estaria ela assumindo uma aposta arriscada contra o mercado? Todo mundo sabe que um bom banco central, como instituição guardiã da moeda, deve ser conservador e avesso a apostas de risco.

Então fica combinado assim. O BC vai elevar gradualmente a Selic enquanto a inflação 12 meses não começar a ceder. Isto só deverá ocorrer por volta de setembro ou outubro, o que sugere que a taxa atingirá um patamar de 8,25% a 8,5%. A partir desse ponto, com a inflação 12 meses caindo, a Selic poderá permanecer estável. Acontece, porém, que, em janeiro ou fevereiro de 2014, a inflação 12 meses vai cair abaixo da meta efetiva de 5,5%. Logo, usando a mesma lógica que motiva o atual ciclo de alta, o BC poderia promover um novo ciclo de baixa, levando a Selic de volta ao ponto de partida de 7,25% ou mesmo abaixo dele.

Pensando bem essa estratégia de política monetária tem mesmo alguns méritos. Primeiro, defende a reputação do BC eliminando a suspeita de que a Selic estaria congelada por determinação superior. Depois, aumenta a volatilidade na taxa, o que num regime de metas deve ser considerado uma virtude, não um defeito. O que deve ser estável é a inflação, o objetivo da política, não a taxa de juros, o instrumento. A volatilidade da Selic indica apenas que a autoridade está disposta a atuar sempre que julgar necessário, se as condições objetivas da economia assim o demandarem. Finalmente, há o benefício de que, se o quadro inflacionário se deteriorar em 2014 muito além do que está sendo projetado pelo próprio mercado, o Copom já terá iniciado em 2013 o movimento da taxa de juros na direção correta. Nesse caso, será necessário apenas tornar o movimento mais amplo e complementá-lo com medidas fiscais e macroprudenciais.

Francisco Lafaiete Lopes


Fonte: Valor

Lunch with Michael Sandel

O rock star da filosofia política em entrevista publicada no FT, no inicio do mês de abril. Vale a leitura.



A youthful 60, with mildly thinning hair, Michael Sandel is dressed in the garb of the academic: slacks, light blue shirt, drab jacket and no tie. There is little about his slight build and gentle mien to suggest he commands the kind of audiences usually associated with thriller writers or TV anchors. If you had to pick the celebrity from a line-up of scholars, Sandel would get away with it.
I had recently caught a glimpse of the philosopher at the annual literary festival in Jaipur, where he spoke about whether rape should be treated as a special crime after the gruesome murder of a young woman in Delhi last year. Presiding over a sea of colourful saris and tunics, Sandel came across as half-geek, half-guru. For a man who has been dubbed by the US media the world’s first “moral rock star”, it was a modest showing – a mere 5,000 Indians had gathered to hear him. Compared with the 14,000 he had drawn to an open-air sports stadium in South Korea a few weeks before, or the 30m hits he has received for his online lectures in China alone, it was small chapattis. But the lecture, which Sandel staged as a kind of Socratic dialogue with his audience, held everyone spellbound.
Coming from solid middle class background and raised in Minnesota and Los Angeles, Sandel studied at Brandeis University and then got a Rhodes scholarship to Oxford, where he discovered his passion for moral philosophy. He never looked back. He has taught at Harvard for most of his adult life and lives with his wife and two sons in Brookline, Massachusetts, just outside Boston.
The philosopher made his reputation in 1982 with his debut book, Liberalism and the Limits of Justice, a powerful critique of John Rawls’s “veil of ignorance”. Rawls was the giant of postwar US liberal philosophy. But it was only in the 1990s, when Sandel started his “Justice” lecture series at Harvard, that he began to acquire a broader following.

Sandel asks audiences to imagine themselves in acute moral dilemmas – facing an oncoming train, for example, or participating in a market for human organs. Then he uses people’s answers to tease out their hidden contradictions. Neither the type of example, nor his method of reasoning, is strikingly original. Instead, it is Sandel’s packed lecture performances and pioneering use of online educational technology that sets him apart. Even Sandel’s critics are impressed by how well he can command large audiences, sometimes on the other side of the planet which he can see only through a large screen.
. . .
It takes me a minute or two to adjust to the unassuming – almost mouse-like – professor sitting opposite me. We have taken a booth at Legal Sea Foods, a fish restaurant in Harvard Square, Cambridge, that is a short walk from Sandel’s faculty. It is part of a middle-market chain of fish restaurants. “I wanted you to experience real New England cooking,” says Sandel.
It is a bitingly cold late winter’s day and both of us are craving something hot. We order straight away: Sandel chooses a tuna burger and a small Caesar salad; I order a mug of lobster bisque and fish and chips. I apologise for the Britishness of my choice. “You can’t go wrong with fish and chips,” Sandel says. In spite of the temperature outside, we both stick to the glasses of heavily iced water before us. “Oh, no, no, I won’t,” says Sandel looking mildly perturbed when I ask if he wants a glass of wine with his burger.
I remind Sandel of his lecture at Jaipur. Does that type of reception still have the capacity to surprise him? “The short answer is that it kind of amazes me there would be such interest in books about philosophy around the world,” he says, before pausing a little awkwardly. He seems reluctant to discuss the reasons behind his popularity. I press on, and ask about the high-tech lecture he gave in Korea. Sandel nods enthusiastically. “It was in a beautiful set-up as the sun was setting, and then complete darkness. The upper stadium lit up, and the giant screen had translations running at the top,” he says, using his arms to indicate the scale of the event.
“I threw out questions and the audience’s images were projected because there were many, many cameras and they could see who was responding, and, if I called on another student on the other side to respond, you could see them responding to each other.”
But what is it that draws so many people in such diverse countries? Sandel thinks about it for a minute. We are already on our starters. Sandel seems uninterested in his salad. I drain my cup of soup. “There is an enormous hunger to engage in big questions that matter,” he says finally. “I find this in all these places I’ve been travelling – from India to China, to Japan and Europe and to Brazil – there is a frustration with the terms of public discourse, with a kind of absence of discussion of questions of justice and ethics and of values. My hunch is that part of what this is tapping into – the books, but also the lectures – is that people don’t find their political parties are really addressing these questions.”
I ask him about his latest book, What Money Can’t Buy: The Moral Limits of Markets (Penguin), in which he argues that the US and other countries are turning from market economies into market societies, as Lionel Jospin, the former French prime minister, once put it. Sandel argues that we live in a time of deepening “market faith” in which fewer and fewer exceptions are permitted to the prevailing culture of transaction. The book has infuriated some economists, whom he sees as practitioners of a “spurious science”.
He has been at loggerheads with the profession for many years. In 1997, he enraged economists when he attacked the Kyoto protocol on global warming as having removed “moral stigma” from bad activity by turning the right to pollute into a tradeable permit. Economists said he misunderstood why markets work. Sandel retorts that they know the price of everything and the value of nothing. To judge by his sellout lecture tours, he has clearly tapped into a larger disquiet about the commodification of life.
Which countries are the least receptive to his concerns about market fundamentalism? “China and the US – no question,” he replies instantly. “In other parts of east Asia, in Europe and in the UK and in India and Brazil, it goes without arguing that there are moral limits to markets and the question is where to locate them. In the US and China, there are strong voices who will challenge the whole idea of there being any limits.”
Sandel’s method is to probe audiences for where those might be. In China, he explains, people tend to draw the line at train-ticket scalping (reselling tickets for profit) during the Lunar New Year, when almost everyone travels home to their ancestral village. In the US, people recoil when confronted with the idea of markets intruding on “family issues”, as Sandel puts it, such as surrogate motherhood, or to the prospect of a free market in votes. “It is a question of locating people’s boundaries,” he says.
We are now on our main courses. I have resumed my industrious eating while Sandel makes only occasional prods at his burger. “Right at the heart of market thinking is the idea that if two consenting adults have a deal, there is no need for others to figure out whether they valued that exchange properly,” he continues. “It’s the non-judgmental appeal of market reasoning that I think helped deepen its hold on public life and made it more than just an economic tool; it has elevated it into an unspoken public philosophy of everything.”
Sandel mentions that, in 2005, he took part in a joint lecture series on “globalisation and its critics” with Lawrence Summers, then Harvard’s president, now back there as a professor having served in between as Barack Obama’s senior economic adviser. Sandel and Summers, who are also neighbours, clearly disagreed on where, or whether, to draw the line on economic reasoning. Their debates were a blowout. There was not a spare seat to be found in the Sanders Theatre. “Look, some of my best friends are imperialist economists,” says Sandel, half-smiling. “But they tend to see everything through their own lens.”
Fair enough, I respond. But isn’t it quixotic to suppose the political debate can be “remoralised” in the way Sandel is hoping? And shouldn’t we be careful what we wish for? There is, I say, a thin line between promoting virtue and practising tyranny. “It’s an open question,” Sandel disarmingly concedes. Then he gives me a quick sketch of “the rise of market reasoning”, from the triumphalism of Ronald Reagan and Margaret Thatcher through Bill Clinton and Tony Blair up to the present day. “What Blair and Clinton did – and I’m using them not to blame them but as emblematic of this tendency – was they moderated but also consolidated the assumption that markets are the primary instrument for achieving the good life,” he says. “So we never really had a debate.”
Still gently toying with his burger, Sandel’s tone takes on a note of regretfulness when I mention Obama, who in the philosopher’s view has promised so much and delivered so little. “During the healthcare debate in 2009 there was a long angry summer. I was listening to Obama on C-Span and I heard him make the case for healthcare reform by saying we have to ‘bend the cost curve in the out years’. I cringed because I thought that if that’s the way he’s trying to sell healthcare, he will never succeed.
“Later in the fall, Obama did recover his footing to some degree and he quoted Ted Kennedy, who did make a moral argument and not a technocratic one for healthcare. So he is capable of speaking a larger language but it’s been strikingly muted during his first term.”
. . .
Our plates having been cleared – mine clean, his half-finished – Sandel orders a skimmed latte with chocolate syrup on the side. I go for a double espresso. I confess that I am pretty hazy about the practical implications of what he is saying. Can he give an example of a specific change he would like to see that would put economics in its place? What he had just said about Obama sounded more like a critique of the White House communications strategy than of the policy itself, I add. Again, Sandel starts by politely agreeing with my premise. He says he is worried that in the US the language of values is monopolised by the Christian right, which focuses on personal issues such as abortion. Others, he says, should recapture the language of values and extend it to the economy.
But what kind of change would that lead to? I ask, hoping for something more concrete. “I think you could say that the weakness of my argument is that I’m arguing against an overarching singular way of thinking about all questions – ‘an economic way of looking at life’, as Gary Becker [the Chicago economist and Nobel Prize winner] described it,” Sandel replies. “I’m arguing against that not by putting my own overarching singular philosophy but by saying that is a mistake and we must value goods case by case. So the answer may be one thing on the environment and the right way of dealing with nature, and a different one with education and on whether we should offer financial incentive to kids to do their homework, for example, and different still if we’re arguing against a free market in kidneys and surrogate pregnancy.”
Still not entirely convinced, I ask Sandel whether he does anything in his own life to make the world less money-minded. He begins a couple of answers but peters out. I suggest that he makes all his lectures free online. “Yes, that’s one thing,” he agrees. After our lunch I see that Sandel is listed on Royce Carlton, a speaker’s agency, as one of its big names (without apparent irony, a posting by the agency last year said Sandel was available to lecture “at a reduced fee in conjunction with his new book, What Money Can’t Buy”).
But it is talking about the free stuff that gets him going. Sandel says he was recently approached by a Silicon Valley tech company, which he did not name, that has developed the technology to support interactive global lectures. He recently did a pilot run with simultaneous live audiences in Cambridge Massachusetts, Rio de Janeiro, New Delhi, Shanghai and Tokyo. Cisco TelePresence charges hundreds of thousands of dollars per session, says Sandel. This new method costs only a couple of thousand. The drop in price could change everything. “We could see them and they could see us. I could call out to a student in Delhi, and ask a student in the fifth row of a theatre in Harvard to reply to someone in São Paulo and someone in Shanghai – and it worked. The technology worked.”
Sandel confesses he would happily go on chatting about education’s new frontiers for as long as I want – but that would be a good while and I am in danger of missing my flight. The bill settled, Sandel kindly accompanies me on a hunt for a taxi outside. As we walk, he tells me of a recent conversation he had with Rahul Gandhi, scion of the Nehru-Gandhi dynasty, and likely future prime minister of India. “Gandhi was really excited about the possibilities of online education,” he says. “He told me: ‘We could never put all these people in universities. The internet is the answer.’ I was struck by how excited he was.”
As I get into the cab, it is Sandel’s enthusiasm that strikes me. The world may be in thrall to Sandel’s “imperialist economists”, I muse en route to the airport. But there is a living to be made in the resistance.

Edward Luce is the FT’s Washington columnist and commentator

Fonte: FT

Inside the offbeat economics department that debunked Reinhart-Rogoff

Ótimo perfil de uma raridade no mundo acadêmico americano: um departamento de economia heterodoxo.


It was surprising to learn last week that Harvard professors Kenneth Rogoff and Carmen Reinhart’s argument for austerity is based in part on an Excel blooper. What’s not surprising is who found it out.

The rebuttal came in the form of a paper released by the Political Economy Research Institute, a group at the University of Massachusetts – Amherst with close ties to its economics department. Two of its authors, Michael Ash and Robert Pollin, are UMass professors, and the other, Thomas Herndon, is a grad student in the department. No one who knows the UMass department was surprised they’d trained their considerable analytical firepower on Reinhart and Rogoff. Amherst has, over the past 40 years, developed a reputation as perhaps the single most important heterodox economics department in the country.

It wasn’t always that way. In the 1960s, it was a fairly mainstream department, with a moderately conservative inclination, according to emeritus professor and influential Marxist economist Richard D. Wolff. It employed Vernon Smith, a noted libertarian who shared the 2002 Nobel, from 1968 to 1972, and Hugo Sonnenschein, who would go on to be president of the University of Chicago, from 1970 to 1973.

That was when things started to change. The tipping point, Wolff says, was the denial of tenure for Michael Best, a popular, left-leaning junior professor. “He had a lot of student support, and because it was the 1960s students were given to protest,” Wolff recalls. That, and unrelated personality tensions with the administration, inspired the mainstreamers to start leaving.

That created openings, which, in 1973, the administration started to fill in an extremely unorthodox way. They decided to hire a “radical package” of five professors: Wolff (then at the City College of New York), his frequent co-author and City College colleague Stephen Resnick, Harvard professor Samuel Bowles (who’d just been denied tenure at Harvard), Bowles’s Harvard colleague and frequent co-author Herbert Gintis, and Richard Edwards, a collaborator of Bowles and Gintis’s at Harvard and a newly minted PhD. All but Edwards got tenure on the spot.

“One dean did mention, and whether this was a joke I’ll never know, that the goal was to become the Berkeley of the east,” Wolff says. “They said, ‘They became famous with the free speech movement, and you five will make us famous.’”

It’s rare to hire five new faculty at a time. It’s rarer to hire them after bargaining with them as a group. “We actually bargained as a group of five,” Wolff recalls. “On one side of the table, three deans, and on the other side of the table, five faculty hires. I had never experienced it before, and I have never experienced it since.”

Under those five’s guidance, the department came to specialize in both Marxist economics and post-Keynesian economics, the latter of which presents itself as a truer successor to Keynes’s actual writings than mainstream Keynesians like Paul Samuelson. “When I got there, the department basically had three poles,” said Gerald Epstein, who arrived as a professor in 1987. “There was the postmodern Marxian group, which was Steve Resnick and Richard Wolff, and then there was a general radical economics group of Sam Bowles and Herb Gintis, and then a Keynesian/Marxian group. Jim Crotty was the leader of that group.” Suffice it to say, most mainstream departments have zero Marxists, period, let alone Keynesian/Marxist hybrids or postmodern Marxists.

With the end of the Cold War, however, the Marxian element started to subside. The radicals started to get less radical, and the newcomers weren’t very radical at all. “I think a number of my colleagues on the left end of the department were taken with the idea that the great twentieth century battle between capitalism and socialism had ended. Capitalism had won and socialism had lost.” Wolff remembers. “So that project struck them as suddenly out of date or even anachronistic. It wasn’t relevant anymore.”

“The younger economists were much more empirically oriented, a bit more policy oriented,” Epstein says. “We’re a much more diverse group now.”

A big influence on that was the arrival of Pollin in 1998 from University of California – Riverside. Pollin, who had briefly been in the spotlight as an adviser to Jerry Brown’s 1992 presidential campaign, shared the empirical, policy-oriented bent of the department’s younger economists. And he brought money. When he arrived, he and Epstein founded PERI as a vehicle for the kind of policy research they specialized in. The money, Wolff recalls, came in large part from Pollin’s father Abe, who at various points owned the Washington Wizards and Washington Capitols.

(Update – Robert Pollin emails to note that among the other donors to PERI is Ben Cohen of Ben & Jerry’s Ice Cream fame. Cohen gave more after Ash, Pollin, and Herndon’s paper on Reinhart-Rogoff came out, in addition to “sending cases of ice cream for all our hard-working grad students.”)

“There was now, in a sense, two economics departments. There’s the regular one and PERI,” Wolff says. “You might want to call them left Keynesians, but the Keynesianism is the theoretical frame. Marxism, for sure, is not.” Pollin insists he’d be more than happy to hire Marxists; it’s just that economics departments don’t churn them out anymore.

To be sure, some of the economists in the department today wouldn’t be out of place working as applied macroeconomists anywhere else. But they still tend to focus on issues that other departments neglect. Lee Badgett, for example, is arguably the most important economist in the country on sexual orientation issues, and in particular on the economic and social benefits to LGBT couples of having their marriages legally recognized. Nancy Folbre, a professor in the department and frequent New York Times contributor, is one of the leading feminist economists currently working.

“I had long been interested in demography, fertility decisions, and household work, never central themes in Marxian theory,” Folbre tells me. “Still, I found a very supportive environment for the development of new ideas, including explorations of feminist theory.”

The demographics certainly bear that out. Only 10 out of the department’s 27 active faculty members are white men. At Harvard, by contrast, 39 out of 45 are.

Still, the gaps between UMass and its mainstream peers are shrinking. Arindrajit Dube, an assistant professor in the department, was trained at the notoriously conservative University of Chicago department and will be visiting MIT next year. “I’ve always had a really hard time with labels,” he tells me. “In grad school, a lot of my professors would talk about what makes a good Chicago economist, and I wasn’t sure I wanted to be a good Chicago economist.”

Whether or not he’s a good “Chicago economist,” Dube has certainly made a splash as an Amherst one. His research suggesting that raising the minimum wage does not reduce employment landed him a spot testifying before the Senate HELP committee. He claims his outlook, and that of the department, is more empirical than anything else. “One of the lessons I have drawn from controversies as well as my own work is that the theory will only take you so far, and empirical work is hard and fraught with dangers, but that’s really where things get hashed out,” he says.

Those skills were also on display in Dube’s own analysis of the Reinhart-Rogoff argument, which, while less splashy and certainly less funny than Ash, Pollin and Herndon’s analysis, was arguably more devastating. Dube used relative simple data analysis techniques to show that it’s far likelier that slow growth would cause high debt than the reverse.

That’s how more macro should go, Pollin emphasizes. “Use simple techniques,” he says. “Try to keep your modeling simple. Try to tell the story as simply and as clearly as possible.” Not all of Amherst is necessarily opposed to complex modeling. “Saying that current theory is a blind alley doesn’t mean we shouldn’t do theory,” Peter Skott, a post-Keynesian at Amherst, says.

But the key insight behind the UMass approach is that there are a whole lot of tenets of modern macroeconomics (and microeconomics, for that matter) that have gone empirically under examined. Take the idea that there’s a “natural” rate of unemployment, and that having unemployment below that would trigger troublesome inflation. Pollin understands the theory but argues it just doesn’t fit reality. “I think that core idea is just, is very weak empirically, the evidence is very weak,” he says.

It’s easy to overestimate the differences between UMass and more mainstream departments. The empirical microeconomics Dube does is not too different from what David Card, David Autor, Raj Chetty, and other microeconomists in more mainstream departments do. Pollin helped the Department of Energy implement the green portions of the stimulus, which was designed initially by mainstreamers like Larry Summers. And even the “left Keynesians” of Amherst don’t go as far as some of their peers at, say, the University of Missouri – Kansas City in dismissing the possibility of high deficits leading to inflation later on.

“It’s almost a talmudic claim that since no country with its own currency can go bankrupt, no deficit can be bad,” Epstein says. “They’ve made important contributions, and a lot of them are my friends, but we try to look at things more critically and not assume there are absolutes.”

But the department’s radical openness to alternate perspectives still sets it apart. “Learn from Marx, learn from Keynes, learn from Hayek,” Pollin says. “One of the biggest influences on me personally was Milton Friedman. He was very engaged with real world questions, and he made no bones about his ideological predilections.”

Sounds familiar.

Read more:

- At the Edge of Camelot by Donald Katzner, a former UMass professor. This is an excellent, expansive history of the UMass department.

- “Hip Heterodoxy” by Chris Hayes (before he got all famous), a classic The Nation piece on Amherst and other heterodox departments.

Update: I’m informed students and faculty call it “UMass” not “Amherst.” So I swapped that in where appropriate. Apologies for the lingo mixup.

Update II – the original version of this post said Abe Pollin owned the Washington Nationals. He never did; he only owned the Capitals and the Wizards.

Dylan Matthews

Fonte: The Washington Post

Italia: Enrico Letta, Democrata Cristão...

Perfil do novo Presidente do Conselho de Ministros da Italia: um jovem Democrata Cristão.


Enrico Letta, nominated on Wednesday as Italy’s next prime minister, comes from the moderate Catholic wing of the centre-left Democrats, a party loyalist working behind the scenes among its bitterly divided factions, while acting as the long-time bridge to Silvio Berlusconi and the centre-right.
Mr Letta, who at 46 will be among Italy’s youngest postwar prime ministers, was cabinet secretary in the last centre-left government of Romano Prodi from 2006 to 2008, a position his uncle Gianni Letta held in the Berlusconi government that followed.
The deputy prime minister in the new government is likely to be Angelino Alfano, former centre-right justice minister and a Berlusconi loyalist. Mr Letta and Mr Alfano are seen to have developed a good working relationship, keeping lines of communication open between the two parties.
A convinced pro-European who speaks excellent English and French – rare in Italian politics – Mr Letta was seldom seen as destined for high office. But in the context of the present crisis after two months of deadlock, he emerged as an anodyne and respected candidate acceptable to all sides in the new “grand coalition”.
While Mr Letta is regarded as the capable mediator between Democrats and Mr Berlusconi’s People of Liberty, his diplomatic skills will be tested by the leftwing of his own party, which is strongly opposed to forming a coalition.
Leading the Democrats in a round of consultations with Giorgio Napolitano, the president, on Tuesday, Mr Letta committed the party to co-operation in the unprecedented left-right coalition, while stressing the need for policies to create jobs and return Italy to growth, as well as political and institutional reforms.
Mr Letta also said there was a “need to make the EU change its line as, up to now, it has not given sufficient answers” to Europe’s economic crisis. On political reforms, Mr Letta said the number of parliamentarians should be reduced, the bicameral system changed, the administrative layer of provinces abolished, and the electoral law amended to allow voters a direct choice of their candidates. “Without the reform of politics, there is no way out of the crisis,” he said.
Mr Letta had been deputy leader of the Democrats. The party’s secretary Pier Luigi Bersani submitted his resignation last week after the party’s implosion, when it failed in five rounds of voting in parliament to agree on the choice of a successor to Mr Napolitano. That impasse led to the main parties appealing to Mr Napolitano, 87, to accept an unprecedented second seven-year term.
Speaking to the Financial Times on February 25, as it emerged that the Democrats had failed to secure the majority in parliament they had expected, Mr Letta said: “The result is the absolute majority of Italians have voted against austerity measures, the euro and Europe. This sends a very clear signal to Brussels and Frankfurt.”
In late March, Mr Letta said a broad coalition with the centre-right as proposed by Mr Berlusconi was “not ideal”, noting the “bitter differences” between the two main parties. But significantly, Mr Letta did not rule out the possibility, despite the hardline opposition to such a coalition expressed by Mr Bersani.
Mr Letta began his political career in the Christian Democrats, Italy’s dominant postwar party that disintegrated amid corruption scandals in the early 1990s. Some moved to the centre-right under Mr Berlusconi and others, such as himself, eventually migrated to the Catholic-dominated Margherita party, which later merged with the left to form the Democratic party in 2007.
Born in Pisa, Mr Letta graduated in political sciences at the city’s university and has a doctorate in European Community law. A former member of the European parliament, he sat on its committee for economic and monetary affairs.
He became Italy’s youngest minister when appointed as European policy minister under Massimo D’Alema’s centre-left government in 1998, and also covered the role of industry and agriculture a year later. He is secretary-general of Arel, a think-tank founded in 1976 by Nino Andreatta, the Christian Democrat economist, and is a member of the Aspen Institute

Fonte: FT

Delfim e o PIB potencial

Ótimo artigo do esforçado economista da ditadura: didático e up to date com a literatura na área, vale a leitura.


A estratégia mais utilizada pelos economistas na construção de seus modelos é considerar todas as condições que estão fora dele como constantes. A essa hipótese se dá em latim um nome pomposo: "ceteris paribus. Em português menos elegante, significa ignorar, pelo menos numa primeira aproximação, todos aqueles fatores que estão fora do modelo e cuja variação lhe seriam inconvenientes ou perturbadoras. Frequentemente os modelos exigem o conhecimento de parâmetros não estimáveis diretamente, e cuja construção estatística é, então, condicionada às necessidades do próprio modelo.

É o caso, por exemplo, do chamado produto potencial, cuja estimativa é o maior problema da política monetária. Mas o que é esse misterioso "produto potencial"? Na definição clássica de Frederic S. Mishkin ("Conference on Price Measurement for Monetary Policy", Federal Reserve Bank of Dallas, May 4, 2007), "ele é o nível do PIB no qual oferta e procura agregadas da economia são iguais de forma que, ceteris paribus ("all else being equal"), a taxa de inflação tende, no longo prazo, a gravitar em torno do seu valor esperado".

E por que é importante? Porque: 1) pensamos o produto potencial como o nível do PIB que leva ao maior nível sustentável do emprego; 2) precisamos saber qual o nível futuro do PIB consistente para mantê-lo; e 3) porque o "output gap" (a diferença entre o nível do PIB corrente e o seu nível potencial) parece exercer um papel importante na determinação do nível de inflação.

O item 1 decorre de uma relação (relativamente robusta) chamada Lei de Okun (um economista americano), que sugere uma ligação relativamente estável entre a taxa de crescimento do PIB e o nível de desemprego deduzido da taxa de desemprego "natural". Essa taxa é outra invenção do modelo. Ela corresponde ao nível de desemprego quando o PIB está no seu nível "potencial".

O item 2 decorre de uma relação (relativamente tênue), chamada curva de Phillips (um economista neo-zelandês), entre a variação da taxa de inflação e da taxa de desemprego: quando o nível de desemprego é o "natural", a inflação permanece constante. As quatro variáveis mencionadas acima são ligadas por duas relações que exigem o conhecimento do PIB "potencial" e da sua irmã siamesa, a taxa "natural" de desemprego. A grande questão é que a existência e estabilidade da lei de Okun e da curva de Phillips também dependem da condição ceteris paribus.

Agora mesmo, um excelente trabalho do FMI (o capítulo 3 do World Economic Outlook, April 2013, pg. 79) mostra como durante recessões a relação entre a variação da taxa de inflação e o aumento do desemprego (uma variante da curva de Phillips) é diferente (o que mostra que "todo o resto não permanece constante"). O efeito da diferença entre a taxa de desemprego e o seu nível "natural" parece ter hoje um efeito deflacionário muito menor do que no passado. Em outras palavras, dadas as condições institucionais atuais do mercado de trabalho, uma redução da taxa de inflação parece exigir um aumento consideravelmente maior do desemprego do que anteriormente.

No artigo de Mishkin a que nos referimos, ele explora os três métodos mais conhecidos para estimar o PIB potencial: a) o primeiro envolve a determinação da taxa "natural" de desemprego pela curva de Phillips e usá-la na lei de Okun, o que, pelos motivos expostos acima é mais do que duvidoso; b) o segundo usa a clássica "contabilidade do crescimento", com funções de produção para estimar a produtividade marginal do trabalho e do capital, esquecendo que elas, em geral, são apenas manipulações algébricas de uma identidade fundamental: o PIB (valor adicionado) é, por definição, igual ao total de salários mais o lucro do capital; e c) o terceiro usa o modelo neo-keynesiano (Dinamic Stochastic General Equilibrium (DSGE), que pensa o produto potencial como aquele que poderia ser atingido, se fossem eliminadas todas as ineficiências produzidas pela rigidez de preços e salários nos mercados de uma economia habitada por agentes racionais maximizantes. Dado o considerável fracasso desse modelo na antecipação da possibilidade de crises como a de 2008, a proposta é um beco sem saída.

Aparentemente, o grande economista Claudio Borio (acompanhado de Piti Disyatat e Mikael Juselius), começa a abrir uma nova porta que pode levar a resultados mais adequados. Em um recente trabalho ("Rethinking Potencial Output: Embedding Information about the Financial Cycle", BIS Working Papers nº 404, February 2013), sugere introduzir as fricções financeiras na estimativa do inobservável produto potencial.

Os resultados preliminares são muito interessantes, principalmente porque mostram as deficiências das estimativas anteriores e põem em evidência os riscos e os consequentes custos sociais das políticas monetárias mal informadas que os bancos centrais do mundo vêm utilizando há pelo menos 30 anos. Mostram, também, como é precária e pretensiosa a suposta "ciência" monetária de que se supõem portadores alguns economistas, e como eles ganhariam maior credibilidade se fossem mais modestos e menos "cientificistas".

A conclusão de Borio e seus companheiros é que "os fatores financeiros são importantes no entendimento e na mensuração do produto potencial e do 'output gap'. Eles são fundamentais para explicar a flutuação cíclica nas frequências tradicionais dos ciclos econômicos e na determinação de quais trajetórias do PIB são sustentáveis ou não". O trabalho está apenas começando. Mãos à obra, então!

Antonio Delfim Netto

Fonte: Valor

Entrevista com o Blanchard

Blanchard está muito otimista com relação a economia americana e exageradamente compreensivo com a agressiva política monetária japonesa. Vale a leitura.

Valor: A recuperação dos EUA é sustentável, num cenário em que o setor privado parece em boa forma, mas a incerteza sobre a política fiscal deve continuar elevada?

Olivier Blanchard: Eu estou confiante que a retomada vai continuar. Há muitos fatores que estão na direção certa. Primeiro, há a política monetária. O Fed foi agressivo e tomou muitas medidas para ajudar a economia. Os investidores esperam que as taxas de juros vão seguir baixas, o que é bom para a demanda. É bom que os juros básicos estejam baixos, mas as taxas que afetam a vida das pessoas é aquela de hipotecas e empréstimos. O sistema bancário nos EUA não está em situação perfeita, ainda há riscos, mas ele está melhorando em termos de indicadores de capital, de funding. O mecanismo de transmissão está funcionando de novo. Há juros baixos para quem quer tomar dinheiro emprestado. Há também o que os economistas chamam de demanda reprimida. Quando há uma recessão longa e poucos imóveis são construídos, o que nós vimos por algum tempo, então o estoque de imóveis cai. Em algum ponto não há imóveis suficientes, e a construção começa de novo. É a mesma coisa no mercado de automóveis. Se as pessoas não compram carros por um tempo, em algum momento elas têm que trocar um automóveis que não está funcionando bem. Nós vemos esse fenômeno no mercado imobiliário, nós vemos a mesma coisa em bens duráveis. Todos esses são sinais de uma economia que está se recuperando.
Valor: Mas e a política fiscal?

Blanchard: A política fiscal está de fato desacelerando a recuperação. A consolidação fiscal nos EUA é muito forte neste ano. É de 1,8% do PIB. Pode estar tirando de 1,5 a 2 pontos do crescimento. Eu espero que os EUA adotem uma trajetória melhor de ajuste fiscal. A ironia é que o sequestro [corte automático de US$ 85,3 bilhões que entrou em vigor em março], de algum modo, melhorou o panorama. Ele levou os investidores a concluir que o pior que pode acontecer é que o sequestro continue, e então o déficit será menor. Não é o melhor modo de fazer o ajuste, que deveria ser feito mais lentamente e com mais inteligência. Minha avaliação é de que a consolidação fiscal vai desacelerar e a demanda privada vai continuar forte. Com isso, a recuperação é razoavelmente forte.

Valor: O sr. acredita que os EUA poderão se tornar um competidor dos mercados emergentes nos próximos anos, devido ao renascimento da manufatura, mais do que uma economia baseada no consumo?

Blanchard: A maneira de pensar nisso é em termos de cadeias de valor. Produtos manufaturados não serão inteiramente fabricados na China, no Brasil ou nos EUA. Algumas partes serão produzidas na China, outras no Brasil e outras nos EUA. Pelo menos por algum tempo, os Estados Unidos vão continuar a ter vantagem em tecnologia de ponta, então parte da produção de manufaturados vai ocorrer no país. Nós vemos isso em biologia, em tecnologias da informação. No fim, produtos manufaturados serão feitos em todos os lugares do mundo. Nos casos em que é muito importante o trabalho barato, ela será feita nos países em que há esse fator. Nos segmentos em que for importante o trabalho especializado, será feita nos países em que ele existe. Quando for necessário basicamente estar próximo da pesquisa e desenvolvimento, os manufaturados serão feitos em países mais avançados, como os EUA.

Valor: Os bancos centrais dos países desenvolvidos, especialmente o Federal Reserve [Fed, o banco central americano] e o Banco do Japão, têm adotado políticas monetárias extremamente expansionistas. Como elas afetam os mercados emergentes? Eles devem manter ou intensificar controles de capitais para lidar com esses fluxos?

Blanchard: Há vários motivos pelos quais os capitais estão indo para os mercados emergentes, e é importante fazer distinções entre elas. A principal não tem a ver com a política monetária. Ela tem a ver com o fato de que os países em desenvolvimento simplesmente parecerem bem. Em termos de fluxos de investimentos estrangeiros diretos, os mercados emergentes, com forte potencial de crescimento, são muito atraentes. Em termos de investimento em carteira, os mercados de ações desses países parecem boas apostas, ainda que arriscadas. Esses fatores refletem a força dos mercados emergentes. Essa parte dos fluxos de capitais é boa. Outra força por trás dos fluxos de capitais são os diferenciais de juros. Como as economias avançadas têm um desempenho fraco e os mercados emergentes estão indo melhor em termos de atividade cíclica, há juros mais baixos nos países desenvolvidos e mais elevados nos países em desenvolvimento. Isso faz do investimento nos títulos dos mercados emergentes algo atraente. Esse diferencial de juros deve continuar por muito tempo e vai levar a fluxos de capitais para os emergentes. Também não são ruins, mas são menos importantes do que os do primeiro tipo. A terceira força por trás dos fluxos de capitais são episódios de aumento e redução de risco. Os investidores gostam de riscos, depois não gostam, o que faz os fluxos de capitais entrarem e saírem. Esses são desestabilizadores e países que os recebem, como o Brasil, devem ser livres para tentar suavizá-los por meio de instrumentos de administração de fluxos de capitais, medidas macroprudenciais e intervenção no mercado de câmbio.

Valor: O presidente do Banco Central, Alexandre Tombini, diz que há uma solução de meio termo entre países desenvolvidos e emergentes sobre esse assunto. Os primeiros adotam políticas monetárias expansionistas e os segundos usam eventualmente medidas de controle de capitais e macroprudenciais para lidar com eles. O sr. concorda?

Blanchard: Eu não gosto do termo solução de meio termo [compromise, em inglês]. Eu prefiro a palavra acordo. Acho que há acordo amplo de que as economias avançadas precisam usar política monetária não convencional porque não sobrou nenhuma política monetária convencional para ajudar na recuperação. Eles precisam fazer tudo o que podem. Eles não podem usar a política fiscal, uma vez que precisam de consolidação fiscal. Ao mesmo tempo, os países avançados entendem que essas políticas monetárias vão produzir movimentos nos fluxos de capitais. Como eles são voláteis, o acordo é que os países que os recebem devem ser livres para suavizá-los e usar quaisquer ferramentas que tenham à disposição. Esse é o acordo implícito. Ele não é perfeito, mas não é ruim, e talvez seja o melhor que pode ser feito.

Valor: Daqui a alguns anos, os bancos centrais dos países desenvolvidos vão começar a elevar os juros. O FMI espera que, no caso do Fed, isso ocorra no começo de 2016, mas considera que possa ser antes, se o crescimento for mais forte. Como isso afetaria emergentes como o Brasil e como esses países devem se preparar para esse cenário?

Blanchard: Quando isso ocorrer, é provavelmente porque o crescimento voltou, e essa parte é uma boa notícia para os mercados emergentes. Isso significa que as exportações vão aumentar. É algo que vai ocorrer com juros mais altos e, com isso, vai levar uma reversão parcial dos fluxos de volta para onde os juros estão mais atraentes, que seriam os EUA. Alguns fluxos de capitais provavelmente vão mudar de sinal.

Valor: O Banco do Japão adotou uma política monetária muito agressiva. Ela pode dar início a um processo de desvalorização competitiva ou é uma resposta a um processo de desvalorização competitiva que já estava ocorrendo?

Blanchard: Nenhuma das duas coisas. O Japão é um caso especial. Ele está numa situação econômica difícil há muito tempo. Já tentou muitas coisas. Um dos problemas do Japão é a deflação. Não é uma grande deflação, mas é deflação. É necessário fazer alguma coisa para estimular a inflação. Acho que a desvalorização do câmbio, que é um dos efeitos da política monetária, não tem como objetivo aumentar a competitividade, mas aumentar os preços. Se ela for bem sucedida, veremos mais inflação. Com isso, no fim, a taxa real de câmbio (que considera a inflação) não vai se mover muito. E a política monetária não vai fazer a situação da dívida pior. É uma tentativa de fazer a economia andar, e um modo de reduzir a relação entre dívida e PIB é aumentando o PIB, e é isso o que eles estão tentando fazer. Nós desejamos sorte a eles.

Valor: O real oscila hoje num intervalo estreito, depois de uma desvalorização significativa no ano passado. O Brasil abandonou o regime de câmbio flutuante?

Blanchard: Eu não acho que o Brasil tenha abandonado o regime de câmbio flutuante. O real ainda é uma moeda que flutua. Manter a flexibilidade da taxa de câmbio é claramente importante para o Brasil. Eu chamaria de flutuação administrada. Ela flutua, mas com o uso de controle de capitais. Nesse sentido não é flutuação pura.

Valor: O Banco Central brasileiro reduziu agressivamente os juros, o câmbio teve uma desvalorização expressiva no ano passado, o governo fez uma série de desonerações tributárias, mas a economia teve crescimento fraco em 2012 e a recuperação não parece forte. Por que a economia não reagiu de modo mais vigoroso a todos esses estímulos?

Blanchard: Deixe-me fazer pontos. O primeiro é que o crescimento potencial talvez seja menor do que nós pensávamos antes. O outro é que, se você olhar para a queda no crescimento, ela parece vir em grande parte do investimento. É provável que um número de distorções, assim como alguma incerteza sobre políticas, tenham um papel aí.

Valor: O Brasil cresceu 0,9% no ano passado e a inflação ficou próxima de 6%. O Brasil está preso num equilíbrio ruim de baixo crescimento e inflação elevada?

Blanchard: Não acredito nisso. Para mim, isso sugere que o Brasil pode não estar longe do crescimento potencial. Se estivesse muito abaixo do PIB potencial, a inflação cairia. O fato de que não vemos a inflação cair muito sugere que talvez o crescimento potencial seja menor do que pensávamos. Nós revisamos a previsão de crescimento para 2013 de 3,5% para 3%. A margem de manobra para usar políticas de estímulo à demanda é provavelmente limitada.

Valor: Na quarta-feira, o Banco Central brasileiro elevou os juros em 0,25 ponto percentual. A inflação está acima do teto da meta, de 6,5%, mas a recuperação não é ainda forte. É uma boa ideia começar a elevar os juros num mundo com grande liquidez?

Blanchard: Eu não conheço os motivos exatos por trás da decisão, então vou fazer um comentário mais geral. Você não quer aumentar os juros no último minuto, numa grande magnitude. É perturbador e como leva tempo para o aumento dos juros afetar a atividade, pode ser tarde demais. Então você quer fazê-lo antes, e lentamente.

Fonte: Valor