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Economics

如何从下一场危机中拯救新兴经济体

Oct 19, 2022 Keun Lee

发自首尔——当全世界都在努力应对由新冠疫情、中美贸易摩擦和乌克兰战争引发的通胀激增时，美国已经确定了它的对策：加息。然而此举虽然可能有助于平抑美国的物价增长，但这一高利率却加剧了其他国家（尤其是新兴经济体）的通胀压力。

通过提高利率，美联储正在将主要来自于新兴经济体的资本引向美国经济。随着资本流入推动美元升值，资本外流正在拖累新兴经济体货币。自今年年初以来韩元已贬值18%，埃及镑贬值20%，泰铢贬值15%，印度卢比贬值8%，人民币贬值13%。

与此同时新兴经济体的通胀率也在飙升。尼日利亚通胀在8月创下了20.5%的17年新高，埃及通胀率已接近15%，而阿根廷今年的通胀率预计将超过100%。虽然很难将美国的货币政策归为唯一的因素，但它会无疑使事情变得更糟。

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vic lai Oct 20, 2022

In the good old days, many US-dollar-related global liquidity crises caused by the US's interest-rate hiking-cycle, and hence the resulting quickly strengthening US dollar, mostly affected the world's EM countries, as in
(i) the Latin American liquiditry crisis based in Mexico in 1982, and
(ii) the Asian Financial Crisis of 1997-98.
---
This time is perhaps different.
Following the breakout of both the global pandemic in early 2020 and the Ukraine War early this year, many net-energy-exporting EM countries have actually benefited from the resulting quickly rising global energy prices, rather than being hurt by it.
Instead, some of the manufacturing-based DM countries, without energy self-sufficiency, are instead being non-trivially hurt this time, like today's Japan and Germany, other EU countries, together with Britain and Switzerland.
---
- vic lai Oct 20, 2022
  
  Perhaps in the coming decades, we'll have to worry more about the world's DM economies rather than that of the EM countries.
  Why ?
  ---
  All the existing known economic and political consequences of the prevalence of the thesis of neoclassical de-regulating pro-big-business and anti-worker macroeconomic policies enacted in many western advanced DM countries in the past decades, is now, given the current rising trend of political populism in the West, giving rise to its own anti-theisis, which seems to be the revitalization or renaissance of 1970s-like populist worker-movement, labor unions, and class-struggles in the West.
  The unstable economic pendulum, with the ball having gone too far to the rightist extreme in recent decades, is now inevitably starting to swing back to the opposite leftist extreme, with the help of more and more of the newly-elected populist pro-worker ruling political parties in those western DM elected ruling governments.
  ---
  Relative to the 1970s, this time will be quite different.
  (i) The resulting re-vitalized labor unions in the West may become even more militant than their grandfather-workers in the 1970s, especially when many of those more and more powerful workers in the US will also literally be equppied with their own guns.
  Following the relative demise of neoliberalism in the western DM countries will be Karl-Marx-like revived class struggles there.
  (ii) Given a relatively persistent inflationary macroeconomic environment in many western DM countries in the foreseeable future, it's no longer as easy as in the good old days for the future federal government of the US, say, to borrow enough money in the private markets to help finance her larger and larger deficit-spending (given the known monetary fact that MMT-like new money printing performed by the central banks can no longer be frequently abused by the central governments), so that hopefully the "entrepreneurial" governments there can mostly succeed in crowding-in much more sorely-needed private real investments than before, especially if doing so will be fully assisted by their government's
  (a) strive to pursue deglobalization, which is promoting reshoring of their offshored ODI real investments back to the US,
  (b) use of geopolitical brute forces to "lure" say both Taiwan's chip plants and Germany's heavy-energy-consuming manufacturing industries to be offshored to the US as well.
  ---
  But, if China is widely expected by the US's profit-seeking private investors to be refusing to buy en-masse the chips and other US manufacturing exports that are going to be mass-produced in the US in the coming years (thanks to all the ongoing efforts made by the current Biden administration), then those US private entrepreneurs will not do as they are told by the current or future US federal government, and so they will refuse to massively real-invest in the US's reshored chips and other industries, simply because they now find it unprofitable to do so.
  ---
  Without China's big, profitable, and reliable exports markets in the coming decades, the US's
  (1) coming manufacturing reshoring,
  (2) federal government's future tax revenues,
  (3) coming aggregate demand in her own macroeconomy,
  (4) coming overall innovativeness,
  will all be much compromised.
  Anyway, it seems that all the above longer-term potential real problems facing the US aren't old Biden's current main short-term (vote-begging) considerations.
  ---
  - vic lai Oct 21, 2022
    
    Once again, this time may be quite different, thanks to the US federal government's much increased deficit spending especially in the past quarters following the breakout of the pandemic in the US in early 2020.
    The US federal government's much increased remaining total debts (as a proportion of her GDP), or her quickly rising overall leverage, as a result of the massive propping-up of her own deficit-spending since early 2020, has enabled
    (i) both the US households and the US private corporations to much clean up or further improve their own balance sheets, with relatively much lower overall leverage as a result than in the few years just before the breakout in the US of the GFC of 2007-09,
    (ii) other EM countries like China, which have always been net-exporting massively and yearly to the US, to engage in less-damaging debt-deleveraging, resulting in a (much) lower overall leverage level than without the US government's latest lavish deficit spending.
    ---
    In short, following the breakout of the pandemic in the advanced DM countries, their central governments' combined re-leveraging actions, mostly accommodated by their central banks' new accompanying QEs, have not only helped their own private sectors to have much-less-indebted overall balance sheets today, but have also helped other net-exporting EM countries to
    (i) avoid releveraging too quickly, or
    (ii) more easily succeed in deleveraging.
    Those net-energy-exporting EM countries have further benefited from the accelerating rise in global energy prices in more or less the same period of time.
    ---
    Contrary to popular global belief, the US Fed's current mere-interest-rate-hiking cycle alone will not necessarily cause widespread asset-market-bubble popping in the virtual economies (and hence damaging economic recessions in the real economies) either in the US or in other DM countries, or even in the rest of the world (the EM countries included), since much also depends on
    (a) whether the central governments of the DM (and EM) countries are willing to incur much more leverage of their own than before, so that the otherwise very high and unsustainable overall leverage ratios in the private markets there will not further rise to a too-high level to eventually cause the good old vicious financial cycle :
    
    rise in market interest rates propagated by the central banks (say to fight domestic runaway inflation) ---> quick drop in asset market prices ---> quick selling of highly-leveraged financial assets in the markets to help raise funds to cope with margin calls ---> further drop in asset prices ---> popping of asset market bubbles ---> seriously negative wealth effect ---> seriously-hurt private commercial banks ---> much less new credit or money creations by the banks than before ---> balance-sheet-repairing economic recessions,
    
    (b) but if the quickly rising leverage of the central governments of the DM countries are instead mostly financed by their central banks' MMT-like new money printing QEs, say, which this time also add directly to their macroeconomies' aggregate demand, runaway inflations will result in those countries, particularly if the global supply chains are also disrupted and if the global energy prices also shoot up at the same time, and
    (c) whether the central banks quickly intervene by immediately providing the necessary much-cheaper liquidity to the global private financial markets.
    ---
    This time may be different, or so I think, in the sense that,
    (i) the US Fed's current non-trivial interest-rate-hiking cycle, combined with
    (ii) the relatively healthy overall balance sheets of both the US private households and the US private corporations (since much of their remaining debts have already been transferred to the US federal government following the breakout of the pandemic),
    will not necessarily or fatefully lead to another serious asset-bubble-popping-induced prolonged economic recessions as in the bad old days.
    ---
    And as a result, the US's continued relatively strong importing power from the rest of the world (her continued role as the world's consumers of last resort), which has further been enhanced by the much strengthening of the US dollar in the global FX markets, will combine to help prevent many EM countries from falling into their own interest-rate-hiking-induced economic crises in the foreseeable future.
    Note that quickly rising inflation also reduces the real leverage of those highly-indebted EM countries.
    ---
    Instead, what's been happening this time, and what will likely be happening in the coming quarters, is that, the overheated domestic US macroeconomy has kept spilling over to many other EM countries in the world in general, and has helped today's China to more easily deleverage (China's coping with the controlled popping of her own precarious real-estate-market bubble in an easier manner) in particular, even without the external disturbances of the ongoing war in Ukraine.
    It can be said that this time the US is reciprocating China's previous "kindness," since China's 4-trillion-yuan investment binge (more than 40 trillion yuans in total) had also helped the US to more easily and quickly deleverage in the painful years following the GFC of 2007-09.
    ---
    We should look at not only the interest rate, but also the current remaining overall leverage of the private sector as well.
    Afterall, it always takes two to tango.
    The desire both to save and then to spend of many of the US households are more easily satisfied this time, thanks to their country's always-vote-begging federal government, leading to the current inflation-prone --- not recession-prone --- or overheated domestic macroeconomy in the US (perhaps together with refusing-to-go-into-recession rest of the world).
    ---
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如何从下一场危机中拯救新兴经济体

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