诺贝尔经济学家Stiglitz演讲整理稿.doc

Chinas and the Global Financial CrisisMain topics: 1.current global crisis 2.Chinas policy responseThe lecture mostly concerns the global perspective, but also aspects of Chinas response.part 1 A deep and prolonged downturn.Its the first truly downtown of the modern era of globalization, most severe since the Great depression. What we are experiencing is inevitable and much more difficult and complex than the Great Depression. Its difficult for one country to deal with it, actually all countries are being affected. But China and Indias economy are stilling going up though Chinas exports are affected greatly by the weekness of USs aggregate demand.Globalization changed the way crisis intervined, half of the toxic mortages were bought by Europe, US exported deregulatory phylosopy.The crisis began in developed countries, but the developing countries also suffer a lot compared with EU, China, US who can afford mixed expenditures. The developing had to turn to IMF.Some of whats going on in China:decreased exports, lowered investment and wealth an anxiety about the future, expericing reduced borrowing and high unemployment rate, reserve migration.In conclusion, the recovery will be more difficult, the only way to get out of the global crisis is to recover together. Global response at the national level is needed. The size of the stimulus is likely to be too small.part 2They all maximize externalities accrue to themselves. But instead, they should add externalities that have benefits that accure to others.About Obamas protectionism: the provision is worse. US will buy goods produced in US and Europe, developing countries already had a hard time, and it will make them more difficult in the crisis.This crisis is fundamentally different from most downturns. Inventory cycles-once inventory depletes, economy restartscentral banks step on brakes too hard and worried about inflation But this time, more fundamentally, financial infrastures are damaged.Classical recession-lack of aggregate demandsupply side affects-lack of availabilitysupply and demand intertwinedrestoration of financial system is necessary,but only restoration of financial system is not sufficient, also we have the problem of lack of demand, cause of reduced consumption and increased saving rates.US saving rate has increased to 7%, household nearly 0, which is difficult to go up.China has a saving rate of almost 50%, which is difficult to go down.Currently, the US stock market is going down, housing price is going down, the pension funds for the retired down, people are difficult to geta loan, people began to save.The Sweden crisis about 18 years ago had a 18 percentage point change in saving rate.From 2002 to 2007, US experienced consumption boom, US kept economy going up, and they borrowed too much, spent beyond their means, people are not going to consume that level. They are inventive in creating new bubbles. Restoration of the financial system will not be easy. Its not just pulling money into banks, something else should be done to save the collapsed financial system, to escape such kind of deregulation which is very dangerous. The US government paid 700billion US dollars, creationg 12 times the money, 8.4 trillions, which is more than the banks needs. The basic learning in a finance clss is BY-gones are by-gones. And the truth is after the bailout, we got nothing for our money.Part 3Losses of banks already occured, mostly because of the bad loans. The bubbles are broken. Homes values are less than the mortages. We have the social tragedy. All their life-savings(specially the old) are gone. We have done very little for millions of Americans. We gave billions to the well-off, like shareholders of banks. Its a zero-sum game. The bankers want tax-payers to pay. Thats the debate all about( a debate between the scholars and part of the government including Treasury secretary Paulson)We are increasing national deficit/debt. zero sum game turned to negative sum game. We gave money to banks, we should demand shares in return. But we didnt want the share back. Treasury secretary Paulson proposed blank-check. Its really a bad deal, in fact the worst deal.Its the over-sight penals,the share worthy of 67 cents for 1 dollar. The citibank bailout, 25 cents for 1 dollar.In 2000, when Bush first came into power, the national debt was 5.7 trillion US dollar, but during the 8 years, the debt is soaring, in 2008, the debt was almost 15-16 trillion, it means that the burden in the future gets higher.Options:560 billion US dollars, bailout banks versus pensions funds for all the old people living in sound conditions for 75 years or more.Because the influnce of the financial markets are so tremendous, the government chose the bailout. they(banks) had incentives to ask for the bailout.In the second Citibank bailout, 300 billion was spent, we(government) took 95% of the losses, you(Citibank) took the game.When the value of the mortages exceeds the houses value, house trashed, community damages, mortage needs to be restructured. The banks has smallprobability to earn money, and high probabilities that the market will go down. But because of the bailout, he has every incentive not to restructure. Zero-sum game turned to negative-sum game. The government loses more.In 1980s, the banks were very dead, they just pretended to be alive. These banks had incentives to gamble, if they won, they turned from worth money to positive value, lost, they cant be deader than dead, so the result: many banks lost, tax payers had to pay.As we(government) pulled money in banks, the moeny pulled out as bonuses to shareholders.Why? They are in deep need of money. They never have good training and collabrative spirit. They have incentives to take moeny, get as much money as they can. They know bankrupty is likely.UK government: you cant do this.US government: take the money. The increased difficulty is: public got very angry. Many banks say: you cannot blame on us, we are just unprepared for this once in a century tsunami, but in fact they created the tsunami.Part 4Evolutionary processes failed-excessive risk takers drove out more prudential firmsInvestors saw lower returns at prudential firms, the prudential firms had no choice but do what others do, the prudential are wiped out.(Investors didnt see risk)World situation now: World race recession, insufficient aggregate demand, huge needs against poverty, retrofit global warming, restructure housing markets-when thousands of people are homeless, there are also lots of empty houses. Most people had lower income in 2007 than 1999, worse economic and health security.Socialing losses and privatizing gains is likely to be even worse. Problem now is consumpting too much. Obamas tax-cut policy is really very bad. Part 5Chinas response, Chinas package policy: that had a number of visions. 1, environmentally sustainable growth. 2, innovation economy. 3, increasing domestic comsumption. 4, helping the rural sector. 5, promoting social harmony.Chinas saving: household savings: only slightly too high. better social protections would have both direct and indirect effects on consumption.lack of access to capitalThe corporations have ununsually high income, ununsally high profits and retained earnigs, partially reflection of low wages.High profits contribute to high levels of investment. Supply grow faster than demand. It may result in deflation crisis. China under priced natural resources, when having full price, public revenues will raise.Learning from failures of USBetter regulations of financial sectorBetter regulatory structures-enforcement(by governments and corporations) matters.Paradox-people responsible for regulatory enforcement doesnt believe in regulation( Paulson)Completion policyMonetary policy framework flawedpay attention not only to inflat