Wachstum durch Negativzinsen?

Feb 28, 2015 Nouriel Roubini

NEW YORK – Die Geldpolitik ist in den letzten sechs Jahren immer unkonventioneller geworden. Die Zentralbanken haben eine Nullzinspolitik, die quantitative Lockerung, eine Lockerung der Kreditvergabe und die sogenannten „Forward Guidances“ umgesetzt und ohne Ende beim Wechselkurs interveniert. Nun jedoch sind wir beim unkonventionellsten geldpolitischen Instrument überhaupt angelangt: negativen Nominalzinsen.

Derartige Zinssätze gibt es derzeit in der Eurozone, der Schweiz, Dänemark und Schweden. Und es sind nicht nur die kurzfristigen Leitzinsen, die inzwischen nominal negativ sind: Anlagen im Wert von rund drei Billionen Dollar in Europa und Japan mit Laufzeiten von bis zu zehn Jahren (im Falle von Schweizer Staatsanleihen) weisen inzwischen negative Zinssätze auf.

Auf den ersten Blick scheint dies absurd: Warum sollte man sein Geld zu negativen Nominalzinsen anlegen, wenn man doch einfach auf dem Geld sitzen und zumindest nominal nichts verlieren würde?

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Nouriel Roubini

Writing for PS since 2007
135 Commentaries

Nouriel Roubini, Professor of Economics at New York University's Stern School of Business and Chairman of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank. His website is NourielRoubini.com.

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David Escaravage Mar 3, 2015

Great article and comments. The economists were right, but this did not help. What was to be, wasn't. By numbers, the non-economists were trending best, until they were eventually no longer. Sad but true. And only then did the economists serve a forward looking purpose for all, in hindsight of course!

Can anyone point me to something written on this? Great theme for a book IMHO. Agree?
- Guy Genilloud Mar 7, 2015
  
  @David. I am not sure what you mean by "By numbers, the non-economists were trending best, until they were eventually no longer." An economist book you may want to read is Paul Krugman's "End This Depression Now!" (in case you don't know it already).
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Prabuddha Chaudhuri Mar 3, 2015

What about default risk?
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Michael Public Mar 3, 2015

Rodents eating money. Really?
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Tom Nitti Mar 3, 2015

It seems to me that NIRP has the potential to be extremely deflationary. Professor Roubini states, "Paradoxically, that implies a period of negative interest rates to induce savers to save less and spend more." If individuals are losing money in a savings account, will that incentivize them to spend it instead? I'm not sure I see the logic there. I do see the logic of investing it and yield-chasing instead in hopes of a better return (thus the explanation for over-valued asset markets worldwide). Additionally though, I do see a connection to utilize excess funds for the retirement of debt. If savings accounts have a declining value and investors are smart enough not to put these "safe" funds in risky assets, a very good option to improve one's balance sheet and cash flow would be the retirement of debt. On a grand scale, this would be quite deflationary. That gives me a great idea...I'm going to pay off my mortgage tomorrow!
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Fernando Fuster-Fabra Mar 2, 2015

I sometimes wonder if the economists the world over should step aside and let other professionals provoke a regeneration on confidence in new public investment financing through fiscal stimulus. I suggested this issue in spain back in 2011 and we could have created as many as half a million job posts in less than 3 years.
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arnim holzer Mar 2, 2015

As always Prof. Roubini a solid analysis. My only hope is that policymakers will honestly evaluate the role of contra-cyclical regulatory policy and stop pinning all their hopes on monetary policy. In the US and Europe the regulatory and tax creep has so damaged the entrepreneurial spirit that traditionally explosive levels of monetary stimulus can't create the solid lift-off labor needs. Capital expenditures, wage growth, and money velocity are at nonsensical levels compared to the central bank balance sheet expansion. Rates are at historic lows not because central bankers have set them there but because market buyers of interest rates have set them there.

In Europe, red tape, official aversion for risk and absurd corporate taxes are killing the entrepreneur spirit. France is a textbook case: Capex should be improving but doesn’t! Officials (governments) are asking insurers to take risk and invest in infrastructures but other officials (regulators, FSB) are warning ‘don’t take risks!’. The inevitable result will be that the China-sponsored AIIB will fund infrastructures in Asia and other regions while US and European entities would love to do so. Regulatory policy must be adjusted or the process will simply choke down to a true deflationary spiral.
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gustavo jose pacheco gomez Mar 2, 2015

It´s an interesting point of view, but if you keept your money in savings in us dollars and the money stayed two years in the bank when you see what happenen between the euro and the us dollar you can see earnings between 15% in the american currency. So, if you buy gold with your earnings you can see a lot of money.. where you had a gold chain two years ago now you have a gold ingot.
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Peter Taylor Mar 2, 2015

Sounds like economists are flogging a dead horse! All these tricks to get the economy moving! Maybe it is time to embrace the reality of a corpse, and think of new forms of transport? How about a stable economy that acts as a stimulus to internal change and cultural growth? That would also be more ecological. Dow we really need more infrastructure? Certainly, economists would never be able to recognise when that point had been reached!
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Rishi Arora Mar 2, 2015

There are many interesting points made both by Dr Roubini and by the other commentators. I do disagree with Dr Roubini on one aspect, it seems to be a race to the bottom with rates so countries can elevate there lack of demand problems by becoming more competitive via a devalued currency and exporting their way out of trouble.
This spells afew key things to me:
1. With a floating exchange rate mechanism, with the United States main competitors (UK, Europe, Japan and even China) lowering rates this will keep pushing to the dollar higher and higher which will prevent the fed from raising rates due to competitiveness issues.
2. If exchange rates keep dropping relatively to one another, this causes deflation and thus low and negative rates become entrenched.
3. With deflation, even mild deflation it makes fiscal deficits unsustainable unless budgets get cut even further, which elongates the austerity and makes the excess supply issue even more difficult.
4. Policy maker’s previous response to this is likely to be the same response moving forward and that is QE. It wouldn’t surprise me if this is a continuing trend in 2017-2019 even in the UK and US.
I think we can all agree that there are some fundamental issues:
1. Demographical changes in the west – were the baby boomers are demanding less as they are trying to get there fiscal houses in order.
2. There is a lack of productivity gains and thus causing wages not to go up more than inflation
3. There is huge slack in the labour markets around the world that again makes wages go up less than inflation
4. The savings glut (in china primarily) is having a massive once in a general change.

So how do we solve this or can it be solved? Personally I feel that an ever rising GDP should not be the aim and the system that we live in is so fundamentally flawed – were tax revenue is literally spent on day to day projects rather than governments spending it on that specific generation… we need a different way of thinking linked to demographics and population size, so the governments around the world are flexible and can adapt to populations.
The old system was effectively based on an ever rising prosperity and ever rising population – which for me is over… and until this has been accepted by the major powers in the world, and we stop following this fool hardy approach of devaluing for short term competitive gains we could be stuck in this trap for years if not decades.
My question would be, due to the short term political structure in most regions and the fractured nature of the world economy and political landscape… is this possible?
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Andrew Purdy Mar 2, 2015

If the drop in rates from 5% to 0% hasn't induced savers to spend, what makes anyone thing dropping rates to -1% or -2% will have that effect? More likely, it will just induce savers to exchange cash for gold, and bid up the price of gold.

Low interest rates cause the production of excess capacity and are ultimately deflationary. If one wants stimulus, you need to get cash into the hands of ordinary wage earners and not financiers.
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dan baur Mar 2, 2015

"negative nominal and real returns may lead savers to save less and spend more" - really? How about investors not getting their desired return save even more to compensate? Are Savers the same animals as Spender?
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Carlos Rodrigo Zapata C. Mar 2, 2015

IT'S TIME TO INVEST MAINLY IN PUBLIC AND COLLECTIVE GOODS

Undoubtedly, the world slips a critical juncture that requires a lower savings rate than in the past. This requires reducing savings and increase spending, as posed Roubini. In this sense, the question is, how we can make profitable The Negative Way to Growth, while avoiding its worst consequences and transforming them into a great opportunity.

A complementary or alternative policy that can significantly help counter the effects of the current situation marked by negative real interest rates, lies in investing in public and collective goods and services. This can help to address the serious existing structural weaknesses in the provision of these goods at global, national and local level, setting actual bases (in research, development, infrastructure, financial and non-financial business services of all kinds, etc.) for economic development, in order to alleviate structural change and universal access to technological innovations of all kinds.

This would boost the global economy, facilitate the transition from unsustainable to sustainable structures (necessary to deal efficiently with global warming) and help prevent waste of resources, which includes avoiding a possible military use of excess resources. This policy guideline is useful for all countries, but surely is much needed for middle- and low-income countries.
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Milton Churchill Mar 1, 2015

No for profit business would ever invest more in production when there is already a problem of over supply. You see businesses engaging in record buybacks of their own stock at record valuation levels because they understand that even buying their stock back at such lofty levels is still better than investments in property plant and equipment. Government is only making the situation worse through defecit spending. The authors solution is exactly what has been done over multiple decades, and has lead to the over supply problem. More of the same will only add to the deflationary problem, not solve it. Central banks and governments are throwing gasoline on a fire they, themselves, started.
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Tim McSweeney Mar 1, 2015

"But it also requires fiscal stimulus, especially public investment in productive infrastructure projects, which yield higher returns than the bonds used to finance them."
Where do you see governments willing to do this, given the current mantra against fiscal stimulus and for austerity and balanced budgets?
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Paul Daley Mar 1, 2015

There are so many costs and risks to negative interest rates that you have to wonder why anyone would ever push rates into that range. Roubini argues that the intent is to "jump start" the economy, but the effects of interest rate changes when rates are near zero are felt primarily in capital markets through capital gains. Little escapes to the real economy. So what's the point of paying these costs and taking these risks, particularly in Europe, where the ECB has no credible fiscal to provide the stimulus Roubini calls for. And why the awkward need for coordination between fiscal and monetary authorities when central banks would have full powers to do the job alone if capital gains tax rates were tied to real interest rates so that capital values were stabilized in the face of interest rate shocks. Economists have simply bought into a badly managed economic system, which serves the interest of no one but short term investors.
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Tomas Kurian Mar 1, 2015

Wholesale negative interest rates are just a weak remedy, we need negative retail interest rates ( of course, with move towards fully digital financial system)

Need for new institutions and macroeconomic tools
http://www.genomofcapitalism.com/index.php/18-1-need-for-new-institutions-and-macroeconomic-tools
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Julius Bloomfield Feb 28, 2015

Investment in public infrastructure projects is also the way for EC to help the have not countries work their way out of recession instead of continually loaning money with strings attached. This would direct the flow of wealth from the rich countries to make a stronger Europe in the long term future...if that is indeed what they want. The flow can always be redirected back to the rich countries when they need it in the future, which they undoubtedly will.
- Ralph Musgrave Mar 2, 2015
  
  Infrastructure spending is a ridiculous way out of a recession because that form of spending can take YEARS to get going, plus those sort of projects once started tend to go on for YEARS. Thus they're as likely to stoke the next boom as cure the current recession. And that's about the trillionth time I've pointed that out. That Roubini doesn't understand that point is no surprise. Incompetence is a necessary qualification for getting a top job. Or as Dean Baker put it, "In elite Washington circles, ignorance is a credential."
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- John Brian Shannon Mar 1, 2015
  
  Hi Julius,
  
  "Investment in public infrastructure projects is also the way for EC to help the have not countries work their way out of recession instead of continually loaning money with strings attached."
  
  An excellent point, and something I feel that should have been done all along, in all of the PIIGS nations.
  
  Best regards, JBS
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