歐盟議會(huì)-后疫情時(shí)代中長期的貨幣政策挑戰(zhàn)（英文）-2021.03-44正式版-WN4

STUDY

RequestedbytheECONcommittee

MonetaryDialoguePapers,March2021

ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

PolicyDepartmentforEconomic,ScientificandQualityofLifePoliciesDirectorate-GeneralforInternalPolicies

Author:MarekDABROWSKIENPE658.221-March2021

ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

MonetaryDialoguePapers

March2021

Abstract

TheeconomiccharacteristicsoftheCOVID-19crisisdifferfromthoseofpreviouscrises.Itisacombinationofdemand-andsupply-sideconstraintswhichledtotheformationofamonetaryoverhangthatwillbeunfrozenoncethepandemicends.Monetarypolicymusttakethiseffectintoconsideration,alongwithotherpro-inflationaryfactors,inthepost-pandemicera.Itmustalsothinkinadvanceabouthowtoavoidapolicytrapcomingfromfiscaldominance.

ThispaperwasprovidedbythePolicyDepartmentforEconomic,ScientificandQualityofLifePoliciesattherequestofthecommitteeonEconomicandMonetaryAffairs(ECON)aheadoftheMonetaryDialoguewiththeECBPresidenton18March2021.

ThisdocumentwasrequestedbytheEuropeanParliament'scommitteeonEconomicandMonetaryAffairs(ECON).

AUTHOR

MarekDABROWSKI,CASE–CenterforSocialandEconomicResearch

ADMINISTRATORRESPONSIBLE

DrazenRAKIC

EDITORIALASSISTANT

JanettaCUJKOVA

LINGUISTICVERSIONS

Original:EN

ABOUTTHEEDITOR

Policydepartmentsprovidein-houseandexternalexpertisetosupportEuropeanParliamentcommitteesandotherparliamentarybodiesinshapinglegislationandexercisingdemocraticscrutinyoverEUinternalpolicies.

TocontactthePolicyDepartmentortosubscribeforemailalertupdates,pleasewriteto:

PolicyDepartmentforEconomic,ScientificandQualityofLifePolicies

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L-2929-Luxembourg

Email:

Poldep-Economy-Science@ep.europa.eu

Manuscriptcompleted:February2021

Dateofpublication:March2021

?EuropeanUnion,2021

Thisdocumentwaspreparedaspartofaserieson“RecalibratedMonetaryPolicyInstrumentstoAddresstheEconomicFalloutfromCOVID-19”,availableontheinternetat:

https://www.europarl.europa.eu/committees/en/econ/econ-policies/monetary-dialogue

DISCLAIMERANDCOPYRIGHT

TheopinionsexpressedinthisdocumentarethesoleresponsibilityoftheauthorsanddonotnecessarilyrepresenttheofficialpositionoftheEuropeanParliament.

Reproductionandtranslationfornon-commercialpurposesareauthorised,providedthesourceisacknowledgedandtheEuropeanParliamentisgivenpriornoticeandsentacopy.

Forcitationpurposes,thepublicationshouldbereferencedas:Dabrowski,M.,ThinkingBeyondthe

Pandemic:MonetaryPolicyChallengesintheMedium-toLong-Term,PublicationforthecommitteeonEconomicandMonetaryAffairs,PolicyDepartmentforEconomic,ScientificandQualityofLifePolicies,EuropeanParliament,Luxembourg,2021.

ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

CONTENTS

LISTOFFIGURES

4

LISTOFTABLES

4

LISTOFABBREVIATIONS

5

EXECUTIVESUMMARY

7

1.

INTRODUCTION

8

2.THEECONOMICCHARACTERISTICSOFTHECOVID-19PANDEMIC

10

2.1.

ThedynamicsoftheCOVID-19pandemicanditsprospects

10

2.2.

ThelimitedstateofknowledgeontheCOVID-19pandemic,itsimpactonpandemic

management,andeconomicactivity

12

2.3.

CharacteristicsoftheCOVID-19economiccrisis

13

2.4.

Crisisimplicationsformonetaryandfiscalpolicies

14

3.MONETARYPOLICYDECISIONS2019-2021ANDTHEIRSHORT-TERMIMPACT

17

3.1.

MonetarypolicydecisionsoftheECB

17

3.2.

MonetarypolicydecisionsoftheFedandBoJ

19

3.3.

ImpactofmonetarypolicydecisionsonCBbalancesheetsandmoneysupply

20

3.4.

QEandanimpairedmonetarytransmissionmechanism

23

3.5.

Monetaryconditionsoutsidemajorcurrencyareas

24

3.6.

CPIinflationandchangesinassetprices

25

3.7.

Thenexusbetweenmonetaryandfiscalpolicies

30

4.CHALLENGESFACEDBYCENTRALBANKSAFTERTHEPANDEMIC

31

4.1.

Thepotentialreturnofinflationarypressures

31

4.2.

Increasingfiscaldominance

33

4.3.

Riskstofinancialstability

34

5.

CONCLUSION

35

REFERENCES

37

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LISTOFFIGURES

Figure1:COVID-19pandemic:dailynewcases(leftpanel)anddailydeaths(rightpanel)inthe

world,inthousands,2020-2021

10

Figure2:

CumulativeCOVID-19vaccinationdosesadministeredper100people(logarithmic

scale),01.01.2021–11.02.2021

11

Figure3:

Grosshouseholdsavingrate,in%ofGDP,2017-2020

14

Figure4:

ECBnetassetpurchasesinEURbillion,March2015–January2021

18

Figure5:

PEPP:totalbimonthlynetassetpurchases,inEURmillion,March2020–January2021

18

Figure6:

SecuritiesheldoutrightbytheFed,inUSDmillion,January2019–February2021

20

Figure7:

CBtotalassets,January2019–December2020

21

Figure8:

Majorcurrencyareas:CBbalancesheetsas%ofnominalGDP

21

Figure9:

Majorcurrencyareas:broadmoney,March2019–December2020(quarterlydata)

22

Figure10:

CompositebanklendingratesforNFCsandhouseholdsintheeuroarea,annualin%,

2014-2020

22

Figure11:

Moneymultiplier(broadmoneytomonetarybase)inmajorcurrencyareas2019-202023

Figure12:

CBliabilitiestootherdepositorycorporations,majorcurrencyareas,2019-2020

24

Figure13:

12-monthinflationinmajorcurrencyareas,in%,2019-2021

25

Figure14:

PriceofcrudeoilWTI,inUSDper1barrel,2020-2021

26

Figure15:

Measuresofunderlyinginflationintheeuroarea,12-monthratein%,2019-2020

27

Figure16:

USDowJonesIndustrialAverage(left-handscale,blueline)andEuroStoxx50Market

Index(right-handscale,blackline),18February2020-18February2021

28

Figure17:

US(left-handscale,blueline)andeuroarea(right-handscale,blackdottedline)

NominalHomePricesIndexes,18February2020-18February2021

28

Figure18:

PriceofgoldinUSDfor1troyounce,2016-2021

29

Figure19:

PriceofBitcoininUSDfor1unit,2016-2021

29

LISTOFTABLES

Table1:

Euroarea,Japan,andtheUnitedStates:generalgovernmentgrossdebt,%ofGDP,

2007-2019

15

PE658.221 4

ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

LISTOFABBREVIATIONS

ABSPP Asset-backedsecuritiespurchaseprogramme

AEs Advancedeconomies

APP Assetpurchaseprogramme

BoJ BankofJapan

CARES CoronavirusAid,Relief,andEconomicSecurity(Act)

CB Centralbank

CBPP3

Thirdcoveredbondpurchaseprogramme,

CDSs Collateraldefaultswaps

COVID-19 CoronavirusDisaease2019

CPI ConsumerPriceIndex

CSPP Corporatesectorpurchaseprogramme

DFR Depositfacilityrate

EA Euroarea

ECB EuropeanCentralBank

EM Emergingmarket

ETFs Exchange-tradedfunds(inJapan)

EU EuropeanUnion

EUR Euro

Fed FederalReserveBoard(oftheUnitedStates)

FFR FederalFundRate

FOMC FederalOpenMarketCommittee

GDP Grossdomesticproduct

GFC Globalfinancialcrisis

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HICP Harmonisedindexofconsumerprices

IMF InternationalMonetaryFund

JPY Japaneseyen

J-REITS Japaneserealestateinvestmenttrusts

MLFR Marginallendingfacilityrate

Moneymultiplier

MRO Mainrefinancingoperations(rate)

NFCs Non-financialcorporations

PSPP PublicSectorPurchaseProgramme,,

PSBR Publicsectorborrowingrequirement

PELTRO PandemicEmergencyLonger-TermRefinancingOperations

PEPP PandemicEmergencyPurchaseProgramme

QE Quantitativeeasing

TLTRO TargetedLonger-TermRefinancingOperations

UPMs Unconventionalpolicymeasures

USD UnitedStatesdollar

VAT ValueAddedTax

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ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

EXECUTIVESUMMARY

InFebruary2021,oneyearaftertheoutbreakoftheCOVID-19pandemic,itishardtoseeitsquickend,despitethedevelopmentofvaccinesandthebeginningofamassvaccinationprogramme.Fightingthepandemicmaytakelongerandcostmore(intermsofnumberofdeaths;GDP;andfiscal,job,andpersonalincomelosses,amongothers)thanoriginallyexpected.Worse,theknowledgeonthewaysandspeedofthespreadofcoronavirusremainslimited,whichforcesgovernmentstorelyontrialanderrorinadoptingcontainmentmeasures.Obviously,thisincreaseseconomicuncertainty.

TheeconomiccharacteristicsoftheCOVID-19crisisdifferfromtheglobalfinancialcrisisof2007-2009andotherpastfinancialcrisesandbusinesscycledownturns.Itisacombinationofdemand-andsupply-sideshocksthatledtotheformationofforcedsavingandmonetaryoverhang.Despitethisdifference,governmentsandcentralbanksreactedwithamassivefiscalandmonetaryrelaxation(astheydidin2007-2009),whichwascostlyandnotsufficientlytargeted.

Theintensificationofassetpurchasingprogrammeswasthemainpolicytoolthatcouldbeusedbycentralbankstofurthereasetheirmonetarypolicies.However,theyonlypartlyachievedtheirdeclaredgoal,thatis,increasingtheliquidityofeconomicagents.Partoftheadditionalmonetarybasereturnedtocentralbanksintheformofvoluntarydepositsfromcommercialbanks,repeatingtheexperienceofquantitativeeasinginthe2010s.Thisconfirmsthatassetpurchasingprogrammesareanimperfectmonetarypolicytoolthatweakensfinancialintermediationandimpairsthemonetarypolicytransmissionmechanism.

Quantitativeeasingalsoincreasesthestockofgovernmentsecuritiesincentralbankbooks(defactodebtmonetisation),leadingtofiscaldominanceandnarrowingtheroomformanoeuvreofmonetarypolicywhenthelatterneedstobetightened.Eventually,thismaycompromisecentralbankindependenceandmakethemtolerantofhigherinflation.

Monetarytighteningmaybecomenecessaryoncethepandemicendsandtheaccumulatedmonetaryoverhangisunfrozen.Higherinflationarypressurescanalsobegeneratedbyotherfactorssuchasovershootingstimuluspackages,supplybottlenecks,theexpiringdeflationaryimpactoftighterfinancialregulations,demographicchanges,deglobalisation,andthedeteriorationoffiscalbalances.

Governmentsandcentralbanksshouldthinkaheadabouthowtoavoidapolicytrapcausedbyrapidlygrowingpublicdebtanditsdefactomonetaryfinancing,especiallyinthecontextofthepotentialreturnofinflationarypressures.Theyshouldcarefullybalancetheshort-termneedsoffightingthepandemicanditsadversesocio-economicconsequencesandthelong-termconstraintsandchallenges.

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1. INTRODUCTION

Inthefirstquarterof2020,theCOVID-19pandemichittheentireworldeconomyinanunexpectedway.Ayearlater(February2021),itishardtoseeitsquickend,despitehavingdevelopedvaccinesandbegunamassvaccinationprogrammeinseveraladvancedeconomies(AEs).

Mostgovernmentsrespondedtotheoutbreakofthepandemicwithstrictlockdownmeasurestoprotectpeoples’livesandtolimitthecontagioneffect.Clearly,thepandemicitselfandtheaccompanyinglockdownmeasuresheavilydamagedeconomicactivity.Governmentshadtoofferfinancialreliefbothtosufferingbusinessesandthepopulationatlarge.Togetherwiththecostsoffightingpandemics,foregonerevenue(theeffectofthepandemic-relatedrecession)andattemptstoboostaggregatedemand,ithasledtoahugeexpansionofbothfiscaldeficitandpublicdebt.

Majorcentralbanks(CBs),ontheirown,respondedtothecrisiswithanewroundofmonetaryrelaxation.Infact,ithadalreadystartedin2019,wellbeforethepandemic.Thepandemiconlyacceleratedandmagnifiedaneasingresponse.BecauseCBinterestratesremainedeitherlow(theFederalReserveBoardoftheUnitedStates,henceforththeFed),zero,orevennegative(theEuropeanCentralBank[ECB]andtheBankofJapan[BoJ]),monetaryrelaxationhashadtorelylargelyonassetpurchasingprogrammes(APPs),popularlycalledquantitativeeasing(QE).Itsdeclaredintentionhasbeentoprovideadditionalliquiditytopandemic-stressedbusinessesandconsumersandmeetthedeclaredannualinflationtargetof2orcloseto2%,dependingonthecurrencyarea.Alessdeclaredorundeclaredpolicygoal,especiallyinthecaseoftheECB,hasbeentohelpgovernmentstofinancetheirfreshdeficitsandrollovertheexistingstocksofpublicdebt,insomecasesachallengingtasklongbeforethepandemic(thinkaboutJapanandsomeeuroareacountries).

Whatcouldbeseenasarelativelyshort-termdistressintheearly2020snowlookslikealongercrisisepisode.WhilethestrictlockdownmeasureswererelaxedinmostcountriesoftheNorthernHemisphereattheendofthesecondandbeginningofthethirdquarterof2020,thenextwavesofthepandemiccreatedthenecessitytoreintroducethem,althoughinamoreselectiveandtargetedway.Duetodifficultiesinpredictingthelengthofthepandemicanditsprobableenddate,economicdecisionsonboththemacroandmicrolevelsareburdenedwithahighdegreeofuncertainty.

Againstthisbackground,CBscontinuetheirexpansionarymonetarypoliciesbyextendingtheperiodofunconventionalpolicymeasures(UPMs)andexpandingthesizeofAPPs.Forexample,on10December2020,theECBGoverningCouncilapprovedapackageofdecisionsextendingtheiranti-crisismeasurestakenin2020formostof2021(ECB,2020).ThehugeincreaseofCBbalancesheetsisoneofmajorresultsoftheseexpansionarypolicies.Itmayleadtoaninflationarypressureinthepost-pandemicperiod(oncethelockdownmeasuresend)evenifthecurrentconsumerpriceinflation(CPI)remainsverylow,asinthecaseoftheeuroarea.Therearealsootherrisksassociatedwiththecontinuationofextra-loosemonetarypolicies,suchasbuildingassetbubbles,theengagementoffinancialinstitutionsinlessprudenttransactions,distortingafinancialsectorbusinessmodel,increasingincomeandwealthinequalities,andothers.

Inthecurrentcircumstances,CBsdonotseemtoputsufficientattentiontothesesideeffectsandremainratherunpreparedtorespondtotheriskofinflationarypressurequicklyenough.Furthermore,theirdefactoincreasingengagementinpublicdebtfinancing(evenifcarriedoutviasecondarymarketpurchaseswithonlymonetarypolicyconsiderationsinmind)canmakethemhostagesofquicklyexpandingfiscalimbalances.Insuchcircumstances,shrinkingtheirbalancesheetscanbepoliticallydifficult.

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ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

Thepurposeofthisbriefingpaperistwofold:(i)toassesstheanti-crisismonetarypolicymeasurestakenbytheECBin2019-2020,includingtheirlastpackageofDecember2020,and(ii)tolookbeyondanimmediateCOVID-19-relatedpolicyhorizonbyanalysingmonetarypolicychallengesinthemedium-tolong-term.

Ourworkinghypothesisisthattheanti-crisismeasuresoftheECBandothermajorCBsareonlypartlyeffectiveinachievingthedeclaredgoals.Ontheotherhand,theymayproducevariousunintendednegativesideeffects–inparticular,theincreasingmonetarypolicydependenceonfiscalimbalancesandrapidlygrowingpublicdebt.ThismaycompromiseboththeindependenceofCBsaswellastheirabilitytoeffectivelyresistpost-pandemicinflationarypressures.

Thestructureofthepaperissubordinatedtoitsdeclaredanalyticalpurpose.Chapter2dealswiththeeconomiccharacteristicsoftheCOVID-19pandemicanditsimpactontheeffectivenessofthemonetarypolicyresponsemeasuresundertaken.InChapter3,weanalysethemonetarypolicydecisionsoftheECB(andothermajorCBsforcomparison)andtheireffectivenessinachievingthedeclaredpolicygoalsintheshortterm.Chapter4isdevotedtoananalysisofthepolicychallengeswhichmaybefacedbytheECBandothermajorCBsoncethepandemicemergencycomestoitsend.Chapter5containsasummaryandtheconclusionsofouranalysis.

Inouranalysis,weusethedatasourcesoftheInternationalMonetaryFund(IMF),Eurostat,theECB,theFed,Worldometer,OurWorldinData,andthosecollectedbyotherresearchers.

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THEECONOMICCHARACTERISTICSOFTHECOVID-19PANDEMIC

Inthischapter,weanalysethedynamicsoftheCOVID-19pandemicanditsprospects(Section2.1);thestateofknowledgeonthepandemic,itsmanagement,anditseconomicrepercussions(Section2.2);thenatureoftheeconomiccrisiscausedbythepandemicandhowitdiffersfrompreviouscrises,inparticular,theglobalfinancialcrisis(GFC)of2007-2009(Section2.3);anditsimplicationsformonetaryandfiscalpolicies(Section2.4).

2.1. ThedynamicsoftheCOVID-19pandemicanditsprospects

Tounderstandtheeconomicimpactofthepandemicintheshortandmedium-tolong-term,wemustfirstanalyseitsactualandfuturedynamics.

ThefirstcasesofthenewCOVID-19infectionwereregisteredintheChinesecityofWuhaninDecember2019.InlateFebruaryandearlyMarch2020,itspreadtoEuropeandtheUnitedStates.Ayearlater,atthetimeofwritingthispaper(February2021),thefiguresfordailynewcasesanddeathsworldwide(Figure1)remainhigh.ThefigureswereincreasingrapidlyuntilJanuary2021.Asof11February2021,thetotalnumberofidentifiedCOVID-19casesexceeded108millionandtotalnumberofCOVID-19-relateddeaths–2.3million

1

.

Figure1: COVID-19pandemic:dailynewcases(leftpanel)anddailydeaths(rightpanel)intheworld,inthousands,2020-2021

Source:Worldometers,

/coronavirus/.

SeeWorldometers,Coronaviruscases,

/coronavirus/.

PE658.221 10

ThinkingBeyondthePandemic:MonetaryPolicyChallengesintheMedium-toLong-Term

Predictingthepandemic’sdynamictowardstheendof2021isariskyandhighlyspeculativetask,especiallygiventhenewmutationsofCOVID-19(theso-calledBritish,SouthAfrican,Brazilian,andCalifornianones–seeLancetCOVID-19Commission,2021),whichwereidentifiedattheendof2020andinearly2021.Insuchasituation,onecannotruleoutnewwavesofhigh-intensityinfectionsin2021andperhapsbeyond.

Throughout2020,theavailabilityofavaccinewasseenasthepotentialturningpointinfightingcoronavirus.Whenseveralvaccinesbecameavailableattheend2020,itturnedoutthattheirproductionanddistribution,aswellasthevaccinationprocessitself,wouldtakeafewyearstocovertheentireworldpopulation.AccordingtotheEIU(2021)forecast,onlytheEU,theUnitedStates,andafewsmallercountries(Israel,UnitedArabEmirates,Bahrain,Singapore,HongKong,andTaiwan)havethechancetocompletemassvaccinationtowardstheendof2021.Inotherregionsoftheworld,vaccinationwilltakemoretime,until2023andbeyond(mostofAfrica).Insuchasituation,thinkingaboutachievingherdimmunityagainstCOVID-19isunrealistic(Dadush,2021;Krueger,2021),especiallywhenthecoronavirusismutating.

Theavailablestatisticsconfirmthatthevaccinationcampaignisrollingoutslowly,exceptfromafewsmallcountries(Israel,UnitedArabEmirates,andBahrain)andtheUnitedKingdom(whichoutperformsboththeUnitedStatesandtheEU)–seeFigure2.

Figure2: CumulativeCOVID-19vaccinationdosesadministeredper100people(logarithmicscale),01.01.2021–11.02.2021

Note:Countedasthenumberofsingledoses,whichmaynotbeequaltothevaccinatedindividuals.

Source:OurWorldinData,Coronavirusvaccinations,

/covid-vaccinations.

Theaboveoverviewsuggeststhatthepandemicmaynotendquickly,andtheworldeconomymayhavetooperateinextraordinarycircumstancesforalongerperiodoftime.

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2.2. ThelimitedstateofknowledgeontheCOVID-19pandemic,itsimpactonpandemicmanagement,andeconomicactivity

Despitemorethanayearofexperienceinfightingthepandemic,thestateofknowledgeonitsactualsize,geographicalspread,mechanismsoftransmission,andeffectivecontainmentmeasuresremainslimited.Inthissection,weconcentrateonthoseaspectsofanti-pandemicmanagementwhichhaveanexpliciteconomicimpact,leavingasidepurelymedicalandpublichealthproblems.

TheuncertaintystartswiththeactualnumberofinfectionsandeventhenumberofCOVID-19-relatedfatalities.Thereasonforthisisrelatednotonlytotheimperfectionsofreportingsystemsinindividualcountriesbutalsotodifficultiesinaccuratelydiagnosingcaseswithoutabroad-basedtestingsystem,whichispresentinonlyafewcountries.Thereisalsoalargenumberofasymptomaticcases,especiallyinyoungercohortsofthepopulation,whicharedifficulttoidentifyevenwiththehelpofbroad-basedtestingsystems.Therefore,onecanspeculatethattheactualnumberofinfectionsisafewtimeslargerthanwhatisofficiallyrecorded.

Anevenmorelimitedknowledgeconcernstheexactchannelsofdiseasecontagion.Whileitwasclearfromtheverybeginningthatkeepingphysicaldistancebetweenpeople,limitingdirectperson-to-personcontact,andusingfacemaskscanslowdowntheproliferationofthepandemic,theseactionshadtobetranslatedintoconcreteprotectionmeasuresaimedatprohibitingorlimitingvarioustypesofactivities.Inchoosingconcretecontainmentmeasures,knowledgeonthefactorsfacilitatingthespreadofcoronavirus(forexample,indoorversusoutdooractivities,weatherconditions,theseasonalityofinfections,andtheroleofschools,amongothers)playsadecisiverole.However,suchknowledgeiseitherlackingorverylimitedanduncertain.Furthermore,therearedifficultiesexplainingcross-countrydifferencesinthenumberofinfectionsanddeaths,whichcouldhelpunderstandthefactorsresponsibleforthecontagionandevaluatetheeffectivenessofvariousanti-pandemicstrategies.

Thelimitedstateofknowledgedeterminesthepolicyresponsestothecrisis,whicharebased,inmostcases,ontrialanderror.Thisapproachisreflectedinthestop-gopolicycarriedoutinmostcountries.

Thepolicyresponsebeganwithfar-reachingandratheruntargetedcontainmentmeasuresinmostofEuropeandtheUnitedStates

2

attheendofthefirstquarterandbeginningofthesecondquarterof2020withthehopethattheywouldstopthespreadofcoronavirusandstopthepandemicinarelativelyshortperiodoftime.Whenthehugeeconomiccostsofmasslockdownsbecameevident(GDPdeclinewaspositivelycorrelatedwithstringencyofcontainmentmeasures–seeIMF,2020;Marcusetal.,2021)andthefirstwaveofpandemicseemedtobeoverin