The Spectre of Monetarism Roscoe Lecture, Liverpool John Moores - - PowerPoint PPT Presentation

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The Spectre of Monetarism Roscoe Lecture, Liverpool John Moores - - PowerPoint PPT Presentation

Aug 24, 2022 216 likes •723 views

The Spectre of Monetarism Roscoe Lecture, Liverpool John Moores University Mark Carney Governor of the Bank of England 5 th December 2016 2 Liverpool golden era Liverpool Custom House, John Atkinson Grimshaw (1836-1893) 3 4 Global internet

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Roscoe Lecture, Liverpool John Moores University

The Spectre of Monetarism

Mark Carney Governor of the Bank of England 5th December 2016

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Liverpool golden era

Liverpool Custom House, John Atkinson Grimshaw (1836-1893) 3

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Global internet access has boomed while poverty has fallen sharply

0.4bn 3.4bn 10 20 30 40 50 2000 2016 Per cent of world population

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Global internet access has boomed while poverty has fallen sharply

0.4bn 3.4bn 10 20 30 40 50 2000 2016 Per cent of world population

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0% 10% 20% 30% 40% 50% 1981 1986 1991 1996 2001 2006 2011 % of world population 1.9 bn people 0.8 bn people

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Global income and life expectancy have increased notably

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Global growth serially disappointing

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0.0 2.0 4.0 6.0 8.0 2010 2011 2012 2013 2014 2015 2016 2011 Per cent Advanced economies Emerging economies

Lines show forecasts over time. Dot shows actual outturns.

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Global growth serially disappointing

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0.0 2.0 4.0 6.0 8.0 2010 2011 2012 2013 2014 2015 2016 2011 2012 Per cent Advanced economies Emerging economies

Lines show forecasts over time. Dot shows actual outturns.

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Global growth serially disappointing

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0.0 2.0 4.0 6.0 8.0 2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 Per cent Advanced economies Emerging economies

Lines show forecasts over time. Dot shows actual outturns.

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Global growth serially disappointing

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0.0 2.0 4.0 6.0 8.0 2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 Per cent Advanced economies Emerging economies

Lines show forecasts over time. Dot shows actual outturns.

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Global growth serially disappointing

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0.0 2.0 4.0 6.0 8.0 2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 Per cent Advanced economies Emerging economies

Lines show forecasts over time. Dot shows actual outturns.

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Global growth serially disappointing

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0.0 2.0 4.0 6.0 8.0 2010 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 Per cent Advanced economies Emerging economies

Lines show forecasts over time. Dot shows actual outturns.

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Weakest wage growth since 1860s

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Income inequality rose sharply during the 1980s… and the share of top 1% has continued to grow

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Less equal

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Increasing disparity between the incomes of lowest 10% and highest 10%

Bottom 10% Top 10%

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Bottom 10% Top 10%

Increasing disparity between the incomes of lowest 10% and highest 10%

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Bottom 10% Top 10%

Increasing disparity between the incomes of lowest 10% and highest 10%

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Bottom 10% Top 10%

Increasing disparity between the incomes of lowest 10% and highest 10%

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Since 1995, wealth has increased most for the oldest

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1995 2006-8 2012-14

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Mid-18th Century

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Turn of 19th Century

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Mid-19th Century

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Turn of 20th Century

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Mid-20th Century

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Turn of 21st Century

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Bond yields used to rise when equities fell… now they fall too

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Bond yields and equities moving in

  • pposite directions

No correlation Same direction

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Unemployment rate Income

  • 2
  • 1

1 2 3 4 5 6 7 8 2006 2008 2010 2012 2014 2016 65+ pp increase since 2006

  • 20
  • 15
  • 10
  • 5

5 10 15 20 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 65+ % change since 2006

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Unemployment rate Income

  • 2
  • 1

1 2 3 4 5 6 7 8 2006 2008 2010 2012 2014 2016 16-24 65+ pp increase since 2006

  • 20
  • 15
  • 10
  • 5

5 10 15 20 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 16-24 65+ % change since 2006

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The young were affected disproportionately by the recession

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Unemployment rate Income

  • 2
  • 1

1 2 3 4 5 6 7 8 2006 2008 2010 2012 2014 2016 16-24 65+ pp increase since 2006

  • 20
  • 15
  • 10
  • 5

5 10 15 20 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 16-24 65+ % change since 2006

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Around half of households are not savers…

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Around half of households are savers…

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… but few savers do not also have housing wealth

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Most wealthy

10 20 30 40 50 60 2006-8 2008-10 2010-12 2012-14 Total net wealth (% change since 2006-8)

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Wealth

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Least wealthy Most wealthy

10 20 30 40 50 60 2006-8 2008-10 2010-12 2012-14 Total net wealth (% change since 2006-8)

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Wealth

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Least wealthy Most wealthy

10 20 30 40 50 60 2006-8 2008-10 2010-12 2012-14 Total net wealth (% change since 2006-8)

Highest income

  • 4
  • 2

2 4 6 8 10 2006 2007 2008 2009 2010 2011 2012 2013 2014 Income (% change since 2006)

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Wealth Income

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Least wealthy Most wealthy

10 20 30 40 50 60 2006-8 2008-10 2010-12 2012-14 Total net wealth (% change since 2006-8)

Lowest income Highest income

  • 4
  • 2

2 4 6 8 10 2006 2007 2008 2009 2010 2011 2012 2013 2014 Income (% change since 2006)

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Wealth Income

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Wealth and income have increased proportionally most for the poorest

Least wealthy Second- least Middle wealth Second- most Most wealthy

10 20 30 40 50 60 2006-8 2008-10 2010-12 2012-14 Total net wealth (% change since 2006-8)

Lowest income Second- lowest Middle income Second- highest Highest income

  • 4
  • 2

2 4 6 8 10 2006 2007 2008 2009 2010 2011 2012 2013 2014 Income (% change since 2006)

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Wealth Income

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  • 25.0
  • 20.0
  • 15.0
  • 10.0
  • 5.0

0.0 5.0 10.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Percentage point deviation from 1993-2007 trend

GDP 39

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  • 25.0
  • 20.0
  • 15.0
  • 10.0
  • 5.0

0.0 5.0 10.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Percentage point deviation from 1993-2007 trend

Headwinds GDP 40

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  • 25.0
  • 20.0
  • 15.0
  • 10.0
  • 5.0

0.0 5.0 10.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Percentage point deviation from 1993-2007 trend

Monetary Policy Headwinds GDP 41

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  • 25.0
  • 20.0
  • 15.0
  • 10.0
  • 5.0

0.0 5.0 10.0 2008 2009 2010 2011 2012 2013 2014 2015 2016

PRODUCTIVITY

Percentage point deviation from 1993-2007 trend

Monetary Policy Headwinds GDP 42

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Weak productivity explains weakness in GDP

  • 25.0
  • 20.0
  • 15.0
  • 10.0
  • 5.0

0.0 5.0 10.0 2008 2009 2010 2011 2012 2013 2014 2015 2016

PRODUCTIVITY

Percentage point deviation from 1993-2007 trend

Monetary Policy Headwinds GDP 43

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  • 0.5

0.5 1 1.5 2 2.5 3 3.5 4 2013 2014 2015 2016 Consumption Other factors Total Real GDP (oya) Per cent

Growth

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2 4 6 8 10 12 14 2007 2009 2011 2013 2015 Saving rate Per cent

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  • 0.5

0.5 1 1.5 2 2.5 3 3.5 4 2013 2014 2015 2016 Consumption Other factors Total Real GDP (oya) Per cent

Growth Saving

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Growth increasingly consumption-led… as saving falls

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  • 0.5

0.5 1 1.5 2 2.5 3 3.5 4 2013 2014 2015 2016 Consumption Other factors Total Real GDP (oya) Per cent

Growth Saving

2 4 6 8 10 12 14 2007 2009 2011 2013 2015 Saving rate Per cent

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The Spectre of Monetarism?

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  • r the friendly ghost?

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