Archive: Publikationen

Gunther Schnabl; Tim Sepp

Abstract

30 Jahre nach dem Mauerfall wurde keine volle Konvergenz der Wirtschaftsleistung und der Lebensverhältnisse zwischen Ost- und Westdeutschland erreicht. Das Papier zeigt die unvollständige Konvergenz bei Produktivität, Einkommen, Steueraufkommen und Vermögen auf. Es diskutiert mögliche Gründe wie das Erbe der Planwirtschaft, wirtschaftspolitische Fehler bei der Wiedervereinigung sowie die ungleiche Konzentration von großen Unternehmen. Darauf aufbauend werden die Hartz-Reformen, die regionalen Verteilungseffekte einer zunehmend lockeren europäischen Geldpolitik sowie der schleichende Verlust einer marktwirtschaftlichen Ordnung als alternative Ursachen für die unterbrochene Konvergenz diskutiert. Daraus werden wirtschaftspolitische Empfehlungen für eine Konvergenz der Wirtschaftskraft in Ostdeutschland abgeleitet.

Erschienen in

List Forum für Wirtschafts- und Finanzpolitik volume 45, pp. 397–421 (2020).

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Gunther Schnabl; Nils Sonnenberg

Abstract

The paper analyses in light of Austrian and Keynesian economic theory the impact of conventional and unconventional monetary policies as therapies for financial crises. It compares the financial market stabilization measures of the Federal Reserve System and the European System of Central Banks in response to the US subprime crisis and the European financial and debt crisis. It is shown that the Federal Reserve System’s crisis measures were more directed towards stabilizing the banking system, whereas the European Central Bank had a stronger focus on the stabilization of the debt affordability of euro area crisis countries. In both cases, household credit growth remained under control despite renewed monetary expansion, while new imbalances emerged in the corporate sector. In the euro area, loose monetary policy had a destabilizing impact on the financial sector.

Keywords: financial crisis, Financial cycles, financial stability, Hayek, Keynes, Monetary policy.

JEL Codes: B53, E12, E14, E30, E44, E58, G10, G20, H30, H50.

Erschienen in

Working Paper, No. 166.

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Karl-Friedrich Israel; Sophia Latsos

Abstract

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 through an increase in working time of women relative to men, but also to increasing the education pay gap. These effects may have materialized via the aggregate demand channel and the labour productivity channel. In contrast, expansionary monetary policy has had no significant impact on the development of the age pay gap.

Keywords: income inequality, Japan, low interest rate policy, Monetary policy, unconventional monetary policy.

JEL Codes: D31, D63, E52, E58.

Erschienen in

Applied Economics Volume 52, 2020 - Issue 40.

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Gunther Schnabl; Sebastian Müller

Abstract

The paper analyzes the effects of the increasingly expansionary monetary policies on the economic order in Europe and the European integration process. It is argued that a liberal market order and a tight monetary policy stance shaped in postwar Germany and in United Kingdom have long served as cornerstones for growth, prosperity and social cohesion in Europe. A prolonged loose monetary policy stance of the European Central Bank has undermined these orders, thereby diminishing productivity gains and growth. Combined with negative distribution effects, those monetary policies constitute the breeding ground for divergence forces in the European Union as heralded by the Brexit.

Keywords: Brexit, divergence, economic order, European Integration, Friedrich August von Hayek, inequality, Ludwig Erhard, Margret Thatcher, Monetary policy, political polarization.

JEL Codes: B25; E58; E65.

Erschienen in

The Economists’ Voice, 16(1).

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Gunther Schnabl

Abstract

Twenty years after the introduction of the euro, the European Monetary Union (EMU) is at its crossroads. Following the outbreak of the European financial and debt crisis in 2008, the European Central Bank (ECB) took comprehensive measures to stabilize the common currency. Interest rates were cut to and below zero and several asset purchase programs have inflated the ECB balance sheet (Riet 2018). Within the European System of Central Banks, large imbalances have emerged via the TARGET2 payments system, which can be seen as quasi-unconditional credit in favor of the southern euro area countries (Sinn 2018).

Erschienen in

Cato Journal, Vol. 39, No. 3 (Fall 2019)..

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Gunther Schnabl

Abstract

For a long time, China's impressive growth performance has been driven by investment and high productivity gains. Based on a discussion of possible overcapacities and overinvestment in China, this paper investigates the sustainability of China's investment and export‐driven growth model. Since the turn of the millennium, buoyant capital inflows and low interest rates have been at the root of overinvestment and misallocation of capital, which necessitated export subsidies to clear markets. The overinvestment boom is argued to have ended around 2014. Since then, the overcapacities have weakened China's bargaining position in the US–Chinese trade conflict and have tempted Chinese authorities to postpone the restructuring of the Chinese economy by providing low‐interest credit. The gradual reemergence of quasi‐soft budget constraints is seen to undermine China's long‐term growth potential.

Keywords: credit growth, overinvestment, rebalancing, soft budget constraints, trade policy, zombification.

JEL Codes: E22, E43, E58, F13.

Erschienen in

China & World Economy, Vol. 27, Issue 5, pp. 37-62, 2019.

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Gunther Schnabl

Abstract

This chapter analyzes the evolution and effects of central bank crisis management since the mid-1980s based on a Hayek-Mises-Wicksell overinvestment framework. It is shown that given that the traditional transmission mechanism between monetary policy and consumer price inflation has collapsed, asymmetric monetary policy crisis management implies a convergence of interest rates toward zero and a gradual expansion of central bank balance sheets. From a Wicksell-Hayek-Mises perspective, asymmetric central bank crisis management has contributed to financial market bubbles, decreasing marginal efficiency of investment, increasing income inequality, and declining growth dynamics. The economic policy implication is a slow but decisive exit from ultra-expansionary monetary policies.

Keywords: Economic Theory, Economics and Finance, Financial Economics, Macroeconomics and Monetary Economics, Mathematical Models.

JEL Codes: E520, E580, E630, F420.

Erschienen in

The Oxford Handbook of the Economics of Central Banking.

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Pablo Duarte; Gunther Schnabl

Abstract

Voters in the industrialised countries are increasingly expressing dissatisfaction by dissenting from the established political parties and candidates. Based on the concepts of justice by Hayek, Rawls and Buchanan, we argue that the growing dissatisfaction is rooted in the asymmetric pattern of monetary policies since the mid-1980s for two reasons. First, the structurally declining interest rates and the unconventional monetary policy measures have granted privileges to specific groups. Second, the increasingly expansionary monetary policies have negative growth effects, which have reduced the scope for compensation of the ones excluded from the privileges. As a result, the acceptance of the prevailing economic and political order is undermined and political instability increases.

Keywords: Buchanan, economic order, Hayek, inequality, Monetary policy, political instability, privileges, Rawls.

Erschienen in

The World Economy, 42(2), 2019, 614-634.

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Gunther Schnabl

Abstract

The paper scrutinizes the role of diverging fiscal policy stances for diverging current account positions in Europe with a focus on the European Monetary Union (EMU). In a heterogeneous monetary union fiscal policy has the task to absorb asymmetric shocks to ensure the efficacy of the one-size monetary policy. It is argued that since the early years of the European Monetary Union divergent fiscal policies combined with monetary expansion constituted a major determinant of current account divergence within the euro area, which finally led into the European debt and financial crisis. Panel regressions reveal a significant impact of fiscal policies on current account positions, which to a large extent are independent from the exchange rate regime and turn out to be contingent on monetary and fiscal policy mix. Based on the findings economic policy recommendations are presented.

Keywords: current account imbalances, Europe, European financial and debt crisis, European Monetary Union, exchange rate adjustment, fiscal policy, macroeconomic policy coordination.

JEL Codes: F32, F33, F42, H62.

Erschienen in

The Economists’ Voice, vol. 15, no. 1, 2018, pp. 20180026.

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David Herok; Gunther Schnabl

Abstract

Während die Arbeitslosigkeit in Europa stetig sinkt und immer weniger Unternehmen Insolvenz anmelden, wächst im Schatten der anhaltenden Flut des billigen Geldes durch die EZB die Anzahl von sogenannten Zombie -Banken, Zombie-Unternehmen und Zombie Staaten. Diese Entwicklung erinnert an eine Rückkehr zu planwirtschaftlichen Strukturen und erschwert den Ausstieg aus der sehr lockeren Geldpolitik. Nur ein Ausstieg kann jedoch entscheidend der fortschreitenden Zombiefizierung Einhalt zu gebieten, die die marktwirt-schaftlichen Prinzipien unterhöhlt, das Wachstum lähmt und den sozialen Frieden stört.

While unemployment and bankruptcies in Europe are steadily on decline, the number of so-called zombie banks, zombie companies and zombie states is growing in the shadow of the ECB's persistent ultra-easy monetary policy. This development is reminiscent of a return to planned economic structures and makes it much more difficult to exit from the very loose monetary policy. However, an exit is crucial to halting the zombification process which un-dermines free-market principles and growth, and disrupts social peace.

Keywords: Bank Regulation, ECB, Hayek, Interest Rates, Joseph Schumpeter, Monetary policy, Resource Allocation in Planning Economies, Zombie-Firms, Zombie-Lending.

JEL Codes: B31, E58, G28.

Erschienen in

Austrian Institute Paper 21 (2018).

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