Austrian Economics and the Debate

Source:

张维迎:林毅夫思想和50年代计划经济思想完全一脉相承

林毅夫再系统回应产业政策之争:成功有药方 前提之一就是政府因势利导

“假设的真实性”:科斯与弗里德曼的”和而不同”之处——兼谈社会学研究中的”理性人”假设

Debating Government’s Role in Boosting Growth: Cowen and Smith

Austrian Economics Might Explain China’s Turmoil

 

A renewed topic around government and free market

1. 上世纪20和30年代经济学界有关社会主义计划经济可行性的大争论

先来看张维迎的文章

“兰格用新古典主义范式证明,通过引入一般均衡的“瓦尔拉斯拍卖机制”,计划当局可以模拟出价格,解决经济计算问题。”

“米塞斯认为,市场是一个过程,没有生产资料私有制基础上的要素市场,没有自由价格,计划当局根本没有办法解决经济核算问题,也就不能有效地分配资源于不同的部门。”

“哈耶克进一步讲,为什么计划经济不可行?因为经济计算所需要的知识、信息都分散在每个人脑子里,尤其许多知识是主观的、默性的, 只可意会不可言传,除了当事人自己实际运用或通过价格机制传递,其他人根本不可能获得。”

-> 哈耶克这个论调等于是说 每个人的效用曲线是无法发现的 价格均衡是自我论证的偏颇的 并且无数人的效用曲线形成的整体形状也是无法模糊发现的。参考弗里德曼的说法,关键不是假定的真否,而是结果是否符合实际。哈耶克是在结果上否定了这种可能。

张维迎继续说这是范式问题

“按照新古典理论,市场就是一个资源配置的机制,就是给定资源、偏好和技术情况下,如何使得资源得到最佳配置。”

-> 市场的有效性依赖于信息的对称和完全,如果现实中信息不完全、不对称,市场有效的提前就不成立了,结论自然是市场失灵了,需要政府干预。

“但按照米塞斯和哈耶克发展的奥地利学派的理论,市场首先是一个认知机制,其主要功能是发现和传递信息,使得每个人的创造力得到充分发挥。”

-> 正是因为信息不对称,我们才不得不依赖于市场解决问题,才需要市场价格作为信息发现机制和信息交流机制。

你看本质上还是我上面说的,效用曲线和价格均衡的发现问题。奥地利学派认为政府没有办法发现价格,只能由市场发现。

张维迎还自己补充了一点

“市场的优越性正来自信息不对称,因为市场以分工为基础,没有分工就不会有交易,而分工意味着每个人只知道一些与自己所从事专业直接相关的专业知识,并且对任何产品,生产者总是比消费者知道的更多…分工和专业化之所以能提高生产率,正是因为每个人只需要少量的专业知识,但交换使得整个社会的知识数倍于任何单个人拥有的知识,这就是市场的优越性。”

这是说信息不对称甚至是产生市场的一种原动力。

关于主观发现的问题,张维迎解释

“在真实市场上,决策是决策者的一种主观判断,判断意味着即使同样的数据,不同的人结论会不一样…因为有一些重要的知识不在可利用的数据里,特别是有关未来不确定性的判断永远不在数据里。正因为如此,我们才需要企业家,才需要企业家精神,企业家就是面临着一个不确定的世界要做出自己的判断,这些判断是没有办法完全基于现有数据的”

这是说企业家的效应和价格的发现方式会与常人很不一样,和过去的市场很不一样。

“市场是一个发现和传递信息的过程,主要是通过企业家的警觉和判断来协调供给和需求,使得市场趋于均衡,没有分散的企业家活动,市场就不可能趋于均衡。进一步讲,按照熊彼特的观点,经济发展来自企业家的创新(事实也如此),创新同样是不可预测的,充满了一系列的不确定性。”

所以企业家会比原来的市场更有效地发现效应和价格。

“如果每个人有90%的可能性犯错误,10个人分别决策的话,同时犯错误的概率只有34.9%,至少一个人成功的概率是65.1%,只要有一个人成功了社会就有了这个产品。相反,如果集中做一个决策,成功的概率就只有10%。”

交给分散化决策还有概率上的优势。

当然其实新古典范式的经济学家也有反对产业政策的。比如上世纪70年代在新古典范式基础上发展出来的公共选择学派提出了“政府失灵”理论。一会我们通过Cowen和Smith的讨论也可以看到一些现代古典经济学家对。

 

2. 林毅夫关于新结构经济学和经济增长的观点

“经济增长表面上看是收入水平不断提高,但它从本质上讲它的决定因素是各种技术、产业不断创新,劳动生产率水平提高,各种软硬基础设施不断完善,从而降低交易费用的过程——这是一个结构变迁的过程。”

“我们现在能够变成中等偏上收入国家,一个很重要的原因是我们完成了从传统农业向现代化制造业的转型,不断攀登产业阶梯,慢慢进入到后工业化的、以工业为主的阶段。发展中国家的技术创新、产业升级以及软硬基础设施的完善,可以以发达国家走过的道路作为参考,这在经济学上叫“后发优势”。”

“罗伯特·索洛和迈克尔·斯宾塞发现二战后,有13个经济体实现了每年7%或者更高的经济增长速度,维持了25年或者更长的时间,大大缩小与发达国家的差距。五个特征:开放经济利用后发优势,实现了宏观经济的稳定,高储蓄率和高投资率,市场经济或走向市场经济,积极的、有为的政府。”

“原始的结构经济学是政府克服市场失灵,直接动员资源、资金,直接配置资源、资金到现代化的大产业,进口替代战略。结果并不如意,这也是70年代出现新自由主义政府失灵休克疗法的原因。不过后者结果也不好。
而看50、60年代东亚这些成功国家的政策,不是结构主义,而是出口导向先去发展劳动密集型的小规模产业。80年代转型成功的国家,推行的是渐进的、双轨的政策,一方面继续保持政府对经济的干预、扭曲,给原来政府优先发展产业当中的国有企业保护补贴,另一方面放开传统上受到压制的劳动密集型加工业的准入,而且因势利导,积极招商引资,建立经济特区、工业园等,来帮助劳动密集型的加工产业发展。”

“新结构经济学说决定一个经济体的结构内生于这个国家的要素禀赋结构,而要素禀赋在每个时点上是给定的,并且随着时间变化。这种变化会带来产业结构的变化。要素禀赋就是总预算,各种要素的相对稀缺性决定相对价格,也就决定了生产成本最低最有竞争力的产业。
而产业技术升级的前提是根本的要素禀赋结构必须不断升级。劳动者所拥有的资源越来越多的话,自然比较优势就变成资本更密集的产业。当然,在市场上竞争的时候不光是生产成本,还包括交易成本。因此在这个过程当中,也必须相应地完善交通基础设施和制度环境,来降低交易成本。”

“对于企业家来讲不关心要素优势,只有利润最大化,自发地按照禀赋优势来选择产业技术,需要一个竞争性的市场来准确敏锐地反映价格信号。而也需要政府来给第一个吃螃蟹的企业家激励,给外部性补偿。有效的市场,和能够因势利导的有为的政府,产生的结果就是开放、宏观稳定,储蓄率、投资率都会高。”

“渐进双轨的改革就是对于不符合比较优势的旧的产业继续给保护补贴,但是放开对符合比较优势的劳动密集型产业的准入,而且因势利导。而随着资本的积累,原来违反比较优势的大型资本密集型产业,逐渐变得符合比较优势。”

我们可以看到其实林的新结构首先是承认市场的信号作用的。而政府的作用主要是起到降低交易成本和找市场做出选择部分里提供激励。本质上新制度经济学的讲法。这是奥地利学派所缺少的(至少据上文所能看到的)。市场本身的发现仍然有效率之分,一些降低交易成本公共性商品在过去只能由政府提供。(在现在或许可以由货币超发和科技泡沫来提供)。

但我们也发现事实上并没有想象的那么好。政府在提供减低交易成本的设施和激励的时候,通常会干扰市场价格。事实上我们曾经讨论过企业家精神对政府的干预基本上都带有大程度的抵触。

所以我们总结一下,林的新结构经济学的禀赋理论其实本质上是依靠奥地利的市场发现的。而市场发现也可以被政策来提高效率,但是维持良性少负面影响的政策很难。

 

3. 难得讲到奥地利,我们借Noah Smith的文章来看一下西方主流对其的看法

“The Austrian school, for the uninitiated, is a hodgepodge of beliefs, usually holding that fiat currencies are doomed to fail, that a return to the gold standard is inevitable and that central banks are responsible for bubbles, market crashes and recessions.”

A.

There was the dramatic failure of the Federal Reserve’s program of quantitative easing to cause even a hint, even the slightest whiff, of inflation.

B.

Gold, as the hedge against the end of the modern economy, hasn’t worked out too well.
(North wrote this article in 2015)

スクリーンショット 2016-09-30 1.30.24.png

What’s interesting to me, however, is that events in China are actually bearing out some of the classic predictions of Austrian thinking.

Mises contend that recessions happen because too many resources are funneled into assets that won’t actually be productive in the future.

-> Businesses might make big, systematic mistakes.
(Though It has never been very clear exactly why malinvestment causes an economic hangover.)

(对的也就是说和理性人假设相反,正是因为不可发现的价格发现所以会导致一些系统性大错误最后崩盘。我不知道这算不算对奥地利学派的一个反讽。有些人可能会问,如果没有任何政府歪曲价格,真的会有错误投资吗。不妨想想老百姓种庄稼以及一些产能过剩的化工行业。)

China’s housing and stock bubble also bring us to another interesting Austrian notion — the instability of financial markets.
(Mainstream macroeconomics is only just barely starting to deal with the idea that financial markets may have a natural tendency to boom and bust.)

 

4. 其实前段日子在bloomberg上Cowen和Smith正好有一场关于美国是否需要财政政策的讨论

Cowen: My view is pretty simple: at this point the economy is fairly close to full employment and the momentum is positive. So right now I don’t see a significant role for demand-side arguments for government stimulus.

Smith: There’s also a possibility there’s still some demand gap left. (prime-age employment-to-population, wage, price) If we see inflation start to spike we can always put on the brakes. Meanwhile, because infrastructure repair is probably something we should be doing anyway, it makes for good fiscal policy; if there’s a demand gap, it’ll help with that too. If not, at least we have some nice roads.

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Cowen: If we go beyond cost-benefit test on the supply-side, there is by definition a potential harm in choosing inefficient policies that destroy some wealth and worsen resource allocation.Keep also in mind that the decline in labor force participation probably comes from structural factors.We should address those, but let’s do it by making the economy more efficient, not less efficient.

Smith: We don’t live in a world of certainty, where costs and benefits are known. If there happens to be a lingering demand shortage, we get an added benefit from infrastructure spending. If there’s not, then infrastructure spending will raise interest rates (crowding out private investment) and/or inflation. But we have the option to dial back spending if we see that happening. Of course, I think we should avoid letting our transportation networks decay even if there is NO demand gap.

你看,所以其实可能奥地利和有些新古典并没有太大范式差异,而是操作准则的差异。

 

 

Buy-side Reports

A response to request.

The following are the sources of buy-side reports that I gathered for study.  At first I aimed on all fund management firms in Japan as I am recently looking for a job here. Soon I found that the firms with qualified reports are often multinational ones and thus changed my focus.

And this is also partly the origin of this blog.

Rates are absolutely subjective.

Number with <m <y indicates the frequency of update.

And, of course, they are incomplete.

 

English part

AM G R rate status URL
Aberdeen *** Thinkaloud(20<m), insights (10<y) http://thinkingaloud.aberdeen-asset.co.uk/thinkingaloud/ http://institutional.aberdeen-asset.co.uk/en/ukinstitutional/insights/articles-and-thought-pieces
Western Asset **** White papers(4m), the economy(4m), etc http://www.westernasset.com/us/en/research/whitepapers.cfm
AB ***** Economic Commentaries (4m), Insights blog(<30m) https://www.abglobal.com/institutions/americas/home.htm#/
PICTET *** Latest news, comment and analysis(<5m) https://www.group.pictet/corporate/en/home/institutional_investors/news.p.1.html
LEGG MASON **** Market outlook + Investment insights (<10m), Chart of the week https://www.leggmason.com/en-us/insights.html
Fidelity ** Investment outlook (1q), articles https://www.fidelity.co.uk/investor/markets-insights.page
PICMO **** Insights (<30m) https://www.pimco.com/insights
AXA IM **** Research news(10<m) https://www.axa-im.com/en/research
Russell Investment *** Insights for institutional investors (<5m) http://fiduciary-matters.russell.com/
Princial Global Investors ** Insights exept rountine (<3m) https://www.principalglobal.com/knowledge/insights
BNY MELLON *** Investment Insight(<5m) https://www.bnymellon.com/us/en/our-thinking/search.jsp?type=investment-insight
PINEBRIDGE Investment ***** Commentary (10<m), Thought papers (10<y) https://www.pinebridge.com/insights/commentary/
CAPITAL GROUP **** Macro/market views (7<m) https://server.capgroup.com/capgroup/action/getContent/GIG/Europe/Intermediaries/Investment_insights/Entry_Page/II
Invesco ** Insights (2m) https://www.invesco.com/portal/site/us/investors/insights/
Amundi **** research news (<50m) http://research-center.amundi.com/recherche/All-articles
Schroders ** Insights (<5m) http://www.schroders.com/en/insights/
Barings * Investment update(<2m), Thought pieces (<5y) http://www.barings.com/us/InstitutionalAdvisers/NewsViews/InvestmentUpdates/index.htm
Henderson Global Investor * report(<10m) https://www.henderson.com/ukii/posts
State Street ** ideas(1w) http://www.statestreet.com/ideas/publications.html
PGIM *** insights(<3m) https://www.pgim.com/insights
East Spring ** market insights (<2m), macro briefing (1m) http://www.eastspring.com/our-perspectives/Insights
Franklin Templeton Investments * Investment insight (<2m) http://www.ftinstitutional.com/ftinstitutional/institutional/insights/investment-insights
W AM
Deutsche Asset Management *** CIO views (<3m) https://institutional.deutscheam.com/globalResearch/cio_office.jsp
Goldman Sachs AM *** Insights (<5m) https://www.gsam.com/content/gsam/global/en/market-insights/market-strategy/allFilterTopic.html
Blackrock **** Insights (<20m) https://www.blackrock.com/investing/insights
Barclays * Insights (<10m) http://www.investmentbank.barclays.com/our-insights.html
W HF
AQR AM *** Cliff’s Perspective(<2m), library https://www.aqr.com/library
Two sigma ** Insights(<2m) https://www.twosigma.com/insights
Winton Capital ** RESEARCH BRIEFS(<1m) https://www.wintoncapital.com/en/research-and-insights/research-papers-briefs
Man group ** Knowledge(<5y) https://www.man.com/3/thought-leadership
GAM * Insights(<10m) https://www.gam.com/en/insights/
GMO **** Recent research (<2m) https://www.gmo.com/

 

Japanese part

J fund report status address
Aberdeen ** Monthly aisan debt market report and topic report (<5y) http://www.aberdeen-asset.co.jp/aam.nsf/japanaimkk/marketreport
Western Asset ***** White papers(4m), the economy(4m), etc http://www.westernasset.co.jp/ja/research/whitepapers.cfm
GCI AM ** Product report http://www.gci.jp/jp/news/
AB Japan ***** Knowledge & market perspective (<10m), report(<5y) http://www.abglobal.co.jp/knowledge/
岡三アセマネ ** ファンドマネージャーの眼 (1m), market report(<5m) http://www.okasan-am.jp/colum/fundmanager/
Simplex AM
さわかみ投信
PICTET **** various market news (>30m), news columns (>10m) https://www.pictet.co.jp/archives/category/news/markets?num=100
LEGG MASON * US AU market news http://www.leggmason.co.jp/market_info/index.html
MU投資顧問 ** research manager report (1m), global outlook (<5m) http://www.mu-iv.co.jp/reports/index.html
TOUCHSTONE
レオス・キャピタルワークス * monthly report (1m) http://123.rheos.jp/investment/monthly_report.jsp
PORTFOLIA
Fidelity * market report (15<m) http://www.fidelity.co.jp/fij/news/index.html?check=MR
PICMO *** Insights overview(5<m) https://japan.pimco.com/JP/Insights/Pages/InsightsOverview.aspx
AXA IM *** Research news(10<m) https://www.axa-im.com/en/research
Russell Investment *** Report (1q) https://russellinvestments.com/jp/research/research-overview/research-overview/russell-communique
Princial Global Investors ** Research report (1y), market report (5<m) http://www.principalglobal.jp/news01.html#report
BNY MELLON *** Market report (5<m) http://www.bnymellonam.jp/market
SPARX ** Japanese stock report (1m), asia report (5<y) http://www.sparx.co.jp/report/
PINEBRIDGE Investment ** market memo (10<y) http://www.pinebridge.co.jp/news/market_backnumber.php
CAPITAL GROUP *** market view (5<m) http://www.capitalinternational.co.jp/insights/archive.html
Invesco
Amundi * market report (<30m) http://www.amundi.co.jp/report/list/
Schroders ** Insights (<5m) http://www.schroders.com/ja-jp/jp/asset-management/insights/
鎌倉投信 運用報告書 (1m) http://www.kamakuraim.jp/yuidayori/
Barings * ファンドマネージャー・コメント(1m) http://www.barings.com/jp/InvestmentTrusts/investmentinformation/fmcomments/index.htm
Henderson Global Investor * レポート (<5m) https://www.henderson.com/jpii/posts-nohgi
しんきんアセマネ レポート (<20m) http://www.skam.co.jp/newest_report/
State Street
PGIM * outlook(<2m) http://www.pru.co.jp/
MFS ** insights(<10y) https://www.mfs.com/content/ja_jp/insights.html
East Spring
Franklin Templeton Investments * 市場見通し(<3m) http://www.franklintempleton.co.jp/ja_JP/investor/commentary/market-perspectives
J Research
Nomura Research Insitution * Financial Research Paper(<2m) http://www.nri.com/global/opinion/lakyara/index.html
日本総研 * 経済・政策レポート、経営コラム・レポート https://www.jri.co.jp/column/
大和総研 ** レポート http://www.dir.co.jp/research/
富士通総研 ** 研究レポート http://www.fujitsu.com/jp/group/fri/report/research/
PWC *** Reports (<3y) http://www.pwc.com/jp/en/japan-knowledge/thoughtleadership.html
日本ベル研究所 ** リサーチメモ、 http://belletk.com/

Observation, Induction and Deduction

杂谈系列之三 (逻辑混乱系列)

第一篇杂谈里我谈到了我自己认为的三个研究的概念,观察、发现、和架构。在第二篇杂谈里我说了一些当时对于稳定度这个概念的想法。我认为观察发现乃至于架构应该着重于一些稳定度高的客观世界的表现。而在于稳定性的判断和定义上,我思考能不能用可能对其产生影响的力的大小和多少所构成的环境来表现。这种方法的问题可能在于主观性仍然太强,并且无法照顾到复杂系统中反身性,蝴蝶效应,黑天鹅等一些概念。这个问题后面再讲。

观察、发现、和架构的三个概念是我从自己糟糕的低劣的不足一谈的关于投资和学术研究的学习经验,以及对于正统经济学和社会经济学之争以及对于两者的一些原始假设方法的粗浅思考中感受到的东西。之后对于稳定性的思考也是如此。我发现现实的投资研究可能更注重于观察和一些简单的发现,这样做的结果是迷乱于糟糕的信号和个体间的不一致,并且无法构筑高效而低维的核心。有些社会经济学研究有类似的问题。而许多正统经济学研究沉迷于数学所带来的优美的架构之中,并甚至以毫不实用为荣

虽然可能十分无知和浅学,但是我认为这是一种比较可行而且应该是比较正统(可能不是唯一的)的对世界的贴近方式。事实上,它和一些正统的学术想法接近。比如Andrew Abbott的最近一个演讲

Abbott把理论(theory)与实质(substance)作为他研究生涯中无法脱离的五个根本中最关键的部分。Abbott认为理论有三重意义,抽象性与实际性相对、理论性与经验性相对、一般性与特定性相对。[1] 但是在强调相对的同时,Abbott也承认他可以是一种induction也可以是一种deduction,并且要从研究对象的实质出发的理解。并且强调是对于不同事物的相互关联,来“超越了“收纳”的孤立方式,而使理论成为了纯粹的相互关联。”。最后强调“理论不断地在重新建构它自身,没有一个最终的结果,而是始终处于不断地分析和接受经验性内容的过程当中。” [2]

借用以上概念,简单地来讲的话,观察发现架构实际指一种从实际到抽象,从经验到理论,超越孤立,但仍需要反映实际,并且可以形成一些纯粹的关联,从而得以扩张提高。

发现和架构是对世界的提炼和重新组建。发现的难点在信息的降噪和抽象的提炼。这就是为什么现有的机器学习在量化投资上并没有什么颠覆性的成功的原因。这里的问题其实有两个。一是信息本身的噪音程度。也是我为什么要强调稳定性的概念。二是降噪和抽象提炼包括简单的逻辑归纳,但并不止于此。我在第一篇的杂谈里就谈到了爱因斯坦所说的直觉问题。现有的机器学习很大程度上并没有在学习人类的思维方式,而是一种注重于结果正确率的黑箱模式。这样就导致在高程度的发现和更高一层的架构上几乎是很难有所作为的。alphago也许能远超任何人类棋手,但是我怀疑他能不能提供一种可以的流传的风格门派。但是即便我们见过人类历史中一些伟大的巨人的智慧,我们必须承认对“直觉”也就是高阶段的发现并没有一种成熟可说明的方法,也许这种是初阶的发现上的进一步降维,而我们对不能体感的维度总是觉得难以触摸的。

至于架构的另一个问题,提炼之后架构会不会导致逐渐对实际的偏离(比如宏观经济学的DSGE,以及作为前者的基础的微观经济学的Consumption Euler Equation,凸显出一种复制系统的特殊性),或者说太过注重于实际的贴合会不会导致无法深层次组建架构的问题。也许真正贴近physical law的话可以避免,也许只能不断地重新修正构筑。层次太高,现在不谈也罢。

再来看稳定性。虽然我们一定程度上说明了稳定性的意义,也给出了对稳定性的可能的观测方式,但是问题是,在实际操作层面,稳定性容易变成想当然地使用中期趋势长期趋势来观测,或者说也并没有其他太好的方法(事实上我自己也把长期趋势当成比较给力方法 )。但是这实际上可能带来一些问题,包括对pattern的偏爱,拒绝进一步思考和对复杂系统的特性的估计不足。我们借用最近比较火热的房地产泡沫当做例子来看。

我们曾经看过一些国内卖方的房地产研究。得出的最关键的一个结论是:房地产的周期本质是信贷周期,和货币政策关联最大

“2008年以来,中国经历了三轮房价上涨周期,2009、2012、2014-2016年,都跟降息和货币供应增速加快有关。这三轮房价上涨周期,政策都试图通过放松货币金融环境刺激房地产以稳增长。”

“低利率和货币超发推动房价上涨,所有房价大周期见顶以及房市泡沫崩盘都跟货币紧缩和加息有关,比如2007年的美国、1991年的日本。”

“住房贷款利率与新增个人购房贷款额呈明显的负相关,显示居民住房贷款需求对利率的变化非常敏感。”

“房地产本质是货币现象,是社会财富在不同资产之间重新配置的最终体现,更多的可能不是增量概念,是存量重新配置概念。”

而卖方给出的结论集中在争议政策和需求两方面看法偏空

“利率的下行空间也已经有限,宏观审慎政策已经明显转向。”

“房地产价格目前已处高位,居民购房杠杆被迫继续提升。对经济下行和未来收入增长放缓的预期也不支持居民部门继续大幅加杠杆。”

同样借助于卖方的数字和研究,这篇文章提供了一些不一样的观点

“1997年的东南亚,工业化刚刚进入青春期,因为在与中国的资源竞争中败北而盈利恶化,危机加深,再加上索罗斯的攻击,国家储备枯竭导致流动性短缺,意外崩盘;
1929年的美国和1991年的日本,都已经是世界上最发达的国家,城市化完成,工业化结束,需求停滞,再遇上加息、加税等一系列的政策叠加,最终泡沫刺破。”
“我们今天的社会发展阶段,只是1970年代中期的日本。1974年的能源危机过后,日本也经历了一段时间的转型低迷,汇率贬值。但是此后,随着转型的成功,产业竞争力提升之后,企业利润大涨,社会财富剧增,房价的泡沫就得到了缓解,继续维持着又涨了十几年。”

“中国仍然可以享有技术转移所带来的“生产力提升红利”。这就确保了中国有极大的机会走出转型陷阱,全产业的平均收益率不会跌到负数。于是房价,高高在上的房价,就得到了支撑,虽泡沫而仍不至于破裂。”

“在如今这个市道环境下,超过一半的行业都在萧条,政府不可能加息。中国3万亿美元的外汇储备面前,也不可能有哪个对冲基金敢飞蛾扑火。”

“对于大国来说,房价的崩盘通常来自其国家走向世界巅峰之后。1929年的美国,1990年的日本,都已经是当时世界大国中最发达的一员,产业竞争力强大,看似无坚不摧。但危机往往就此而孕育。这个时候的社会生产力提升将不再能够依靠“转移”来获得,于是增速逐渐停滞,再也无力追上膨胀的泡沫,在惯性作用下将泡沫吹向了无穷大。”

我们并不深入讨论谁错谁对,这里要看的是观察和发现的使用的方法和稳定性的对照。上述研究发现房地产周期和货币政策信贷周期有关,或者发现后进大国的房地产危机来自于需求停滞加上政策转向,由此在这些发现上做出线性类推。这里自然会产生问题就是能不能这么类推,哪种类推会更准确更有意义。换句话来说,哪个是建立在更高稳定度上的推论。

首先时间能增加稳定度吗?

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好像不能。所以我们不能单纯地从房价在过去五十年中一直上涨来推导出房价不会跌。也似乎无法预测政策的变动。长期的结果也只是结果,并不是背后真正的依凭。

但是似乎大城市始终会相对高速上涨的论断就显得靠谱一些?也许是因为我们抵消了一部分共同的力的影响,增加了稳定度?

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也许相信中期的惯性会更稳定?虽然我们无法判断自己身是否处于临界点,但是我们似乎总是会站在了大概率的一边?

其次,能靠判断最大的受力,也就是抓住主要逻辑来判断吗?。

上述两种说法一把货币信贷,二外加国家发展情况来视为判断房地产泡沫的中心依据。这时候我们要考虑的也许是这两者是否是决定房地产泡沫和破裂的关键力。仅仅使用计量方法得出的相关系数也许是不够的。这也许需要我们把房地产的泡沫建立成一种微观的模型来包括消费品属性需求模型,和投资品属性的预期模型,以及其中的转换,货币政策的影响来考察房地产市场的受力情况,并由此来判断。

然而在做个别案例判断的时候会发现,美国有衍生品泡沫,日本失去的十年有社会制度层面更深刻的问题。缺了这些因素,我们的发现还会一样吗?所以也许用类似发展的日本美国等大国来判断并不是一个稳定的好方法。

 

Continue reading Observation, Induction and Deduction

Big Data Lens on China’s Economy

Source:

Big Data Lens on China’s Economy (Mostly) Affirms Official Stats

Hedge Funds Look to Space With New China Economy Gauge

8 月万事达卡财新 BBD 中国新经济指数

陈沁、沈明高、沈艳:财智BBD中国新经济指数技术报告

 

The SpaceKnow Satellite Manufacturing Index 

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The San Francisco-based startup uses algorithms to track signs of manufacturing activity in satellite images of 6,000 industrial sites across China.

800x-1

SpaceKnow calculates the index with an algorithm that compares photos of industrial sites and assigns values for visual changes over time that indicate activity, such as visible inventory or new construction.

1x-12

UnionPay’s Card Transactions

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A unit of China UnionPay Co., operator of the country’s largest payments network, developed an index of card transactions to track real estate sales and other key aspects of the economy.

Baidu Consumption Indexes

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Baidu Inc. gauges consumption by tracking visitors to thousands of shopping centers and other destinations.

Baidu Industrial Employment Indexes

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Baidu’s employment indexes, based on foot traffic in 2,000 industrial parks around the country, offer a more dynamic reading than the government’s incomplete labor market statistics.

Alibaba Internet Shopping Price Index

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The Core Internet Shopping Price Index by Alibaba Group Holding Ltd. tracks prices of about 100,000 goods and services sold across its platforms, which show average prices down 1 percent in July from a year earlier.

 

New Economy Index

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财新智库数联铭品的「新经济指数」衡量「一个经济体中的新经济占比」。出发点是PMI的不足。[1]

 

“统计局和制造业PMI,和我们的新经济指数存在明显的此消彼长。这恰好反映了传统制造业的萎缩和新经济部门占比的扩张同时进行,这张图也同时说明,经济衰退并没有遍及所有行业,一些行业不仅没有萎缩,反而可能在扩张。”

NEI包括1.高端劳动力投入、2.优质资本投入和3.科技与创新一级指标,它们在NEI中的权重分别是40%、35%和25%。

20160304114526600

 

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新经济工资主要来自应 届生、51job以及智联招聘等数个招聘网站的招聘信息,即对劳动力的需求工资。

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NEI 中的投资二级指标更多反映民间投资、生产性投资,从投资指数的变化中我们也能观察到类 似相关性。总体而言,NEI 投资指数和民间投资累计值同比增速走势较为接近,与除房地产和基 础设施投资之外的固定资产投资增速更为接近.

 

[1]

1.PMI这个数字来自3000-4000家固定样本框中的企业。但是,在国家的经济禀赋发生根本变化时,固定样本框对我们了解真实情况会有阻碍作用。想象一下,如果一个传统行业普遍衰退,新企业快速生长,出现了「创造性破坏」,而固定样本框调查始终只统计了增速下降的传统部门,无法囊括快速成长的新增企业

2.PMI指数的计算不需要企业给予每个问题量化的回答,只需要回答“改善”、“持平”、“恶化”三项之一即可,由调查者根据三个回答的分布来决定指数数值。但是,这种方案实际上假定了不同回答企业的同质性,当不同回答的企业的各种真实财务指标来自不同的分布时,PMI的数值和整个经济量化的繁荣或衰退会产生一定的偏差。

3.PMI询问的问题包括产量、订单、存货、出口、库存等12个方面。但是,这些问题大部分为了制造业企业的生产情况而设计,服务业企业对这一系列问题存在着大量漏报的现象。无效的指标被纳入统计,其他有效的指标却不被考虑,这意味着PMI也许并不适合度量制造业行业以外的发展情况。

Market Macro Myths

Source:

Market Macro Myths: Debts, Deficits, and Delusions

Hyperinflations, Hysteria, and False Memories

The Idolatry of Interest Rates Part I: Chasing Will-o’-the-Wisp

 

I always think that the ratio of deficit/GDP may not be as danger as people believe. We might see 200% or 300% deficit/GDP as insane just like a thousand years ago people would feel government deficit was unforgivable sin. James Montier holds a similar view and verify it from some simple macroeconomic perspectives.

 

“Sound finance”

Governments should seek to balance their budgets. Or simply not having deficits of more than X% of GDP.

“Functional finance”

government deficits should be judged only by the degree to which they help us reach the goals of macroeconomic policy (generally held to be full employment and price stability)

“The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and its withdrawal of money, shall be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine about what is sound or unsound. This principle of judging only by effects has been applied in many other fields of human activity, where it is known as the method of science… The principle of judging fiscal measures by the way they work or function in the economy we may call Functional Finance.” by Abba Lerner1943 

Why people holds sound finance?

Myth 1: Governments are like households

Over-accumulation of private sector debt is a problem. But this may not apply to governments and their deficits. 

For either nations with monetary sovereign status or nations without, public debt is different from private debt.  [1]

expenditure model of GDP:

Y = C + I + G + (X – M)

income model of GDP:

Y = C + S +T

-> (S – I) = (G – T) + (X – M)

-> if the private sector wishes to save in excess of its investment, then there must be a government deficit and/or a current account surplus.

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1.The private sector generally runs surpluses with the counterpart coming from the government’s fiscal deficits.

2. wherein the private sector has run significant deficits with neither experience ending well.
1st was the TMT bubble, when firms drove the private sector into deficit.
2nd was the housing bubble with households driving the private sector into deficit.

-> The dangers of debt seem accumulated by the private sector rather than the government sector

–> mind-bogglingly large national debt won’t be repaid, given the counterpart nature of the government deficit, the national debt could easily be relabled as national saving.

Myth 2: Printing money to finance budget deficits is inflationary

 

MV = PY

If one is willing to make rather unrealistic assumptions such as velocity and output being fixed, changes in money must cause changes in prices.

PY = C + I + G + (X – M).

-> It is certainly possible that running government deficits can create inflation (if doing so pushes the economy beyond its limits), but so could any other element of GDP (e.g., consumption or investment).

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In neither case of US or Japan, there is any evidence of a strong link between fiscal deficits and inflation. [2]

Myth 3: Budget deficits/high debt lead to high interest rates

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The biggest issue is that the model assumes that savings must precede investment.

“This is a reasonable assumption if you are living in a onecommodity, corn-based economy. If you want to invest in more corn, you must save some corn first. However, when we move to monetary-based economies this ordering is no longer true. Investment can (and does) precede savings in such a system. When you want to invest, you go to the bank and ask for a loan. The bank decides whether or not to grant such a loan, but it isn’t constrained by deposits or reserves. It will make the loan, and then worry about how to ensure regulatory compliance with reserve requirements, etc., afterward.”

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The real world model acknowledges that when a government runs a fiscal deficit, it creates excess reserves at the bank. [3]
-> No bank willingly sits on excess reserves, and so money is lent out in the interbank market.
–> This has the effect of lowering the interest rates towards zero (or to the level that the central bank pays on reserves).

—-> So the prediction from the real world model is that interest rates get driven down by budget deficits, not up as per the loanable funds framework.

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Budget deficits and high debt levels don’t seem to be associated with higher interest rates at all. 
<- weak economic growth is likely to cause both high deficits and low interest rates

Myth 4: Budget deficits are unsustainable

In essence this comes down to whether the real interest rate (r) is higher or lower than the real growth rate (g).

∆d=-s+d*[(r-g)/(1+g)]

s is the primary surplus (the budget position before interest payments), d is the initial level of debt to GDP

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The biggest problem: Is it reasonable to assume that real rates and real growth will be the same for the next 750 years?

And,
because the central bank sets the interest rate, they should pretty much always be able to ensure that the real interest rate is below the real growth rate.

<- The obvious issue for Greece (in the chart above) is that it isn’t monetarily sovereign, and also not fiscally sovereign

Myth 5: Debt is a burden on future generations

“There may well be distributional issues if all of those bonds are owned by, say, the grandchildren of Bill Gates, but these will be intragenerational issues, not intergenerational ones.”

How this matters

1. Given monetary policy is largely impotent with regard to the real economy,  fiscal policy offers a real alternative, if we understand the nature of government debts and deficits.

2. A greater reliance upon fiscal policy rather than monetary policy could also be good news for value investors. 

Reliance on monetary policy as an effective stabilising device would involve…a high degree of instability …in the capital market…The capital market would become far more speculative… longer run considerations of … profitability would play a subordinate role. As Keynes said, when the capital investment of a country “becomes the by-product of the activities of a casino, the job is likely to be ill-done.” — Kaldor, 1958

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Why “business” doesn’t like the idea of fiscal policy?

“The reasons for the opposition of the “industrial leaders” to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment.” by Kalecki 1943 [4]

 

 

[1]

Monetarily sovereign are those that issue their own currencies, have floating exchange rates, and issue debt in their own currency, such as the United States, the United Kingdom, and Japan. While the Eurozone is a prime example of those that lack such sovereign status.

Those nations that enjoy monetary sovereign status can, in effect, borrow from themselves. They have the ability to create money and spend it – essentially ex nihilo. Thus they can’t ever be forced into insolvency.

[2]

The only evidence of any linkage that I could find in the U.S. data was around the time of World War II, when the U.S. was running major deficits due to the war, and then seeing inflation as a result of the shutdown in trade and eventually the return to a peacetime economy with the unleashing of pent-up demand.

[3]

When a government spends it simply tells the central bank to credit the government’s account with funds (created by keystrokes).5 Similarly, when a government taxes, these funds eventually end up as a credit to the government in their account at the central bank.

[4]

Kalecki notes that in a system without significant active fiscal policy, business is in the driver’s seat, and their animal spirits may determine the state of the economy.

On the “dislike of the direction of government spending,” Kalecki notes that industrial leaders hold a “moral principle of the highest importance” to be at stake.

“Under a regime of permanent full employment, the ‘sack’ would cease to play its role as a ‘disciplinary’ measure… ‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders. ”

 

Globalisation: History and Now

 

Source:

Trade globalisation in the last two centuries

Globalization Hits a Wall

Sinking Ships

What Happens When Global Trade Goes Virtual

Maybe This Global Slowdown Is Different

Should Slowing Trade Growth Worry Us?

Global trade plateaus

 

In last post we touched a little bit about the recent cycle of globalisation, and reached some popular reasons for the turing of globalisation, including but not limiting to

“The reorientation of Chinese growth to the domestic market should reduce its dependence on international trade.
Growing inequalities in western countries generate opposition to globalisation.
Renewable energies may reduce trade in hydrocarbons.
The development of foreign direct investment substitutes local production for international trade.”

Today’s post is going to read something further on two sub-topics.

 

History: Two trade globalisation cycle

Most studies based on trade statistics date the emergence of the First Globalisation around 1870.

But Michel Fouquin and Jules Hugot argue that

These studies, however, generally rely on data that begins in 1870.
The most comprehensive bilateral trade dataset to date tells us that the First Globalisation began in Europe in the 1840s, before expanding to other continents later in the 19th century.

If it goes ture, it means some statement can’t be the case

“Technological innovations (oceangoing steamships, transcontinental telegraph) and pro-trade policies (bilateral free trade treaties, the gold standard) of the second half of the 19th century are considered the sparks for globalisation. ”

There data shows some different pictures than we used to think

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1.Export openness ratios (total exports/GDP) doubled between 1827 and 1870 but then stagnated until WWI 

2. The real rally in post-war period did not begin until late 1960s and it is only in the late 1970s that openness returns to the levels already reached a century before.

However trade openness is a crude measure of globalisation.

<- In a world of scattered economic activity, countries are naturally more interdependent.
<- What we call ‘globalisation’ is the convergence between observed world trade and a theoretical situation in which international trade barriers would be equally as constraining as domestic ones.

Therefore the degree of globalisation can be divided to two dimensions

  1. the degree of concentration of the world economy
  2. the degree of international trade barriers

We first deal with the second one

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Aggregate international relative trade costs [1] shows that trade barriers have fallen by more than 70% since 1840.

1. The First Globalisation had therefore already begun in the 1840s, before steamships, the telegraph or the gold standard, and before the wave of bilateral trade treaties signed by Western European countries in the 1860s. This was, however, a period of political stability in Europe after the Congress of Vienna in 1815. [2]

2. In the first cycle, it was shocked since 1914 as we used to believe, but in the second one high protectionism lasted until 1970s [3]

The indication here is that the degree of concentration of the world economy should be increased since 1870s, which impairs globalisation naturally. While the post-war time shows no divergence until very recently.

3. Globalisations are also regionalisations. The more trade grows, the more distance matters.

Globalisation spreads:
the decline of intra-European trade barriers after 1840 preceded the reduction of transatlantic trade barriers that happened around 1890. In Europe, the fall of trade costs in the northwest preceded the fall in the south.

But distance also matters:
In 1830, a 10% difference in the distance between two countries would have reduced bilateral trade on average by 3%. On the eve of WWI, it would have reduced trade by 13%; and in 2010, the reduction would have been 19%.

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The major role of regionalisation is surprising given during both periods of globalisation, nations focused on long-distance trade.
(The First Globalisation was built on colonial trade, and the Second was inspired by European-American and Asian-American trade.)

[4]

Several hypotheses may explain this phenomenon:

  1. pro-trade policies have been primarily adopted between neighbouring partners.
    The post-war integration of Europe is the most obvious example.
  2. regionalisation may also be due to the increased complexity of the goods that are traded. Language and cultural barriers, which are highly correlated to distance, may have become more important.
  3. the fixed costs associated with trade (e.g. information gathering on local preferences, loading and unloading) may also have decreased relative to the actual cost of carrying goods from one country to another, which is strongly linked with distance.

 

 

Now: Globalization hits a wall

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There was a big leap in trade’s share of global GDP in the 1970s when oil prices rose, but otherwise long periods of relative stability.
Then, from 1987 onward, came the era of seemingly unstoppable globalization.
Since the initial bounceback from the last recession, this has no longer been true.

The shipping business suffers most directly recently:

“Of the top 15 container lines that were in operation nine months ago, four have gone out of business or are in the process of doing so.” while “The global container fleet is still getting bigger.” [5]

 

A puzzle

The lack of overall trade growth since 2010 is more of a puzzle, though, and lots of economists have been writing lots of words:
the International Monetary Fund, the World Bank, the Federal Reserve, the European Central Bank and the Bank of Canada, plus a 349-page e-book from the Centre for Economic Policy Research in London.

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Two explanations show up again and again:

  1. The global economy is still really weak, and for a variety of reasons slow-growing economies are less trade-intensive than fast-growing ones. So the trade slowdown is cyclical.
  2. After years of building globe-spanning supply chains with a heavy reliance on China, multinational manufacturers have changed direction and begun moving production closer to consumers.

 

Yes, China is a big reason: 
China, which drove the last decade of globalization, is running out its demographic bonus and trying to rebalance its economy toward services and domestic consumption.

So is a changing of traditional business model:
Automation is reducing the importance of labor-cost differences between countries, and manufacturers are rediscovering that it can be better to make products near customers rather than across the world.

<- Building global supply chains became so fashionable for Western manufacturers that they built them even when it made sense to keep production closer to customers; now they’re retrenching and revising their approach.

And new economy:
Flows of data and information are supplanting flows of goods and money.

 

Let’s check the latter two a bit further, it’s related to the statement like

Maybe people just don’t need as much stuff as they used to. And trade is going virtual. 

“we’re seeing might also be the beginnings of a plateauing in the world’s demand for things — and, even more, the resources needed to make those things.”   [8]

We’d have to see already-affluent people buying fewer things and consuming fewer resources to create shift

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There are signs of a plateau on people buying more physical stuff. And the car sales might peak soon. And China is expected to follow the fall in energy consumption .

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Accordingly, as the McKinseyites say, global economic interaction,  is going virtual:

“Flows of physical goods and finance were the hallmarks of the 20th-century global economy, but today those flows have flattened or declined. Twenty-first-century globalization is increasingly defined by flows of data and information.”

So globalization isn’t done for. It’s just going to look different going forward.

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a. “Now, you would expect some of that cross-border Internet use to show up as trade in services, and some of it clearly does.”

b. “914 million people around the world have at least one international connection on social media.” That could have economic significance – and maybe political significance, too – but it doesn’t amount to a trade flow.

c. Silicon Valley boosters argue that the value of the free services provided by tech companies is being ignored by productivity statistics

Trade in services has kept growing even during the overall trade slowdown, and McKinsey cites an estimate that about 50 percent of services trade is enabled by digital technology  and small companies. [6]

 

The overarching message of  McKinsey Global Institute publications:

1. This is a really really really big deal.

2. It’s going to create lots of new opportunities and new wealth around the world.

3. It’s going to force big, established, deep-pocketed companies to drastically change how they do business  [7].

 

Perhaps we shouldn’t worry about it at all

So, there may have a reasonable limit to how globalized the global economy needs to be, which are not necessarily bad news for the global economy.

Paul Krugman agued early in 2013 that
“Ever-growing trade relative to GDP isn’t a natural law, it’s just something that happened to result from the policies and technologies of the past few generations.”

To him, rapid trade growth since World War II was driven by two great waves of trade liberalization and one major technological innovation.

The first wave of trade liberalization involved industrial countries, and was largely over by 1980:

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The second wave involved the great opening of developing countries:

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Finally, there’s The Box — containerization, which made the vertical disintegration of production, with separate stages carried out in far-distant nations, possible.

The point is that it’s entirely reasonable to believe that the big factors driving globalization were one-time changes, so that we should expect the share of trade in GDP to plateau — and that this doesn’t represent any kind of problem.

 

But things get worse themselves

However, the problem here is that
even if the trade plateau has been brought on by relatively benign natural causes, it could lead to increasingly trade-unfriendly government policies around the world that keep trade down and make things worse. 

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“If global trade has plateaued, then net gains by one nation’s exporters must come at the expense of another nation’s. A global trade plateau enhances the risk of trade tensions, especially in an era when governments of the major trading powers are putting in place so many incentives and financing to promote exports. The risk is that a negative feedback loop could develop: policy may have contributed to the global trade plateau — and we cannot discount that future policy will be shaped by it.”

 

2016/09/19 update

Globalization can also go national:

Many nations lack integrated economic relations within their borders, and thus they could reap high gains from trade by opening up internally.

In China, for instance, there has been a long history of geographical fragmentation.

a) Many barriers to trade across regions still remain in China. For instance state-owned firms, many controlled by provincial authorities, often favor local contractors.

b) Some of these barriers are legal and regulatory, while others stem from lack of trust, physical distance, regional rivalries and missing social networks across regions.

But these days the internet is bringing the whole country’s economy together through Alibaba, WeChat, and other services that ease the online purchase, shipping, and advertising of goods at the national level.

<- Domestic integration is lowering costs, smoothing out price differences and allowing differing cultures and linguistic areas to exchange ideas.

-> The more economically integrated China becomes, the more it may retreat from some kinds of global trade.That will register statistically as a decline in globalization, but actually it is an increase in efficient economic integration.

India also is seeing its different states and regions being tied together through migration, trade, and investment.

 

[1]

The difference between observed trade and a counterfactual in which there would be no international trade barriers then reveals the aggregate cost that is specifically associated with international trade. These costs come from transportation and protectionist policies, but also factors like communication and exchange rate volatility (Jacks et al. 2008).

[2]

In the mid-19th century there were also unilateral reductions of trade protection, for example the repeal of the British Corn Laws in 1846. We found similar examples in other European countries. In the 1870s the Russian and American ‘grain invasion’ prompted higher tariffs in most of continental Europe. Trade costs, however, kept falling during this protectionist backlash, which suggests that it was compensated by the decline of other trade barriers.

[3]

After 1918, totalitarian regimes emerged in the USSR, Italy and Germany, and the protectionist measures that were adopted after the Great Depression condemned any possibility of returning to the liberal golden age.

High protectionism lasted until after WWII and the adoption of the GATT in 1947, which created multilateral liberalisation among developed economies. The Treaty of Rome (1957) began European integration, and internal customs barriers were abolished altogether in 1968. Finally, the generalisation of containerisation in the 1970s reduced transport costs.

[4]

The rise of international trade during the 19th century was supported by European liberal trade policies and, later, by technological improvements in transportation and communication. The Great Depression and the two world wars challenged this trend, while trade was partly reallocated to more distant partners due to geostrategic reasons and European colonialism. Both globalisation and regionalisation resumed in the 1960s.

But regionalisation has recently been fading, as the WTO has grown to include almost all countries in the world. The conversion of emerging and former socialist countries to free trade in the 2000s has stimulated long-distance trade.

[5]

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Container shipping is certainly getting more concentrated than it was. That shift to a less competitive market ought to provide some help in lifting container rates.

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The problem for lines is that reduced competition hasn’t been enough to juice container rates back into positive territory.

There’s simply not enough trade going on to fill all the ships on the ocean. The value of global goods exports touched its lowest level in six years in February and has been running at subdued levels all year, according to the International Monetary Fund.

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Shipping lines have two main options to survive this hurricane.

1.They can sit tight, hope their debts don’t overwhelm them in the way that Hanjin’s and Hyundai Merchant’s have done, and trust that trade will eventually recover and start filling their holds again.

2.The shorter route back to profitability will be to reduce the size of the fleet by turning some of those excess ships into scrap metal — but that will take a while.

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[6]

And cross-border connectivity is changing the composition of the global goods trade, with e-commerce allowing smaller companies to go global:

“The increasing globalization of small businesses is starting to show up in national statistics. It is most clearly seen in the United States, where the share of exports by large multinational corporations dropped from 84 percent in 1977 to 50 percent in 2013.”

[7]

meaning that they should probably hire a bunch of management consultants to help them figure it out.

“The convergence of globalization and digitization means that the world is changing rapidly—and business leaders will need to reassess their organization, strategy, assets, and operations accordingly. The approaches that worked for going global even ten years ago may no longer be relevant.”

[8]

After all, the latest United Nations population projections, released in July, do indicate that we may be nearing a plateauing of the number of people on the planet.

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Still, in the median forecast, the plateauing won’t happen till the end of the century. It’s possible that it won’t happen at all. Also, there are still billions of people around the world hoping to emerge from poverty and consume more things and resources.

[9]

The decline in Chinese demand for natural resources during 2014 has been one of the main things prompting observers to wonder if the country is undergoing a much-sharper economic slowdown than the official numbers indicate. It may well be.

-> But this also could be evidence of the Chinese economy’s shift away from resource-intensive manufacturing and infrastructure-building and toward providing services for Chinese consumers.

In general, developing countries are making the switch from goods to services much earlier in their development than the U.S. and Europe did. This may not be all good news; economist Dani Rodrik worries that it might make it harder for them to catch up with wealthy countries.

 

The globalization is dying

Source:

THE DYING BIRD OF GLOBALIZATION

The tide of globalisation is turning

Why Has Trade Stopped Growing? Not Much Liberalization and Lots of Micro-Protection

The global economy will never be the same again

高柏:新发展主义与古典发展主义——中国模式与日本模式的比较分析

 

First, let’s agree with this:

Trade – free exchange between individuals – is mutually beneficial.
It’s not a competition between nations, it’s not a ‘global race’, and it’s not a winner-take-all game of international treaty poker. The whole bloody point is that both participants gain.

But, rather than overstating the threat to free markets that come from politics, we might better regard globalisation as a century-long cycle and the turning tide as nothing but a natural process just like live and death.

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A simple History Review

For six decades after the WWII (1945 to 2005), unprecedented growth of trade in goods and services and spectacular expansion of foreign direct investment (FDI) were powerful drivers of the best half-century in human history.

Global trade maintained an annual growth rate of 6 percent in real terms, while the global stock of FDI grew at 15 percent annually in nominal terms between 1980 and 2005.

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It looks like the impetus towards further economic integration has stalled and in some respects gone into reverse.
Globalisation is no longer driving world growth.

 

A simple answer to: Why have global trade and investment not rebounded as they did after past recessions?

less liberalization & more micro-protection

Reductions in trade barriers is lagged

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And imposition of local content requirement measures affects global trade in goods and services, reducing global exports.

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Above all, important segments of the western public no longer believe increased trade benefits them.

 

But as we have argued at very first, the reverse (if true) would not be the first time since the industrial revolution.

A (if not the first) period of globalisation, in an era of empires, occurred in the late 19th century.
The first world war ended this and the Great Depression destroyed it.

A principal focus of US economic and foreign policy after 1945 was to recreate the global economy, but this time among sovereign states and guided by international economic institutions.

Let’s see the picture again, and think again

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A. Part of the reason for the slowdown can be that many opportunities are radically diminished.

When, for example, the production of essentially all labour-intensive manufactures has moved out of the rich countries, the growth of trade in such products must fall.

Just review what we have learned here about new pattern of labour growth 

B. Maybe we have just produced too much

We have China, the biggest investment boom in the history of the world, to blame for, which affects the demand for many commodities.

See herehere and the whole business model is changing, see here and here.

C. the end of once-in-a-lifetime global credit boom is sure to lead to a decline in the cross-border holdings of financial assets.

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D. after decades of FDI, a host of companies with something to gain from it will have taken their opportunity and succeeded or, in important cases, failed.

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There are just nothing lucrative

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E. The world has reached a demographic peak.

“In the modern era it seems that ever since the beginning of the 1980s the global economy has been dominated by globalisation and also a complimentary and massive change in demographics … We will argue that this era is close to being over and the economic, political, policy and asset trends that accompanied it could soon start to reverse.”

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A surge in high earning, high spending workers to dramatically increase the global productivity ratio is a base of globalisation since 1980.

China – cheap labour force – is an one-off factor for globalization and yet no substitution appears.

 

Anyway,

At a time of poor economic performance in leading countries, aging, rising inequality and big shifts in the balance of global power, another collapse must be a possibility.

Recently, even tech giants begin to suffer this 

 

Despite we have just discussed, a way simple answer may be behind the history

During the turning of globalisation from 1910s, there were governments relentlessly printing currency in order to gathering money.

History does not repeat itself, but it rhymes. 

And still referring to the history, some would argue the resurgence always requires a hegemonic power: the UK before 1914 and the US after 1945, or even China after 1980s.

It may take long times.