2015년 1월 8일 목요일

[발췌: Frances Coppola's] Why QE won’t resolve the eurozone’s fundamental money problem (FT, Jan 2015)


지은이: Frances Coppola
자료: Financial Times, http://blogs.ft.com/the-exchange/2015/01/08/why-qe-wont-resolve-the-eurozones-fundamental-money-problem/?


※ 발췌 (excerpts):

The likely advent of quantitative easing in the eurozone has reawakened old fears. Opponents argue that QE would breach the prohibition of monetary financing of governments in Article 123 of the Lisbon treaty. Adherents of the structural reform theory of economic growth claim that QE would discourage reform efforts. German savers worry that the returns on their savings, already tiny, will fall even further. And many doubt that QE would have much effect anyway.

Expecting the European Central Bank to act on deflation in the eurozone is eminently reasonable. Inflation is far below target and the ECB is in danger of breaching its mandate. But in the absence of a coherent explanation of the reasons why money in the eurozone is “too tight to mention”, calls for QE seem to have more than a hint of the politician’s fallacy about them; “We need to do something. QE is something. Let’s do it”. Or, as the erstwhile blogger Pawel Morski said back in 2013, “because nobody’s got any better ideas”. Perhaps, if there was a better understanding of how the fiscal/monetary system really works, a better idea might be found. Though whether there would be the political will to implement it would, as always, be a different matter.

Sovereign governments that issue their own fiat currencies create money when they spend. Or, more accurately, the commercial banks through which they make payments create money. As Toby Nangle explains, governments neutralise the effect of that money creation by issuing bonds:

Unlike private debt (issued by non-financials to fund expenditure within a household budget constraint), monetary sovereigns issue debt to monetarily sterilise their fiscal expenditures. That is to say that they sell government debt not because they need the money to finance government expenditure but because they don’t want quite so much Outside Money with which they have paid civil servants, government contractors, benefit recipients etc, sloshing around the system, and so they effectively mop it up by selling government bonds.

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