Europe and the United States have both suffered losses from rigid monetary policy

Schiller, the Nobel laureate in economics, said: Microeconomics is like geometry. Starting from a few axioms, the overall building of microtheory is derived; but macroeconomics is not. It is like calculus. The method of derivation is almost It was made up. There are too many ingenuity to solve the equation, and the instrumental characteristics are so strong that macroeconomic management can be brilliant and easy to fail. Macro monetary and fiscal policy should be based on this methodological paradoxical logic.

Macro monetary policy must not be too rigid. The macro currency practices of the world’s major economies over the past quarter century have provided us with a living case. The first example is that Japan experienced a “lost 20 years” since the mid-1990s. At the beginning, the management’s reflections were mainly focused on the insufficient domestic demand caused by the aging and under-population of the population. The window of opportunity in the digital era was missed due to strategic mistakes. After losing the business environment to other East Asian economies that are more pro-business, the bitter Japanese finally realized that when the central bank ’s monetary policy was in a long downward range, the industry would abandon the industry. An affinity Keynesian monetary and fiscal policy combination tool, and adhere to the super neo-liberal view that the new currency is neutral for a long time, freeing the currency from the fiscal industrial policy and leaving it for a long time out of the economic structural changes. Until Abe launched Kuroda Tohiko, who has working experience in the Asian Development Bank and the Ministry of Finance, emphasized that the central bank must not only stabilize financial risks, but also promote the full employment of factors, and successfully convinced Abe to shoot the “three arrows” before the Japanese economy came out of the trough. Signs.

The second example is that Europe has experienced a 15-year economic downturn since the beginning of the century. At first, policymakers pinned their hopes on a unified European monetary system, but found that fiscal policy could not be matched with Keynesianism in the European continent. Not only could they not make a combination of effective promotion of economic growth, but also the economic growth of the West, Portugal, Greece, and Italy Weakness and the need for the European Union to implement an expansionary monetary policy, the cautious Germany made the same mistakes as Japan, the monetary policy was too rigid, and the management of the interest rate management zone to prevent inflation was absolute. So far, the minds of European currency managers have not turned around, and the European economy is likely to follow the example of Japan and reproduce the “lost 20 years”.

The third example is that after the 2008 subprime mortgage crisis in the United States, most economists adhered to the “regularity” of the cyclical length of the US economy of about 5.2 years. And Greenspan’s “small-run” micro-interest rate adjustment interval strategy continued the time of the economic downturn into a depression, but also delayed the opportunity for the economy to get out of the depression and recover. Obama-era central bankers are good students of the neoliberal school, and they are colliding with the Trump administration’s huge currency management ideas. If the new economic component supported by digital technology is at a disadvantage in the tug of war with the Federal Reserve overly cautious monetary policy, the US economy will linger on a longer path of low growth.

The neo-liberal school’s super-neutral point of view excludes the instrumental choice of the effective combination of Keynesian monetary policy and fiscal policy, arguing that as long as the currency is stable, development is a matter of finance, taxation and industry, which has been proven many times Is obviously wrong. Central banks, especially those in developing economies, should place equal importance on preventing financial risks and promoting full employment of factors.

In the second decade of the twentieth century, the structure of the world’s major economies changed, and the Phillips curve (a curve showing the alternating relationship between unemployment and inflation) saw the seesaw phenomenon of the relationship between inflation and unemployment. Since 2008, the U.S. economy is still operating at a low level, with most years in the 1.5% -2.5% growth range, but the employment rate has been good. Former governor of the US Federal Reserve System and several regional governors believe that the Phillips curve is seriously ill or has failed.

Since 2011, China’s economic growth has fallen from 11.4% to 6.6%, but China’s employment situation is also the best in 40 years. In the past five years, the full year’s employment tasks have often been completed from January to October, and 2019 is no exception.

The author believes that this phenomenon has occurred in the two major economies of China and the United States at the same time. A common factor is the computer and networked economy that replace human brain labor, especially digital technology, multi-dimensional digital terminal and network sharing technology. Even the changes brought about by the structure of the world economy. The large workshop assembly line and modular manufacturing economy are transitioning to a new business model and new model of the intelligent and intelligent economy supported by digital technology. Under the new technology conditions, the employment elasticity of the new economy is much higher than that of the old economy. Each point of GDP added by the economy brings a much larger amount of employment than in the past.

The failure of the Phillips curve is a phenomenon worth observing the changes in the economic structure around the world, but China and the United States are more prominent. Naturally, the monetary policy of various economies will also be accompanied by a phenomenon of unsuitability due to structural changes brought about by technological progress.

In the past 40 years, the macro currency teams of countries around the world have been affected to varying degrees by the new mainstream economics and monetary policy ideas. When the macroeconomic structure changes and new policy guidance is needed, it often follows the old policy mix because the theory lags behind practice. It is time for new thinking on the monetary policies of countries around the world.

In the past few years, the Chinese economy has also experienced similar monetary management policy directions as other major economies in the world. The lessons of Europe and the United States are worthy of our reference. We need to study the new monetary policy theory based on the global trend and China’s actual situation. We cannot attribute all the problems of economic development to the sectoral considerations against “grey rhinoceros,” and treat local debt as the “bad pot” of the “bad management” of the economy. “. The “living soul” of Marxist theory is the combination of theory and practice. China’s macro-monetary management should put the central bank’s basic task of full employment on its shoulders.