How Nobel Laureate's Views Fit In Today
Last week the Royal Swedish Academy of Sciences awarded the Nobel Prize for economics to Edward Prescott , a professor at Arizona State University and a researcher at the Federal Reserve Bank of Minneapolis, and to his longtime collaborator, Finn Kydland of the University of California at Santa Barbara. The professors were lauded for research calling into question traditional "Keynesian" theories related to economic booms and busts. They also wrote pioneering work called the "time consistency" theory, which explained how short-sighted thinking can prompt government policy makers to make long-run mistakes on issues ranging from disaster assistance to patent protection to inflation fighting. In an interview, Mr. Prescott discussed how his views fit in with some current economic issues.
WSJ: Your work on time consistency suggests that federal disaster assistance can be counterproductive in the long run. Can you explain whether it was a good idea or bad idea for Washington to pledge $15 billion in disaster relief to Florida and the Southeast in the aftermath of the hurricanes?
Prescott: In these cases, providing disaster assistance is good policy because the losses are not the result of moral hazard. By this I mean that these losses do not occur because of a lack of due diligence. Building codes ensure that houses are properly constructed, thereby eliminating the moral-hazard problem. The bottom line is that moral hazard played little role in Florida in determining the size of the losses. Therefore, disaster relief is good policy as it provides social insurance.
WSJ: Wouldn't your theory suggest that disaster insurance encourages people to live in areas of Florida where, on the margin, they might not otherwise choose to live?
Prescott: These recent hurricanes were not only extraordinarily large and powerful, but also uncommon; that is, hurricanes of this size and severity are infrequent. Clearly, if you are talking about a situation where a natural disaster occurs on a consistent basis, say every three years or so, and impacts the lives of a small group of people over and over, then you are correct -- federal bailouts would fail the time-consistency test. But again, these hurricanes were of such uncommon size and severity that to help out these citizens is good governance.
WSJ: Your research suggests that a Keynesian response to economic slowdowns is not good policy. So, was recent government stimulus -- in the form of income-tax cuts and business-investment incentives -- the right response to the U.S. economic slowdown?
Prescott: We should get away from thinking about stimulus policies and worry about long-run growth policies, and when it comes to taxes we should worry about policies from the perspective of their efficiency and distributional consequences. We should use economic theory to design a good tax system, and this means that we should avoid using taxes for social engineering. The purpose of the tax system is to collect needed revenue at the least cost to the people.
WSJ: What course should income-tax policy take in the next four years, and how should the mounting federal budget deficit be factored into decisions about tax policy?
Prescott: We should reduce the Social Security tax from 12.4% to 2.4% for those who agree to have 10% of their salary and wage income put into a 401-type retirement account. Individuals would turn these savings into annuity payments at some time subsequent to reaching age 62. With this policy, labor supply would increase, promises to the elderly would be honored, and the young would be made better off. Associated with this change, there would be a period when government debt, relative to gross national income, would increase before decreasing. Currently, privately owned federal government debt, which is the relevant debt, has been flat over the last three years at 28% of gross national income -- the same as in 1940. While it is true that there have been fluctuations in the interim, since 1960 this rate has been essentially level, with modest fluctuations.
WSJ: The Bush and Kerry campaigns are debating the merits of allowing the importation of cheaper prescription drugs from Canada, where prices are controlled by the government. U.S. drug companies oppose this proposal. Your research has looked at drug patents. Do your theories offer any insight into the likely effects of such a policy?
Prescott: Honoring promises is essential to good policy. The owners of the drug companies, who include many shareholders accumulating savings for their retirement, should not have their property expropriated without compensation. Now, it would be fine to institute new rules that change the degree of patent protection for new drugs, but note that I said for new drugs. If government does not honor its promises, the time-inconsistency problem will be much greater and the American people will suffer. Any candidate with a plan that does not honor past promises is not fit to serve as president.
WSJ: Do rising oil prices jeopardize the stable inflation outlook that the Fed has fought so hard to create in the past two decades?
Prescott: No. Monetary policy will continue to be such that we will have stable overall prices. Now, that doesn't mean that an increase in oil prices doesn't have a negative impact. A rising price of oil is a negative real shock on the economy and, hence, depresses the economy, but only a little. But we should never confuse a rise in the price of one commodity, even one as important to our economy as oil, with a rise in inflation. Inflation, of course, reflects the collective prices of a basket of goods and is the result of an accommodative monetary policy. An increase in oil prices, as nettlesome as it might be in the short run, should never deter monetary policy from its long-run goal of price stability.
WSJ: In 2000 you wrote a paper arguing that the stock market was not overvalued, because the value of corporate equity was roughly equal to the value of productive U.S. assets. Has your view changed since then? What is your view about the valuation of the market today?
Prescott: My views have not changed. The stock market was not overvalued at the beginning of 2000, although it was overvalued by about 15% in March of that year. Currently, according to theory, the stock market is undervalued.
I should note that this theory holds when applied to the U.K. stock market.
The correct valuation of the stock market depends on more than tangible corporate assets such as capital stock, inventories and land. It also depends on intangible assets that do not show up on balance sheets, like patents, brand names, and research and development.
You also have to correct for the consequences of existing tax rates on corporate distributions. In the 1950s and 1960s, tax rates on corporate distributions were high and the value of the stock market low. The tax rate on distributions fell dramatically as the result of the share of stocks held in retirement accounts and as pension-fund reserves dramatically increased. 诺贝尔经济学奖得主眼中的美国经济
瑞典皇家科学院 (Royal Swedish Academy of Sciences) 上周将诺贝尔经济学奖授予亚利桑那州大学 (Arizona State University) 教授兼明尼阿波利斯联邦储备银行研究员爱德华?普莱斯科特 (Edward Prescott) 和他的长期合作者加州大学 (University of California) 教授芬?柯德兰 (Finn Kydland) 。这两位教授的研究对凯恩斯学说中有关经济盛衰的理论提出了质疑，率先提出了“时间连贯性”理论，解释了短视思维怎样促使政府决策者在灾难救助、专利保护到抵御通货膨胀等种种领域作出长期错误决策的原因。在接受本报采访时，普莱斯科特谈到了他的观点在解释当前某些经济现象方面的适用性。
《华尔街日报》：您对时间连贯性的研究表明，联邦灾难救助在长期来看可能会产生适得其反的效果，能解释一下今年佛罗里达州和东南部地区遭受数次飓风袭击后联邦政府承诺划拨 150 亿美元救助款是个好主意还是坏主意？
普莱斯科特：在这种情况下，划拨救助款是对的，因为损失并非道德风险所致。我是说，这些损失并不是因为不够尽职而导致的。如果建房方面不存在违规之处，那么这些损失就不能归咎于道德风险。最根本的一点是，道德风险对确定佛罗里达州损失规模的影响微乎其微。因此，划拨灾难援助是一项正确的决策，它提供了必要的社会保障。
问：您的理论不是认为灾难援助会吸引人们到佛罗里达州这样的地区居住吗？ ( 否则他们是不会到这里来住的。 )
答：今年的这几次飓风不但超乎寻常，威力巨大，而且也是非同寻常的。也就是说，这样大规模和严重的飓风灾害并不是常常发生的。很明显，如果我们讨论的是常常爆发的自然灾害，比如说每三年一次，以及灾害给一小部分人的长期生活带来的影响，那么联邦救助就无法通过时间连贯性测验。但是，我必须重申，今年这样大规模且灾害严重的飓风非同寻常，所以向居民提供援助是一项好政策。
问：您的研究认为根据凯恩斯理论应对经济衰退是个失策。那么，最近政府采取的这几项措施，包括减税和提振商业投资等，是不是应对经济下滑的正确决策呢？
答：我们应该放弃考虑刺激政策，转而关心长期增长政策了。说到税收，我们应该从政策的效率和分配后果来考虑。我们应该遵循经济理论，制定一套良好的税收体系。所谓良好，是说不应该把税收当作社会动力，而是以最少的成本收集必要的收入。
问：未来四年的税收政策应当如何制定？与日俱增的联邦预算赤字如何融合到税收政策的决策当中？
答：对那些允诺把收入的 10% 拨入 401 退休帐户的人们，应该把他们的社会保障税率从 12.4% 降至 2.4% 。居民 62 岁之后可以把这笔钱当作年金支取。这样的政策会增加劳动力供应水平，使向老年人承诺的保障可以得到履行，让年轻的人过上更好的生活。伴随而来的会是政府债务占国民生产总值的比率先涨后降。目前，联邦政府欠私人的债务，就是所谓的相对债务，持续三年停留在占国内生产总值 28% 的水平上，与 1940 年持平。当然，这期间有波动，但从 1960 年以来这个比率基本持平，只有小幅波动。
问：布什 (Bush) 和克里 (Kerry) 在竞选辩论中讨论了从加拿大进口廉价药品的优劣。加拿大药品价格由政府控制，所以比美国低。但美国制药公司纷纷反对这一提议。您的研究也涉及了药物专利问题，请问您在这个问题上有什么看法？
答：能否恪守承诺是评判一项政策优劣的关键。制药公司的所有者，包括许多为退休积攒储蓄的股东，都不应该毫无补偿地被剥夺了财产。现在，应该调整对新药的专利保护程度，注意我说的是新药。如果政府不能恪守承诺，那么时间连贯性问题会给美国人民带来更大痛苦。任何一位总统候选人，如果不能保证恪守以前政府作出的承诺，就不适合当选总统。
问：油价持续上扬是否损害了 Fed 二十多年来苦心经营的稳定的通货膨胀前景？
答：不是。货币政策应当继续以维持物价稳定为目标。当然这并不是说油价上涨没有负面影响。油价上涨是整体经济面临的一个切实的负面因素，但影响很小。我们不应该把某一项商品 ( 即使它是石油这样重要的商品 ) 的价格上涨等同于通货膨胀率上涨。诚然，通货膨胀率体现了各类商品价格的总和，也是宽松货币政策的结果。油价上涨，哪怕它在短期内令人担忧不已，也不应损害保持物价稳定这个货币政策的长期目标。
问： 2000 年您撰文表示股市并未高估，因为公司股票的价值与生产性美国资产的价格大致相同。您认为从那时到现在，这一点有没有什么改变？您对今天股市的价值如何看待？
答：我的看法没有改变。 2000 年年初时股市并未高估，不过当年 3 月份股市大约被高估了 15% 。眼下，从理论上说，股市是被低估了。
我要说明的是，这个理论在考察英国股市时是正确的。
目前股市的价值更多取决于有形公司资产，例如资本品、存货和土地。但它也取决于那些并不会表现在资产负债表上的无形资产，例如专利、品牌和研发。
我们恐怕要纠正现行企业分配税的后果。在上世纪五十年代和六十年代期间，企业分配税率很高，而股市价值偏低。但随著股票在退休帐户和养老金拨备中的比例大幅上扬，分配税税率迅速下滑。
