资源描述
Global Economic Themes February 2020The Association of Chartered Certified Accountants, Institute of Management Accountants February 2020 About ACCA ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence. ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: About IMA (Institute of Management Accountants) IMA , named the 2017 and 2018 Professional Body of the Year by The Accountant/International Accounting Bulletin, is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA (Certified Management Accountant) and CSCA (Certified in Strategy and Competitive Analysis) programs, continuing education, networking and advocacy of the highest ethical business practices. IMA has a global network of more than 125,000 members in 150 countries and 300 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe, and Middle East/India. For more information about IMA, please visit: imanetOver the last year we have published a thematic piece of research on a topical economic issue in each quarterly Global Economic Conditions Survey (GECS) Report. These pieces discuss long term, structural trends which inevitably have a longer shelf life than the short-term relevance of the GECS itself. So, we thought it would make sense to collect these pieces together in a single report as a way of discussing longer-term economic developments. The first article focuses on the European single currency, the euro, assessing its performance in delivering growth and low inflation among member countries. The conclusion is that lower inflation has been achieved but at the price of weak and more volatile economic growth. The article also takes a view on likely future developments, noting that moves towards greater integration have been triggered after financial crises. A prime candidate for the next euro-zone crisis is Italy, where public sector debt is very high and the banking system looks increasingly fragile. The next two articles take China and the US in turn and look at some of the long-term challenges and changes that both economies are currently facing. In Chinas case the combined effect of high levels of debt and a declining working age population cast doubt on the countrys ability to make the difficult jump from a middle-income to high-income economy. The analysis also suggests that the recent slowdown in economic growth in China is permanent and structural in nature, rather than temporary and cyclical. Meanwhile, in the US, the apparent shift in the relationship between unemployment and wages growth is studied, including the implications for monetary policy. In addition, the emergence of the US as the worlds biggest oil producer is discussed. While bringing clear advantages in the form of self-sufficiency in oil, there are other potentially less benign consequences, such as much greater volatility in investment spending and GDP growth. Finally, the US public finances are assessed, namely the large budget deficit and rising public sector debt at a time when the economy is already buoyant. This casts doubt on the efficacy of fiscal policy in the next major downturn in US growth. The final thematic piece in this report published in October looked at the possible wider economic effects of trade tensions between the US and China. While the direct effects of tariffs on the worlds two largest economies should not be overstated, the wider impact on business confidence and investment has so far been more significant. But there are positives too, especially among some other Asian economies, such as Vietnam and Malaysia, where trade diversion has boosted exports to the US while those from China have contracted. This article is the most current of the four and there is a short update section at the end to reflect the recent improvement in US-China trade relations. The articles reproduced in this report are largely as they appeared in the original GECS reports. Charts have been updated where possible and references to dates adjusted to reflect the passage of time. Executive summary These pieces discuss long term, structural trends which inevitably have a longer shelf life than the short-term relevance of the GECS itself. 3Table 1: Main euro-zone countries pre and post-euro economic performance * except Greece which joined in 2001 Source: Eurostat I. The euro the first and next 20 years (Published January 2019, GECS Q4 2018 report) The euro survived its first two decades, despite several financial crises that threatened its very existence. But the euro has failed to deliver the real economic convergence claimed for it at the outset and further significant reforms are required if it is ultimately to be considered a success. In January 1999 the euro was launched with the irrevocable locking of exchange rates by its founder members and the assumption by the European Central Bank (ECB) of a single monetary policy. Early in 2002 12 countries introduced euro notes and coin, completing the process of creating a European single currency that had been first proposed as long ago as 1970 in the Werner Report. Many analysts doubted that the euro would come into existence or if it did so that it would not survive for very long. They have been proved wrong and the euro survives after 20 turbulent years of financial crisis, sovereign debt default and severe levels of systemic banking risk. Of all the remarks made by the three Presidents of the ECB over the last 20 years the most significant by far was the one made by Mario Draghi, then President of the ECB in July 2012 when he said “within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.” The fact that the head of a major central bank had to provide reassurance that its currency would survive speaks volumes about the existential threat to the euro at that time. But this did mark a turning point for the euro as Mr Draghis comments went a long way to convince financial markets that the euro was indeed here to stay. Bond yields in some of the periphery countries fell precipitously in the weeks after Mr Draghis statement, having previously increased sharply as fears of euro break up mounted. But of course, survival does not equate to success. The euro has resulted in economic divergence between its members rather than the convergence it was supposed to produce. (By economic convergence we mean the tendency for the business cycles of economies to move together, to be positively correlated.) A one-size fits all monetary policy conducted by the ECB resulted in much lower interest rates in many peripheral economies, much lower than was appropriate for their domestic economic strength. This resulted in booming economies, often fuelled by red hot housing markets (Ireland and Spain being prime examples of this). Rapid economic growth led to higher inflation and a loss of competitiveness. Inevitably these booms led to busts, greatly exacerbated by the financial crisis of 2007/08. This cruelly exposed the lack of flexibility in a monetary union comprising greatly varying economies. With no exchange rate or interest rate to ease adjustment and fiscal policy also constrained by rules limiting budget deficits, there was only one method by which these economies could restore lost competitiveness deflate demand. The consequent austerity and severe recession only served to push debt to extreme levels, raising fears of sovereign default and even of countries leaving the euro in order to be free from the single currency economic straitjacket. Cue M. Draghis commitment in 2012. So, the euro has indeed survived. But it has produced economic divergence not the convergence required to cement a permanent monetary union. One way of illustrating this is by comparing the dispersion of growth between the euro- zone economies in the 18 years before the creation of the euro and in the subsequent 20 years. Statistical analysis shows that the variability of growth between these countries has increased in the euro period compared with the pre-euro period (see final column in table below). GDP % Annual average Austria Belgium France Germany Greece Ireland Italy Nlands Portugal Spain Sdev 19811998 2.2 2.0 2.1 2.1 1.6 4.5 1.8 2.6 3.4 2.7 0.8 19992018* 1.8 1.7 1.5 1.5 0.1 5.3 0.5 1.7 0.9 2.0 1.3 CPI % Annual average Austria Belgium France Germany Greece Ireland Italy Nlands Portugal Spain Sdev 19801998 3.1 3.6 4.9 2.8 15.9 6.0 8.1 2.4 11.7 7.6 4.2 19992018* 1.8 2.0 1.5 1.5 2.1 1.7 1.9 1.9 2.0 2.2 0.2 4Chart 1: Italian and German government bond yields 10 year Government bond yields Source: Federal Reserve Bank of St Louis Economic Databank (FRED) Global Economic Themes | February 2020 While complete convergence is neither desirable nor achievable in any monetary union, some degree of convergence is necessary for the long-term sustainability of the euro. Moreover, continued divergence risks undermining the single currency, threatening its ultimate break up. On a more positive note there has been reduced variability of inflation at lower average rates across euro members. To a large extent this reflects much lower average rates in previous high inflation countries, such as Spain, Portugal and Greece. In many cases this lower inflation has been achieved at the expense of reduced economic growth and higher unemployment rates. But there can be no doubt that the ECB has met its mandate of achieving “below but close to 2% CPI inflation” in the euro-zone as a whole. THE NEXT 20 YEARS The history of monetary unions is that they require political union in order to ensure long-term survival. The euro is no different. So while it has been saved its fundamental structural flaws remain. These will need remedying in the next 20 years. In the long-term the euro-zone will need a central finance ministry with a budget to operate a fiscal stabilisation policy. In addition, debt mutualisation will be necessary i.e. the euro-zone as a whole will have to guarantee each members debts. Such developments would help cement the euro by providing - through a euro-zone budget an alternative means of economic adjustment. These issues are illustrated by the situation in Italy in late 2018. Italian public sector debt was around 130% of GDP and the European Commission insisted that the Italian budget should ensure that this debt level was on a declining trend. But the then recently elected Italian government insisted on a more relaxed budgetary stance as it attempted to tackle poverty and stimulate the economy. The stakes for Italy are high its economy is over eight times larger than that of Greece, for example, so default and bail out would have serious economic consequences for the euro-zone as a whole. As chart 1 shows the spread between Italian and German 10-year Government bond yields widened towards the end of 2018, reflecting concerns about Italys ability to both fund its debt and meet its debt servicing obligations. A deal in December 2018 effectively kicked the can down the road as the Italian government agreed to delay some (but not all) spending measures and aim for a budget deficit in 2019/20 of 2% of GDP instead of the original 2.4% target. But Italy committed to raising VAT if the public finances do not improve from 2020 onwards. With Brexit and European Parliament elections looming in the first half of 2019 as well as new budget issues in France such a deal suited both the Italian government and the European Commission. But Italys structural problems persist an excessive level of public sector debt and a sclerotic economy barely larger than it was 20 years ago, at the launch of the euro. Italys debt crisis has been postponed, not cancelled. The spread between Italian and German 10-year Government bond yields widened towards the end of 2018, reflecting concerns about Italys ability to both fund its debt and meet its debt servicing obligations. % Jan 08 Jan 10 Jan 14 Jan 12 Jan 16 Jan 18 Jan 20 The Italian mini-crisis of late 2018 highlights continuing tension between euro-zone members on this issue. Some want to move towards greater fiscal integration at the earliest opportunity. President Macron of France is a proponent of this approach. But there is stiff resistance from Germany and the Netherlands which argue that nation states should retain responsibility for their own fiscal policies and the health of their public finances. The concern especially in Germany is that some countries, knowing that their debts are guaranteed at the euro-zone level, would pursue excessively lax policies, imposing costs on other euro- zone members. So the euro will probably survive for another 20 years indeed it may well have now passed the point of maximum danger. But by 2038 it will also look rather different than it does today and will almost certainly have expanded to include more than 20 members. Moreover, there will be in some form a euro-zone Finance Ministry with tax raising powers and a stabilisation remit. A euro-zone government bond market is also likely to have emerged. This will be achieved over time with a series of small steps usually triggered by crises the traditional way in which the euro-zone has moved towards greater integration. More euro-zone crises over the next two decades are a fairly safe prediction. Less predictable is the extent to which there will be real economic convergence among euro members. That may have to wait until the euro has turned 40 or even 50. 5 -2 -1 0 1 2 3 4 5 6 7 8 Germany ItalyII. China a debt and demographics time bomb? (Published in April 2019, GECS Q1 2019 report) China has enjoyed huge economic success in recent decades. But in orde
展开阅读全文