After years of over-relying on the loose monetary policy, the key economic policy of major developed economies is focusing on moderate financial expansion, which is revealed in the Global Macroeconomic Policy Research Report released on the 9th of the International Financial Industry Association. Latest news. This report of Charles Collins, chief economist of the International Finance Industry Association, said that after more than 8 years of unconventional loose monetary policy practice, the main developed economies seem to have used monetary policy, and will begin more Attention to the relaxation fiscal policy.
Collins pointed out that the central banks of the main developed economies since the 2008 financial crisis have tried a variety of unconventional policy tools such as the prevention guidelines, quantifying loose, negative interest rate policies, but some economies of economic recovery are still weak, and the inflation level is also lower than the established goals.
At the same time, the financial stability risks brought by long-term loose monetary policy are rising.
At present, the European and American stock markets have been in historical and high, and the yield of the national debt is reduced to a historical low, and the yield of the seven countries even one-third of the national debt has fallen as a negative value.
Collins believes that more radical monetary policy will induce investors to continue to chase high-risk benefits and buried hidden dangers of asset bubbles.
In addition, the negative interest rate policy adopted by the central bank of some developed economies also damages the profitability of commercial banks, pension funds and insurance companies. In this context, major developed economies have been relaxed in 2010 to 2014 to boost domestic demand from last year.
For example, the Japanese government has recently launched a new financial stimulus plan.
In response to the decline in commodity prices, the Canadian government has introduced new initiatives to increase public investment.
In order to reduce the impact of "Deep" referendum to the British economy, the British government has said it will re-examine the medium-term financial rectification plan.
Collins believes that from economics, public debt accounts for the proportion of GDP does not have an absolute "safe level", depending on the specific national conditions of the countries. From Japan’s experience, if a country has a stable domestic storage foundation, the country can keep public debts at a higher level for decades. He believes that the actual interest rate of a country is more important to measure the sustainability of debt levels. If the actual interest rate is higher than the economic growth rate, then the country needs more financial surplus to ensure that the debt level can sustainable; vice versa has more financial expansion space.
Collins pointed out that the actual rate of return of the Group’s national debt has dropped from 2% to 3% to the historical average level to approach zero or even negative value, which greatly reduces interest expenses in these countries. Although economic growth in these countries has also slowed significantly in recent years, in addition to Italy, the economic growth rate of the Group of Seven countries is still more than 1 percentage point of its national debt, which means they can maintain the appropriate financial deficit to promote the economy. Growth ensures sustainable debt levels.
Collins believes that more importantly, these countries should use fiscal expansion policies to promote economic reforms, improve potential economic growth rates, lay the foundation for a more powerful economic growth in medium and long-term. He pointed out that public infrastructure investment is the most affected by the previous financial tightening policy, and countries should consider increasing public infrastructure expenses, not only directly stimulating short-term economic growth, but also helps improve labor productivity and medium- and long-term economic growth potential. Adam Bosen, Director, Peterson 上海干磨水磨服务区别 International Economics Research Institute, pointed out that many people habits will be aligned with financial stimulation and structural reform, but in fact, if the operation is proper, macroeconomic stimuli can also promote reform.
Looking forward to 2017, Collins expects that major developed economies will continue to maintain moderate financial expansion.
Japan is expected to continue to postpone consumption tax and expand the budget.
The UK is expected to re-adjust the medium-term financial rectification scheme, add public infrastructure investment, and soften the position of cutting social welfare expenditure.
Germany is expected to continue moderate financial expansion to invest in infrastructure and respond to refugees. The fiscal policy adjustment space in other Eurozone 上海千花论坛手机版 countries is limited. Regardless of this year, the results of the US presidential election, Collins believes that the next US government will continue to expand public infrastructure investment, and investment funds may come from enterprise tax reform, but because the US Congress still worried about the sustainability of medium-term financial sustainability, foundation The size of the facility investment is expected to be too large.
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