Riskerna med hushållens skulder har överdrivits. Utländska erfarenheter beskrivs på ett missvisande sätt. Amorteringskraven har införts på felaktiga grunder. De drabbar nya bolånetagare utan hög inkomst eller förmögenhet, särskilt unga. De minskar också hushållens motståndskraft mot inkomststörningar. Continue reading
“Monetary Policy Strategies for the Federal Reserve,” International Journal of Central Banking 16 (February 2020) 133-193. Paper.
A previous version was prepared for the conference Monetary Policy Strategy, Tools, and Communication Practices—A Fed Listens Event, Federal Reserve Bank of Chicago, June 4–5, 2019. Video (my presentation starts 3 min 5 sec into the session).
The paper finds that the general monetary policy strategy of “forecast targeting” is more suitable for fulfilling the Federal Reserve’s dual mandate of maximum employment and price stability than following a Taylor-type rule. Forecast targeting can be used for any of the more specific strategies of annual-inflation targeting, price-level targeting, temporary price-level targeting, average-inflation targeting, and nominal-GDP targeting. The specific strategies are examined and evaluated according to how well they may fulfill the dual mandate, considering the possibilities of a binding effective lower bound for the federal funds rate and a flatter Phillips curve. Nominal-GDP targeting is equivalent to a single mandate and is found to be inconsistent with the dual mandate. Average-inflation targeting is found to have some advantages over the others.
“The FSA’s amortization requirements: Should they be abolished?“, discussion on Swedish Radio with Mikael Kulle and Henric Braconier (Chief Economist at the Swedish FSA), May 29, 2019 (Swedish).
I P1 morgon med Mikael Kulle och Henric Braconier, 29 maj 2019.
“The FSA’s amortization requirements: Mistaken reasons and negative effects,” report to the Stockholm Chamber of Commerce, May 27, 2019 (Swedish).
Finansinspektionen har de senaste åren infört amorteringskrav och genomdrivit en övrig åtstramning på bolånemarknaden. Detta har skett på felaktiga grunder, har negativa välfärds- och fördelningseffekter och försämrar bolånemarknadens funktionssätt. Syftet har varit att öka bolånetagarnas motståndskraft och minska risken för djupare lågkonjunkturer, men i själva verket minskar amorteringskraven motståndskraften och snarast ökar risken för djupare lågkonjunkturer. Detta hävdar jag i en rapport till Stockholms Handelskammare som presenteras idag. Rapporten. Bilder powerpoint pdf. Video.
Media: DI DN1 DN2 SvD
“The Fiscal Policy Council: ‘The concerns about Swedish household debt seem exaggerated’,” Ekonomistas post, May 13, 2019 (Swedish).
“Finanspolitiska rådet: Oron för hushållens skuldsättning och de makroekonomiska riskerna förefaller överdriven“, Ekonomistas-inlägg, 13 maj 2019.
Nils Åkesson, ”Oron överdriven” – tunga expertrådet svänger om skuldskräcken, Dagens Industri, 14 maj 2016.
“Sweden is not Denmark – a price fall of 40% may be required for amortization requirements not excluding the young,” Ekonomistas post, April 24, 2019 (Swedish)
“Sverige är inte Danmark – prisfall på 40% kan krävas för att amorteringskraven inte ska utestänga unga,” Ekonomistas-inlägg, 24 april 2019.
Jenny Petersson, “Låg ränta hjälper inte dem som stängs ute,” Dagens Industri, 27 april 2019.
“Amortization Requirements, Distortions, and Household Resilience: Problems of Macroprudential Policy II,” November 2019, paper.
Mortgage lending standards have tightened in Sweden in recent years, in particular through mandatory amortization requirements introduced by the Swedish FSA. The stated purpose is to increase the resilience of mortgagors to shocks, but it is shown that the resilience actually falls and that the tightening causes or worsens many distortions. Households without high income or wealth face higher barriers to entry into owner-occupancy. The mobility within the market for owner-occupied housing is reduced. First-time buyers without high income or wealth are excluded from the owner-occupancy market in Stockholm Municipality and many outsiders have to resort to a high-rent secondary-rental market. To prevent such exclusions, housing prices may have to fall by almost 40%. Less-than-high-income outsiders have higher housing user cost than high-income insiders. A less wealthy outsider has a higher user cost than a high-wealth insider with similar income. Mortgagors are forced to oversave and underconsume relative to their disposable income, and their consumption becomes more sensitive to income shocks. They have to save in illiquid housing equity instead of more liquid and diversified assets. They become less resilient to shocks for many years, for a very small gain in resilience later. Secondary-rental outsiders are forced to overpay, undersave, and underconsume, and their consumption becomes more sensitive to income shocks. They face less resilient to shocks, without any gain in resilience later. By design the amortization requirements make the amortization countercyclical, which makes consumption more procyclical and sensitive to income shocks. The tightening of lending standards reduces demand for and lowers the prices of housing. This in turn reduces already too-low housing construction and worsens the structural problem of excess demand for housing. The conclusion is that this example of macroprudential policy is counterproductive and harmful to social welfare and equity.
“Assessing risks to financial stability and macroeconomic stability from household debt,” presentation at Eurogroup meeting, Brussels, March 11, 2019.