Interfluidity: una propuesta de estabilización Zhang sobre NGDP targeting
Genevieve Signoret
Interfluidity nos dirige la vista a una propuesta de Haitao Zhang para estabilizar la economía nacional. Se trata de una creativa variante del régimen (más que monetario, fiscal) de objetivos en el PIB nominal (NGDP).
Reproduczo el mismo resumen que cita interfluidity:
From the abstract:In this essay I propose that the central bank be freed from its role of using interest rate policy to support aggregate demand. Instead, a truly variable public spending program is suggested to regulate aggregate demand. The program should be running constantly in order to minimize the time delay of fiscal responses. The amount of spending is variable and can be automatically computed from the realized nominal GDP so as to target a fixed growth rate for the nominal GDP. In order to gain popular support and avoid the pitfalls of traditional Keynesian stimulus programs, I propose that an electronic national market be set up to give voters direct control over where such stimulus spending is applied.
Obediente que soy, lo leí todo.
I comment in English for the benefit of Steve Waldman and Haitao Zhang:
- Isn’t the marketplace for budget allocation idea distinct from that of targeting NGDP via fiscal policy? Can’t the marketplace idea be evaluated as a separate proposal and be used with or without NGDP targeting?
- How would the marketplace scheme not degenerate into a California-style flop in direct democracy (commandeered by wealth special interests)?
- Why should the variable portion of the budget be managed by an institution (the marketplace) different from the one that manages the rest of the budget?
- Am I right that the essay implicitly models interest rates as exogenous to fiscal policy? And that, thus, only monetary policy, never fiscal policy, has any bearing on asset bubbles?
- Also, it seems that second order effects of inflation are implicitly assumed away. That’s why deflation is OK as long as demand is strong (Greenspan thinks the opposite: this is what motivated his put, right?).
Thank you for your thoughtful questions.
1. Yes. Voter markets can have more general applications though its advantages in stimulus spending are distinct.
2. Democracy implies majority rule. The majority makes decision for all, including the minorities. Market is about individual choice.
3. Regular budget is inherently political and is rightly so. Stimulus is different because delay and debate can render it ineffective. The main goal is to stabilize the private sector expectation of the aggregate demand. Uncertainty and delay would either make stimulus ineffective or require much larger and costlier intervention to achieve the same effect.
4. It is not necessary to assume that. Monetary policy, when freed from the need to stimulate the economy, can be more effective at preventing asset bubbles instead of inducing them.
5. We only proposed to manage the nominal aggregate demand through NGDP targeting. Inflation can be more effectively managed with monetary policy. As the NGDP targetting is ran with a feedback control loop higher order effects of inflation should be automatically accommodated.
In response to Haitao:
1. Thank you.
2. I do see your point that in direct democracy people vote up-down and majorities tyranize, where as in voter markets everyone has some say (money to allocate). But my concern was that rich folks will spend money to sway people to fund certain programs or not fund others. Rent seeking through the back door. For example, they can fund the online communities (crowd-sourced think tanks), just as today they fund traditional think tanks. Money will still talk, especially given that considered participation will be so costly (isn’t that why we pay lawmakers and their staff?). I’ll continue to mull the notion voter markets, however, and will read up on it. I’m completely unschooled in it. Thanks.
3. I see: you keep the stimulus perpetually lined up ready to go (even while proposals are perhaps being tweaked, refreshed, like Internet content itself) when needed, thanks to what then you must mean would be permanent markets. So that stimulus timely.
4. Agreed.
5. Agreed.
Genevieve