UN BCRA 'WISCKSELLIANO', NO MONETARISTA

AM | @agumack

"Confidence, particularly in the value of money, is an essential factor in economic life" — Eric Kjellstrom

Un dirigente de la Unión Industrial Argentina, al enterarse que Stefan Ingves (gobernador del Riksbank, el banco central de Suecia) asesoraba a Federico Sturzenegger, preguntó: “Quiero saber qué tiene que ver la realidad de Suecia con la Argentina” [ver]. Con tono sarcástico, dejaba entrever su desacuerdo con la línea adoptada por el BCRA, acaso influenciada por el Sr. Ingves. "Nada de lo que ocurre en Suecia tiene que ver con nuestro país"—sería una manera de interpretar la posición de la UIA. Pero atención: ¡es un error! La experiencia del Riksbank tiene mucho que ver con la Argentina. Ya señalé la legendaria flexibilidad 'anti-convertibilidad' del banco central sueco ante el riesgo de deflación. De hecho, una política monetaria 'sueca' podría haber cambiado las cosas en la Argentina hacia 1998-2001.

Otro punto: cuando el Riksbank formula los principios de su política monetaria, Suecia es un país pequeño que vive de la exportación de commodities; su mercado de bonos no está desarrollado al nivel del inglés y estadounidense, y esto hace que la 'yield curve' en moneda local sea un indicador poco confiable. ¿Suena conocido? Ahora publico más detalles (y referencias) sobre esta gran tradición monetaria. La fuente es el excelente libro de Manuel Johnson y Robert Keleher, Monetary Policy: A Market Price Approach (Newport, Connecticut: Quorum Books, 1996 [ver]). Más precisamente, se trata del capítulo 13: "The Market Price Approach to 1930s Monetary Policy in Sweden". Aquí va parte del texto, con negritas mías. Luego haré un par de comentarios. Si hay interés publico más.

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The experience detailed here is that of the Swedish central bank (Riksbank) during the early 1930s. This experience, which was based on the theories of Knut Wicksell, is an example of a fiat currency/flexible exchange rate regime in which:

1. A short term bank interest rate was used as a policy instrument;

2. Market prices were used as policy guides or intermediate indicators; and

3. Price stability was the explicit goal of monetary policy.

Monetary or reserve aggregates were neither proposed nor employed as policy guides or targets in pursuing this price stabilization objective. This Swedish experience is important because it provides one of the few examples of a market price approach to monetary policy. This chapter demonstrates that the approach worked remarkably well. The Swedish monetary experiment was adopted as a result of theoretical developments and historical episodes prior to the 1930s that shaped Swedish monetary thought. In formulating procedures and guidelines for conducting policy under the new monetary standard in 1931, the Riksbank secretly solicited the advice of three prominent Swedish monetary economists: Cassel, Davidson and Heckscher. In late October 1931, these economists made recommendations for monetary policy.

The three economists unanimously recommended that Sweden mantain a paper currency and pursue price stability as long as unstable global monetary conditions persisted, in effect the Wicksellian approach to monetary policymaking. To establish public confidence in the Riksbank's policy, they recommended that these policies be announced and that a whole array of prices, including commodity prices, be monitored and assessed. It is notable that these economists did not recommend reserve or monetary aggregates as policy guides or targets [...] Historically, Sweden has been highly dependent on commodity exports and hence influenced by changes in commodity prices. Commodities such as steel, iron, pulp, paper, forestry products, and chemicals were particularly important for Sweden.

While a bond market existed, Swedish capital markets were not nearly as developed as those in other economies, such as Great Britain. Accordingly, the exchange rate and commodity prices were particularly important market price indicators for Swedish monetary policymakers. Another important ingredient was the influence and legacy of Knut Wicksell, described by Ohlin as the father of Sweden's monetary experience in the early 1930s. Wicksell became interested in monetary theory after observing nearly twenty-five years of deflation, after Sweden adopted the Gold Standard in 1873 and thus tied itself to world price movements, which were mostly in decline.Wicksell advocated inconvertible currency and flexible exchange rate regimes, clearly recognizing that price stability was the responsibility and key policy objective of the monetary authority.

Accordingly, he became the leading proponent of price stabilization as the objective of monetary policy. In developing the underlying theory for such arrangements, Wicksell assumed a closed 'pure credit' economy (or closed, inconvertible currency regime) to eliminate the complications of exchange rate movements. Developing an idea of Thornton (elaborated by Ricardo), Wicksell believed changes in monetary policy were affected by interest rate spreads: namely, by the divergence between an unobservable natural rate of return on investment and the central bank-controlled bank rate (i.e. the policy instrument). Perhaps because Sweden did not have a well-developped bond market, he did not describe how bond yields could be used as policy guides.
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