Olivier Blanchard

thumb|Oliver Blanchard, 1998 Olivier Jean Blanchard (born December 27, 1948) is a French economist, and the chief economist at the International Monetary Fund between 2008 and 2015. Quotes I refuse to start from the assumption that the role of monetary policy is to control and stabilize inflation. The only acceptable way to start is, I believe, to think of the goal of monetary policy, together with fiscal policy,as the maximization of welfare. "Monetary Policy; Science or Art?" (2006) Crises feed uncertainty. And uncertainty affects behaviour, which feeds the crisis. https://www.economist.com/node/13021961/all-comments?page=1 Economics focus: (Nearly) nothing to fear but fear itself (2009) Credo che il Fondo possa giocare un ruolo importante non solo monitorando i rischi sistemici di natura finanziaria ma estendendo la nostra analisi all'intero spettro dell'economia mondiale. Abbiamo un enorme mole di dati a disposizione per fare questo. Credo che il nostro ruolo debba essere quello di farsi trovare pronti ad agire non solo in caso di crisi come è avvenuto recentemente ma in maniera costante. Questo dovrà essere il nostro obiettivo per i prossimi 10, 20, 30 anni. I believe that the Fund can play an important role not only by monitoring systemic risks of a financial nature but by extending our analysis to the whole spectrum of the world economy. We have a huge amount of data available to do this. I believe that our role must be to be found ready to act not only in the event of a crisis as has happened recently but consistently. This will have to be our goal for the next 10, 20, 30 years. Giancarlo Marcotti, Crisi finanziaria, intervista a Olivier Blanchard, capo economista del FMI: "Di certo non è il momento di mettere fine alle agevolazioni fiscali anti-crisi", finanzainchiaro.it, 29 June 2009. Da 25 anni Tokyo deve fare i conti con una domanda provata troppo bassa per sostenere il pieno impiego. Di qui una politica monetaria e di bilancio molto aggressiva con un debito che supera il 200 per cento del pil e tassi negativi. [È questa una politica rischiosa?] Certo, ma ha consentito di raggiungere e conservare una situazione di pieno impiego. L'Europa non può non tener conto di questo esempio. For 25 years, Tokyo has had to deal with proven demand that is too low to sustain full employment. Hence a very aggressive monetary and budgetary policy with debt exceeding 200 per cent of the pil and negative rates. [Is this a risky policy?] Of course, but it has allowed us to achieve and maintain a situation of full employment. Europe cannot fail to take this example into account. Ugo Bertone, Per l'ex capo economista del Fmi la politica monetaria ha ormai esaurito le sue risorse, bisogna puntare sulla politica fiscale con un monitoraggio della spesa pro investimenti, ilfoglio.it, 2 July 2019. [...] io sono d'accordo al 100 per cento con Emiliano Brancaccio sul fatto che la deflazione non è una soluzione positiva. Quindi, io credo, la soluzione non è a livello nazionale, ma a livello europeo: la Germania deve accettare al suo interno più del 2 per cento di inflazione, in modo che gli altri possano sostanzialmente migliorare la loro competitività senza deflazione. Mi sembra che la Germania in questo momento si stia comportando in un modo che rende molto difficili gli aggiustamenti dell'eurozona. [...] I agree 100 percent with Emiliano Brancaccio that deflation is not a positive solution. So, I believe, the solution is not at the national level, but at the European level: Germany must accept more than 2 percent inflation within it, so that others can substantially improve their competitiveness without deflation. It seems to me that Germany is behaving in a way at the moment that makes eurozone adjustments very difficult. Olivier Blanchard and Emiliano Brancaccio, Pensare un'alternativa. Dialogo tra Olivier Blanchard e Emiliano Brancaccio, in MicroMega, Un'altra Europa è necessaria, vol. 2, 2019, p. 26. ISBN 9788883717598. [...] l'austerity fiscale si traduce in un immediato calo degli investimenti pubblici. E questa è una catastrofe. Credo che si debba dare più margine di manovra ai governi europei. Servono regole per stare insieme, ma le maglie devono essere più larghe, serve più spazio. Per questo penso che vadano cambiati i parametri, penso, per esempio al tetto del debito fissato al 60% del Pil. Se mai ha avuto un senso, oggi non lo ha di certo proprio perché i tassi sono bassi. [...] È molto importante capire cosa viene finanziato a debito. Se i soldi aumentano gli investimenti e rendono produttivo il capitale, allora il tema del debito perde ogni significato. [...] fiscal austerity translates into an immediate decline in public investment. And this is a catastrophe. I believe that more leeway should be given to European governments. You need rules to stay together, but the stitches need to be wider, you need more space. This is why I think the parameters need to be changed, I'm thinking, for example, of the debt ceiling set at 60% of GDP. If it ever made sense, it certainly doesn't today precisely because rates are low. [...] It is very important to understand what is being financed on debt. If money increases investment and makes capital productive, then the topic of debt loses all meaning. Giuliano Balestrieri, Blanchard: "Il debito pubblico italiano non è un problema, maglie più larghe in Europa per finanziare gli investimenti", businessinsider.com, 30 May 2019. Sono semplicemente in ammirazione per quello che Mario Draghi ha saputo fare in questi ultimi 8 anni. Con tre parole ha salvato l'Europa dalla tragedia ma sarebbe riduttivo ricordarlo solo per queste tre parole dietro le quali c'è stata una grande preparazione politica e intellettuale altrimenti non sarebbero state credibili. La storia saprà ricordarlo in tutta la sua grandezza. I am simply in admiration for what Mario Draghi has been able to do over the last 8 years. With three words he saved Europe from tragedy but it would be reductive to remember him only for these three words behind which there was great political and intellectual preparation otherwise they would not have been credible. History will remember him in all his greatness. Mariangela Tessa, Blanchard (ex FMI): "BCE non riuscirà a combattere la prossima recessione da sola", wallstreetitalia.com, 18 June 2019. Uno sforamento del debito pubblico, purché per un buon motivo, non mi impedirà certo di dormire sonni tranquilli. A public debt overrun, as long as for a good reason, certainly won't stop me from sleeping soundly. Ugo Bertone, Per l'ex capo economista del Fmi la politica monetaria ha ormai esaurito le sue risorse, bisogna puntare sulla politica fiscale con un monitoraggio della spesa pro investimenti, ilfoglio.it, 2 July 2019. Macroeconomics (7th Edition, 2017) Using the popular macroeconomic models of the time, Lucas and Sargent showed how replacing traditional assumptions about expectations formation by the assumption of rational expectations could fundamentally alter the results.... Most macroeconomists today use rational expectations as a working assumption in their models and analyses of policy. This is not because they believe that people always have rational expectations. Surely there are times when people, firms, or financial market participants lose sight of reality and become too optimistic or too pessimistic... But these are more the exception than the rule, and it is not clear that economists can say much about those times anyway. When thinking about the likely effects of a particular economic policy, the best assumption to make seems to be that financial markets, people, and firms will do the best they can to work out the implications of that policy. Designing a policy on the assumption that people will make systematic mistakes in responding to it is unwise. Ch. 16 : Expectations, Output, and Policy Lucas and Sargent’s main argument was that Keynesian economics had ignored the full implications of the effect of expectations on behavior. The way to proceed, they argued, was to assume that people formed expectations as rationally as they could, based on the information they had. Thinking of people as having rational expectations had three major implications, all highly damaging to Keynesian macroeconomics. ...The first implication was that existing macroeconomic models could not be used to help design policy. … The second implication was that when rational expectations were introduced in Keynesian models, these models actually delivered very un-Keynesian conclusions. … The third implication was that if people and firms had rational expectations, it was wrong to think of policy as the control of a complicated but passive system. Rather, the right way was to think of policy as a game between policy makers and the economy. … To summarize: When rational expectations were introduced, Keynesian models could not be used to determine policy; Keynesian models could not explain long-lasting deviations of output from the natural level of output; the theory of policy had to be redesigned, using the tools of game theory. Ch. 24 : Epilogue: The Story of Macroeconomics External links Category:1948 births Category:Living people Category:Academics from France Category:Economists from France Category:International Monetary Fund officials