La macroeconomia dopo la moneta endogena (Wonkish)

Appena pubblicato sui Working papers di Siena

Bofinger and Ries versus Borio and Disyatat: macroeconomics after endogenous money. A brief note.

Sergio Cesaratto

Abstract

A paper by Peter Bofinger and Mathias Ries (2017a/b) strays from the recent rethinking in monetary analysis to criticise Summers’ “saving glut” explanation of the prevalence of low real interest rates. A similar critical perspective is held by Borio and Disyatat (e.g. 2011a/b, 2015), who are criticised, however, by Bofinger and Reis for their Wicksellian background. In this note, we compare and assess these two different views. Both Bofinger and Reis (B&R) and Borio and Disyatat (B&D) reject traditional “loanable fund theory” in favour of an endogenous money view of credit, but while B&R regard conventional marginalist (real) theory as inconsistent with the endogenous money view, B&D, following Wicksell,  regard it as consistent. We sympathize with B&R’s criticism of conventional theory, especially their Keynesian view of the interest rate as a purely monetary phenomenon. Interestingly, B&R refer to the problems of marginalist capital theory as undermining the natural interest rate concept.