Choques reales versus financieros

Una lejana (1986) pero inapreciable, contribución de Larry Summers a la crítica de los "Equilibristas Tecnológicos" (ET. Llamo así a los de los modelos de Equilibrio General en su vertiente ciclos = cambios tecnológicos). Según estos, las fluctuaciones de la peosiccion y el empleo se deben a choques en la productividad = cambios tecnológicos. Summers dice que los supuestos de que parten estos modelos son absurdos, y que los resultados no coinciden con la realidad. Es necesario mirar a los choques financieros para encontrar un factor plausible de las graves depresiones del siglo XX. ¿Razón por la que doy la matraca con esto, a unos lectores quizás poco interesados o cansados de esta aridez? Sólo una: aprendo yo (el día que pierda las ganas de aprender ;-). Espero que alguien más. Algunos párrafos: 1) sobre causas y efectos de la productividad: las variaciones de demanda pueden determinar variaciones en la productividad:

Where Are the Shocks?

A second observation casting doubt on Prescott's assumed driving force is that while technological shocks leading to changes in total factor productivity are hard to find, other explanations are easy to support. Jon Fay and James Medoff (1985) surveyed some 170 firms on their response to downturns in the demand for their output. The questions asked were phrased to make clear that it was exogenous downturns in their output that were being inquired about. Fay and Medoff (1985, p. 653) summarize their results by stating that "the evidence indicates that a sizeable portion of the swings in productivity over the business cycle is, in fact, the result of firms' decisions to hold labor in excess of regular production requirements and to hoard labor." According to their data, the typical plant in the U.S. manufacturing sector paid for 8 percent more blue- collar hours than were needed for regular production work during the trough quarter of its most recent down- turn. After taking account of the amount of other worthwhile work that was completed by blue-collar employees during the trough quarter, 4 percent of the blue-collar hours paid for were hoarded. Similar con-clusions have been reached in every other examinationof microeconomic data on productivity that I am awareof.

In Prescott's model, the central driving force behindcyclical fluctuations is technological shocks. The propa-gation mechanism is intertemporal substitution in em-ployment. As I have argued so far, there is no inde-pendent evidence from any source for either of thesephenomena.

2) sobre los precios:

What About Prices? . . .My third fundamental objection to Prescott's argument is that he does price-free economic analysis. Imagine ananalyst confronting the market for ketchup. Supposes he or he decided to ignore data on the price of ketchup.This would considerably increase the analyst's freedom in accounting for fluctuations in the quantity of ketchup purchased. Indeed, without looking at the price of ketch-up, it would be impossible to distinguish supply shocks from demand shocks. It is difficult to believe that any explanation of fluctuations in ketchup sales that did not confront price data would be taken seriously, at least by hard-headed economists.Yet Prescott offers us an exercise in price-free economics. While real wages, interest rates, and returnsto capital are central variables in his model, he never looks at any data on them except for his misconstrual of the average real interest rate over the postwar period. Others have confronted models like Prescott's to data on prices with what I think can fairly be labeled dismalresults. There is simply no evidence to support any of the price effects predicted by the model. Prescott's work does not resolve—or even mention—the empirical reality emphasized by Robert Barro and Robert King(1982) that consumption and leisure move in opposite directions over the business cycle with no apparent procyclicality of real wages. It is finessed by ignoring wage data. Prescott's own work with Rajnish Mehra(1985) indicates that the asset pricing implications of models like the one he considers here are decisively rejected by nearly 100 years of historical experience. I simply do not understand how an economic model can be said to have been tested without price data.I believe that the preceding arguments demonstrate that real business cycle models of the type surveyed by Prescott do not provide a convincing account of cycli-cal fluctuations. Even if this strong proposition is not accepted, they suggest that there is room for factors other than productivity shocks as causal elements incyclical fluctuations.

3) sobre lo que falla de verdad:

And Exchange Failures?

A fourth fundamental objection to Prescott's work isthat it ignores the fact that partial breakdowns in theexchange mechanism are almost surely dominant factors in cyclical fluctuations. Consider two examples.Between 1929 and 1933, the gross national product inthe United States declined 50 percent, as employmentfell sharply. In Europe today, employment has not risensince 1970 and unemployment has risen more thanfivefold in many countries. I submit that it defies credulity to account for movements on this scale by pointingto intertemporal substitution and productivity shocks.All the more given that total factor productivity hasincreased more than twice as rapidly in Europe as in theUnited States.

If some other force is responsible for the largestfluctuations that we observe, it seems quixotic method-ologically to assume that it plays no role at all in othersmaller fluctuations. Whatever mechanisms may havehad something to do with the depression of the 1930s inthe United States or the depression today in Europepresumably have at least some role in recent Americancyclical fluctuations.

What are those mechanisms? We do not yet know.But it seems clear that a central aspect of depressions,and probably economic fluctuations more generally, isa breakdown of the exchange mechanism. Read anyaccount of life during the Great Depression in theUnited States. Firms had output they wanted to sell.Workers wanted to exchange their labor for it. But theexchanges did not take place. To say the situation wasconstrained Pareto optimal given the technologicaldecline that took place between 1929 and 1933 issimply absurd, even though total factor productivity didfall. What happened was a failure of the exchangemechanism. This is something that no model, no matterhow elaborate, of a long-lived Robinson Crusoe dealingwith his changing world is going to confront. A modelthat embodies exchange is a minimum prerequisite fora serious theory of economic downturns.

The traditional Keynesian approach is to postulatethat the exchange mechanism fails because prices are insome sense rigid, so they do not attain market-clearinglevels and thereby frustrate exchange. This is far frombeing a satisfactory story. Most plausible reasons whyprices might not change also imply that agents shouldnot continue to act along static demand and supplycurves. But it hardly follows that ignoring exchangefailures because we do not yet fully understand them isa plausible strategy.

Where should one look for failures of the exchange process? Convincing evidence of the types of mecha-nisms that can lead to breakdowns of the exchangemechanism comes from analyses of breakdowns incredit markets. These seem to have played a crucial rolein each of the postwar recessions. Indeed, while it ishard to account for postwar business cycle history bypointing to technological shocks, the account offeredby, for example, Otto Eckstein and Allen Sinai (1986)of how each of the major recessions was caused by acredit crunch in an effort to control inflation seemscompelling to me.

Conclusion

Even at this late date, economists are much better atanalyzing the optimal response of a single economicagent to changing conditions than they are at analyzingthe equilibria that will result when diverse agents inter-act. This unfortunate truth helps to explain why macro-economics has found the task of controlling, predicting,or even explaining economic fluctuations so difficult.Improvement in the track record of macroeconomicswill require the development of theories that can ex-plain why exchange sometimes works well and othertimes breaks down. Nothing could be more counterpro-ductive in this regard than a lengthy professional detourinto the analysis of stochastic Robinson Crusoes.