In the long run we are all unemployed?

Israel, Karl-Friedrich

doi:10.1016/j.qref.2016.07.003

Cited by 11 publications

(5 citation statements)

References 26 publications

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“…3 These include the asset price bubble of the late 1980s, the dot-com bubble or the financial market frenzy before the 2007/8 Lehman crash. 4 1971 1976 1981 1986 1991 1996 2001 2006 Percent Percent M0 growth rate (lhs) Top 10 % income share (rhs) The trends depicted in Figures 3 and 4 are in line with the hypothesis that expansionary monetary policy may increase inequality through the asset price channel (Williamson, 2009;Ledoit, 2011;Rawdanowicz et al, 2013;Hülsmann, 2014;Israel 2017;Duarte and Schnabl, 2019).…”

Section: Monetary Policy Indicators and The Japanese Income Distributionsupporting

confidence: 62%

The impact of (un)conventional expansionary monetary policy on income inequality – lessons from Japan

Israel

Latsos

2020

Applied Economics

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This paper analyzes the impact of conventional and unconventional monetary policy on income inequality in Japan, using hitherto unexplored data from the Japan Household Panel Survey. Empirical evidence shows that expansionary monetary policy in Japan has contributed to diminishing the gender pay gap, but also to increasing the education pay gap. These effects may have materialized via the aggregate demand channel and the labor productivity channel. In contrast, expansionary monetary policy has had no significant impact on the development of the age pay gap.

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Section: Monetary Policy Indicators and The Japanese Income Distributionsupporting

confidence: 62%

The impact of (un)conventional expansionary monetary policy on income inequality – lessons from Japan

Israel

Latsos

2020

Applied Economics

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“…These results show that from the vantage point of conventional business accounting, a return to gold as an anchor of the money stock is economically feasible. This conclusion does not take into account other potential benefits, such as greater economic and financial stability (Borio & Nelson, 2008;Huerta de Soto, 1995Schnabl & Hoffmann, 2008), reduced moral hazard that would arise from ending the political control over the base money supply (Hayek, 1978;Hülsmann, 1996Hülsmann, , 2006 and reduced inequality in terms of income and wealth as a result of more restrictive monetary policy (Duarte & Schnabl, 2019;Hülsmann, 2014;Israel, 2017;Israel & Latsos, 2020;Saiki & Frost, 2014).…”

Section: Discussionmentioning

confidence: 99%

The fiat money illusion: On the cost‐efficiency of modern central banking

Israel

2020

World Economy

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Bank of England, Bank of Japan, central bank, Eurosystem, Federal Reserve System, fiat standard, gold standard, operating expenses | INTRODUCTIONMonetary policy has become more and more activist since it had been entirely freed from its golden fetters in the 1970s. The end of Bretton Woods marked the beginning of a global monetary system based on unbacked fiat money. The potential and the dangers of such a system have been widely discussed in the economics literature, and they remain highly contested (Blinder, 2013;Friedman & Schwartz, 1986;Polleit, 2011).For many economists, the exogenous political management of a flexible money stock contains an essential part of the solution to major macroeconomic problems, such as low growth, unemployment and the business cycle (

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“…The most prominent example is Japan, where since the 1980s the fast ageing of the society has come along with declining household savings rates. Figure 2 shows that together with the short-term interest rate, which has been pushed down by the Bank of Japan to zero, household net savings 25 See Hooper, Mishkin and Sufi (2012) and Israel (2017). 26 Thus, the results are inconsistent with both the savings glut and the secular stagnation hypotheses.…”

Section: Global Savings Glut Ageing Society and Increasing Inequalitymentioning

confidence: 99%

Reasons for the Demise of Interest: Savings Glut and Secular Stagnation or Central Bank Policy?

Mayer

Schnabl

2019

SSRN Journal

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In this paper we compare the Keynesian, neoclassical and Austrian explanations for low interest rates and sluggish growth. From a Keynesian and neoclassical perspective low interest rates are attributed to ageing societies, which save more for the future (global savings glut). Low growth is linked to slowing population growth and a declining marginal efficiency of investment as well as to declining fixed capital investment due to digitalization (secular stagnation). In contrast, from the perspective of Austrian business cycle theory, interest rates were step by step decreased by central banks to stimulate growth. This paralyzed investment and growth in the long term. We show that the ability of banks to extend credit ex nihilo and the need of time to produce capital invalidates the IS identity assumed in the Keynesian theory to hold permanently. Furthermore, we find no empirical evidence for the global savings glut and secular stagnation hypotheses. Instead, low growth can be explained by the emergence of quasi "soft budget constraints" as a result of low interest rates, which reduce the incentive for banks and enterprises to strive for efficiency.

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In the long run we are all unemployed?

Cited by 11 publications

References 26 publications

The impact of (un)conventional expansionary monetary policy on income inequality – lessons from Japan

The impact of (un)conventional expansionary monetary policy on income inequality – lessons from Japan

The fiat money illusion: On the cost‐efficiency of modern central banking

Reasons for the Demise of Interest: Savings Glut and Secular Stagnation or Central Bank Policy?

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