Friday, May 12, 2017

The evidence-based New Zealand housing price policies

Last week I reported some estimates of the long-run magnitudes of the effects of demand and supply measures on the New Zealand house price index. The question is what to do with this evidence.
It seems obvious from the data that the most effective way to dampen the house price increase is to increase the supply of housing.

Demand management is less effective and could be even damaging. It is rather silly to argue that a recession, caused by tight monetary policy (i.e., higher interest rate) or contractionary fiscal policy (i.e., new taxes), is needed to reduce housing prices and resolve the affordability problem.

Specific taxes may reduce speculative excesses. The Treasury knows all about the size, the efficacy, etc. but this is an election year and politicians would be reluctant to introduce new taxes.

Higher real house prices (i.e., adjusted for inflation) imply higher wealth for Kiwis. Wealth is not a bad thing, or is it? Recall that the main concerns about high house prices are about affordability and financial instability. Just as many Kiwis will benefit from having affordable housing many middle class Kiwis will lose from lower housing prices. Policy errors could send the whole economy into a deep recession because most of the assets held by New Zealanders are housing’s.

Also on the demand management side, restricting immigration has a small effect on housing prices as the data show, unless we have a huge reduction or shutting down the immigration program completely. In addition to immigration, there could be corporations, banks, or even nonresidents in additional to people buying houses in New Zealand. 

The price and the quantity (the number) of housing are determined (simultaneously) by the intersection of demand and supply. These curves shift up and down because of shocks. In absence of interventions, restrictions and regulations both the price and the quantity adjust until they settle at a new equilibrium.

That is not the case in reality. We have two independent regulations affecting the quantity and the price of housing.

First, we know that there have been increasing building regulations, requirements, and land restrictions among other regulations that affect the quantity of housing. These regulations (interventions) increased the cost, and essentially altered the slope of the supply curve of housing. When the demand for housing increases because of the increase in income, population, immigration etc. most of the adjustment to the shock, under such regulations, has to be in the price, naturally, because the quantity is restricted by regulations. Thus, more demand means higher prices.

Second, the RBNZ intervenes with different regulations to deal with the house price increase under the new, widely followed, international arrangements of maintaining financial stability.[1]  Central banks regulate credit flow. They essentially try to manage demand for housing.  However, the problem is initially on the supply side really.

So what we have is two different regulators regulating the price and the quantity in the housing market, independently and fully discretionary, making it impossible for prices and quantities to adjust to shocks. The natural mechanism of adjustment in the housing market is impaired and it has no chance of working under these sorts of regulations.

To resolve the housing problem we have to allow the quantity of housing to vary by increasing the supply of housing (i.e., relaxing restrictions on the quantity of housing). This will bring the housing price down. One hundred thousand new building consents reduce the price house index by about 7000 index points. However, we should also allow the price of housing to vary (i.e., by relaxing the restrictions on credit and the banking system). Otherwise, we will continue to have adjustment problems in the housing market.

New Zealand banking system is good by international standards. Credit rating is Aaa. The global financial crisis did not affect us because the banking standards are high. Banks know best how to lend, to whom, and at what price, under the RBNZ’s banking supervision guidelines. These guidelines have been in place for some time; they are well tested. Therefore, to bring the housing market back to normal by removing restrictions on the supply side, discretionary intervention in the credit market needs reexamination.


razzakw@gmail.co 

[1] Macro-prudential policy is a discretionary regulatory intervention aims, in this case, at restricting credit in housing market when the central bank thinks there are “bubbles” or “speculative excesses” in order to prevent “systemic risk” and financial instability. Read Lars P. Hansen “Challenges in identifying and measuring systemic risk,” CEMFI working paper No. 1305 www.cemfi.es. I have written about this before (see older blogs) and I still believe that it is quite murky area in economic policy. 

Sunday, April 30, 2017

New Zealand House Price, Bubbles and Immigration

Many people seem to link high housing prices with bubbles and immigration. This is an election year so more will be said as the date of the election draws closer. Unfortunately, I have not seen any economic analysis and measurements except from some graphs and some stories, here and there.

I think that bivariate graphs are fine, but uninformative of a multivariate problem like this one. It is quite common to eyeball a strong graphical correlation, which disappears in regression analysis. Some stories, however, are reasonable. For example, expansionary (i.e., loose) monetary policy usually results in credit expansion, which leads to a higher demand for housing, and higher prices. I showed in a blog before that excess supply of money is also correlated with higher housing prices at a reasonable lag. Some dismiss money and talk about low interest rate instead. Fine too, because a lower interest rate increases the demand for money and credit and leads to higher asset prices. There is a general agreement that looser monetary policy also stimulates output (GDP) in the short run. It ends up opening a positive output gap whereby GDP exceeds its long-run potential over the business cycle. That must have an effect on the demand for housing, hence high housing price. These stories are fairly grounded in economic theory.

 Housing supply issues are also widely acknowledged. Finally, the story that an increase in immigration could add a demand pressure on housing, why not? But where is the test? The graph shows cyclical variations in the housing price index and net immigration. There is a weak correlation (0.30), where immigration leads, but totally breaks down in 2008.


Bubbles mean that the increase in housing prices is not justified by the economic fundamentals. I think that there is no reliable statistical test for bubbles and I have not seen a credible and convincing proof for bubbles. However, when the supply of housing is fixed for whatever reason then shocks that shift up the demand for housing (imagine a downward slopping curve intersecting the vertical supply curve) will only result in ever higher housing prices. This is quite easy to understand. 

Here are some simple measurements. I estimate a simple equation for housing prices in New Zealand, whereby the level of the house price index (base=1000) depends on aggregate income (GDP), which reflects money and credit markets, interest rate, fiscal policy factors….etc. (think about the goods and money markets).[1] It also depends on a measure of the supply of housings, which I approximate by the ratio of the value of new building consents / the value of the existing stock of housing. Finally, we have net immigration as an addition explanatory.[2]

Looking at the estimated long-run equilibrium of the model and the actual housing price index shows no bubbles whatsoever. The housing price fluctuates around the equilibrium closely. It was above equilibrium from 1996 to 2000; slightly overshot its equilibrium value in 2015; and less than or equal to equilibrium during the rest of the period.



The coefficient of net immigration, conditional on demand and supply factors, is 0.015 (with a standard deviation of 0.0055). So an increase (decrease) of 50,000 people leads to an increase (decrease) in the housing price index by 750 points, e.g., from 1000 to 1750. That is a growth of 75 percent. GDP has a larger effect on housing prices. The coefficients is 0.059 (with standard error 0.0050). The supply factors have a coefficient of -0.07 (standard error 0.0550). An increase in new building consents relative to the stock of housing lowers the housing price index. This is a very large coefficient. An increase of 100,000 new building consents lowers the housing price index by 7000 points.  

Unfortunately I do not have data for Auckland and other regional housing markets so my analysis is restricted to New Zealand as a whole. I hope that this is a useful analysis. Someone may want to take it further, which could shed more light on the matter. Panel data analysis could be done if regional data are available. 


[1] We cannot have credit in the model because it is highly correlated with GDP. The same is true for money.

[2] The equation is estimated over the period Mar 1996 to Dec 2016 using two-sided Dynamic-OLS (Phillips-Loreatn, 1991). This is a most efficient estimator. It is equivalent to a system of equations and accounts for endogeneity and serial correlation. Housing price index is regressed on a constant term and the levels of GDP, the ratio of new building consents / housing stock ratio, and net immigration; the growth rates of these three variables; one lag and one lead of the growth rates (i.e. the two-sidedness); and an error correction term. It assumes that the levels are integrated of order 1, and cointegrated. Standard errors are consistent Newey-West. The data are from the RBNZ website. Monthly new building consents are from Stat NZ. It includes residential buildings, houses, apartments, townhouses, and retirement village units. I ignored public building and constructions.     


Friday, January 20, 2017

The U.S. Presidents and the Economy?

The U.S. has a new president. Hopes are for a better economy. The U.S. presidents could affect the lives of millions, some for better and some for worse. The question is how do they affect the average. The affect the macro-economy primarily via their tax policies because taxes, whether on labor income or capital, affect productivity, labor supply and capital accumulation. Most economists agree that taxes have real effects. Other policies such as the spending on infrastructure, defense, the environment, health, education, R&D and social policies can also have some effect on growth and income per capita. However, there is no consensus about the empirical size of the average effects of these policies. The president's policy effects on growth may take a much longer time than the time he spends in office. These policies also change, and expected to change, from one president to another. A tax reduction today may well mean a tax increase tomorrow.  

Here are the average growth rates of real GDP and real GDP per capita for the periods of the presidencies of Carter, Reagan, Bush I, Clinton, Bush II, and Obama. GDP may not be a perfect measure of well being, but that is the only measure available today. These growth rates did not vary across presidents significantly, except for the Obama presidency. For him, the growth rates are relatively lower than the rest and lower than the overall averages from 1977 to 2015. However, the Obama presidency coincided with the global financial crisis and the Great Recession from October 2007 to April 2009. The U.S. economy also experienced recessions during Bush I and Bush II presidencies. For Bush I, there was a recession from October 1989 to January 1991. For Bush II, there was a short recession from January 2001 to July 2001. In these three presidencies, the growth rates were relatively lower. However, there is no evidence that presidents Bush I, II, and Obama caused these recessions just as there is no evidence that Carter, Reagan, and Clinton caused the expansions.The people were equally better off during the Reagan and Clinton eras even though they are two different presidents with very different policies. 


Average of Annual Real GDP and Real GDP per Capita Growth Rates (%)

GDP
GDP per Capita
Std.
Carter
1977-1981
3.2
2.2
2.5
Reagan
1981-1989
3.5
2.6
2.6
Bush I
1989-1993
2.3
1.1
1.8
Clinton
1993-2001
3.9
2.6
0.8
Bush II
2001-2009
2.1
1.2
1.3
Obama*
2009-2016
1.5
0.4
1.9
Std. is the standard deviation. These are almost the same for both growth rates.
Asterisk: data are up to2015.
Red color denotes growth below the overall average and periods included recessions.
The data source is the Federal Reserve Bank of St. Louis. 




Wednesday, January 18, 2017

Iraq: education from 3000 B.C. to date

A few weeks ago I showed that Iraq has not published data on education since 2003. The wars, the UN sanctions, and lastly the invasion in 2003 had adversely affected education. Historically, Iraq has been the cradle of civilization and its history is associated with a lot of human capital. In this blog I retell the stories of the Sumerian education system since 3000 B.C. from Kramer (1956) classic work. Unlike Iraq today, their ancestors, the Sumerians,  recorded everything.

In "History Begins At Sumer," Samuel Kramer (1956) talks about the discovery of the first ever written document in the world. It was found in Erech in Southern Iraq. It included more than a thousand small tablets inscribed with economics and administrative memos. The Sumerian invention of the Cuneiform system of writing led to the establishment of he first school in the history of mankind. Some of the tablets were designed for study and practice. That suggest that 3000 B.C. Sumerians thought about teaching and learning. In 1902-1903 a considerable number of school textbooks were dug out in ancient Shuruppak the home city of the Sumerian Noah. These textbooks dated from about 2500 B.C.


The school system in Sumer flourished in the last half of the third millennium. Thousands of tablets were excavated. There were junior and high scribes, royal and temple scrips, some were administrative and others became high government officials.

During the first half of the second millennium, hundreds of practice tablets, which contained exercises prepared by the students as part of the daily schoolwork. Some were scratches of first-graders while others were written by graduates. Tablets written by the teachers were also excavated, which have information about school life, objectives, curriculum and teaching methods.

The objective of the Sumerian school system was to train scribes whose writing skills were needed to maintain the administrative and economic systems in the land. Some graduates would serve the palace while others would work at the temple. Over time, the schools progressed to become the center of culture in Sumer. Scientists who studies theology, botanical, zoological, geographical, mathematical, grammatical, and linguistic. Schools were also centers for creative writing. Although schools served the temple and the palace primarily, they became more secular over time. The curriculum became more secular.

The tablets also indicate that education was neither compulsory nor universal. Students pay tuition fees, which cover the salaries of the teachers.  In 1946 a German Cuneiformist Nikolaus Schneider proved that only the rich were able to send their kids to school.  He compiled a list of the names of five hundred students and the occupations of their fathers. The information was taken from thousands of tablets. The tablets also reveal that only males were listed as scribes. The head of the school was called the school father. The assistant professor was called the big brother whose duties include preparing the tablets for the students and hear them recite the material from memory. Other faculty were the man in charge of drawing, the an in charge of services, and the man in charge of the whip. Obviously meant the man responsible for disciplining the students. There were caning and punishments. 

There is a large amount of information about the schools curriculum. The actual work of the students are found. The work includes tablets written by beginners and others written by advanced students. The differences were clear. The work of advanced students is indistinguishable from the work of the professors.  The curriculum covers two groups: a semi scientific and scholarly and the literary and creative. The first was developed out of the school's objective, which was to teach the students the writing of the language. They classified the Sumerian language into groups in related word and phrases and had the students to memorize them, and copy them until they could reproduce them. Textbooks are found. They became complete in the third millennium B.C. and they got standardized allover the Sumerian schools. They included names of trees and reeds, animals including birds and insects, cities, towns, and villages, and stones and minerals. The way the material was compiled is consistent with botanical, zoology, geographical, and mineralogical grouping. Tablets of various mathematical problems were also found in large numbers. Other tablets contained linguistic and grammatical problems. Some were inscribed with long lists of complexes and verbal forms.Most interestingly, the Sumerians developed the first ever dictionary. That was a result of the conquest by the Semitic Akkadians in the last quarter of the third millennium. The Akkadians borrowed the Sumerian script and studied and imitated the literary work long after the Sumerian language became extinct as a spoken language.  

Kramer says that hundreds of tablets of literary work were written in the forms of poems from as long as 50 lines to a 1000 lines. The excavated material included myths and epics in the forms of narrative poems about gods and heroes; hymns of gods and kings; and passionate expressions of sorrow and sadness for the destruction of Sumerian cities. They also included wisdom compositions, which included proverbs, fables, and essays. A large number of the tables were the work of students.

In summary, Mesopotamia, which is the modern day Iraq, was indeed the birthplace of education and schooling, among other things. Kramer recorded thirty nine "first" cases in history found in Sumer 5000 years ago. The process of creating and accumulating knowledge has been interrupted repeatedly through out the history of the region and for different reasons. The Mongols destroyed everything in Iraq in 1258, but Iraq rose again. The history of Iraq is long; it is not the end of history yet. 


    

Wednesday, December 28, 2016

The post 2003 Iraqi economy in numbers (part ten)


The distance from the frontier

Halfway

The new statistics the World Bank like to publish are indicative of the progress of the free market.
One widely publicized statistic is the distance from the frontier . It measures the distance of a certain economy to the frontier, which represents the best performance observed on each of the indicators across all economies. An economy's distance to the frontier from zero to 100, where 0 represents the lowest performance and a 100 represents the frontier. For example, a score of 75 in 2016 means an economy is 25 points away from the frontier constructed from the best performances across all economies and across time. A score of 80 in 2017 would indicate the economy has improved. 

Iraq's score post-2003 is somewhere between 45 and 50 on average. So Iraq is halfway from 100. It is better than Iran, but worse than almost all Arab countries such as Bahrain, Kuwait, Oman, Jordan etc. In the table below are World Bank statistics about time needed to start and run a business. It takes a year to build a warehouse, two years to enforce a contract, and two months to get electricity...etc. One could register a business and be ready to work in one or two days in advanced Western economies, This would give you an idea about the state of the market in Iraq. Iraq is not good for business 13 years after the system has changed.



Doing Business Statistics

Post 2003
Time required to build a warehouse (days)
224
Time required to enforce a contract (days)
520
Time required to get electricity (days)
58
Time required to obtain an operating license (days)
19.4
Time required to register property (days)
51
Time required to start a business (days)
30.3
Source: World Bank



 ممارسة أنشطة الاعمال 

منتصف الطريق

يقوم البنك الدولي بنشر مؤشرات حول التقدم الذي يجري تجاه تعميق كفاءة اقتصاديات السوق المفتوح. ويسمى التقرير "ممارسة أنشطة الاعمال) ويمكنني ترجمة المؤشر الذي يبلور مجموعة من المؤشرات "بالمسافة من الريادة" أو "المسافة من المقدمة" اذا صح التعريب. ويعني ان هناك دول في المقدمة واخرى في المؤخرة ودول عديدة فيما بينهما. والمسافة تقاس على معيار بين 0 و100 حيث ان 100 تمثل احسن اداء وفي الريادة و 0 في المؤخرة. فعلى سبيل المثال، اذا كان الرقم 75 غي سنة 2016 فهذا يعني ان هذا الاقتصاد يبعد 25 نقطة من الريادة.

حصل العراق على متوسط مقداره 45 الى 50 في السنوات بعد 2003. وبما انه بعيد عن 100 وفي منتصف الطريق الا انه أفضل من ايران على سبيل المثال ولكن ليس أفضل من الكويت أو المغرب أو لبنان أو البحرين أو مصر أو الاردن أو عُمان. هذا ليس مشجعاً.

وبما ان الوقت ثمين والبلدان تتنافس باستمرار في المجالات الاقتصادية، فالبنك الدولي ينشر بيانات حول بناء الاعمال الاقتصادية والتجارية من حيث علاقتها بالوقت.  ففي الجدول اعلاه نرى ان بناء مستودع في العراق يحتاج الى سنة من الوقت، وحوالي سنتين لتطبيق عقد تجاري معين، و شهرين للحصول على كهرباء، وشهرين لغرض تسجيل شركة...وعند المقارنة مع دول الريادة مثلاً نيوزيلندة، نجد انه يمكن تسجيل شركة واجراء كل المتطلبات والبدء بالاعمال التجارية في يوم أو يومين حسبما ورد في بيانات البنك الدولي.

ان هذه البيانات تلخص الوضع الاقتصادي في العراق بعد 2003. ببساطة متناهية: ليس هناك تطور.

The post 2003 Iraqi economy in numbers (part nine)

The government

In deficit and in debt 

No data are reported for the period 1968 to 1979. However, the fact is that the period witnessed a positive terms-of-trade shock, i.e., high oil prices in real terms, which have created a surplus in the budget and financed unprecedented development plans. My back-of-the-envelope calculation using oil production data and the price of oil (in 2014 US dollar prices) from BP, I estimated the revenues to be about equivalent to 75 billion US dollars in 1979.

Higher oil prices post-2003 notwithstanding, the fiscal balance as a percent of GDP was negative (i.e., expenditures exceeded the revenues). The government financed the deficit by borrowing. Gross debt exceeded GDP, and the current account is surprisingly not negative though close to zero. According to the World Bank data, it means that Iraq is exporting just a little more than importing, and saving just a little, more than it is investing. I am not sure one can trust these statistics. However, all these three statistics are expected to worsen in the next few years.

According to the IMF World Economic Outlook for the period 2016 to 2012, Iraq is projected to run a fiscal deficit until 2019, a current account deficit until 2021, and the average gross debt to GDP ratio over the period 2016 to 2021 is projected to be around 60 per cent of GDP. The data are plotted in figure (1). These are projections seem sensible, but they should be taken cautiously.

Government statistics

2004-2016
Fiscal Balance as a percent of GDP
-4.7
Gross government debt as a percent of GDP
103.2
Current account balance as a percent of GDP
1.14

Source: World Bank Development Indicators



The assessment of the sustainability of the debt requires long-term projections of the population. However, the IMF projections of the fiscal deficit indicate that the debt is probably sustainable.
The debt / export ratio also matters for the sustainability of the debt, and that is dependent on the amount of oil Iraq exports and on the price of oil because Iraq hardly exports anything else. Exports growth have declined substantially post 2003, and exports as a percent of GDP has declined post 2003

Imports and Export Period Averages

1968-1979
Post 2003
Imports of goods and services (% of GDP)
30.3
38.6
Exports of goods and services
(% of GDP)
51.03
41.28
Average growth rate of imports
29.87
5.33
Average growth rate of exports
30.76
7.46
Source: World Bank Development Indicators

That said, Iraq will probably need a very long time to pay the debt.

 الميزانية الحكومية

عجز مالي ودين كبير

لا توجد بيانات للفترة من 1968 الى 1979. ولكن، تلك الفترة شهدت ارتفاع كبير في اسعار النفط كان لا بد وان ادى الى فائض في ميزانية الدولة. وكما بينت سابقاً وحسب حساباتي وباستخدام بيانات شركة النفط البريطانية عن الانتاج والاسعار، بأن واردات النفط كانت قد وصلت في نهاية سنة 1979 الى 75 مليار دولار امريكي بقيمة دولار سنة 2014. ولكن ارتفاع اسعار النفط بعد 2003 وبشكل كبير لم تحدث تنمية مشابهة لتلك التي حصلت في السبعينات من القرن الماضي. لقد بلغ العجز في الميزانية -4.7 من الناتج المحلي الاجمالي خلال السنوات 2004 الى 2016. لذا فقد شرعت الحكومة الى الاقتراض – في الحقيقية يقوم صندوق النقد الدولي باقراض العراق باستمرار لملافاة العجز في الميزانية – حتى بلغت الديون 103.2 بالمئة من الناتج المحلي الاجمالي. وبلغ الحساب الجاري 1.14 بالمئة من الناتج المحلي، رغم اني توقعته ان يكون سلبياً أيضاً.

فيما اذا كانت هذه العجوزات مستدامة ويمكن تحملها أم لا في المدى البعيد يعتمد على اسعار النفط والتصدير والمصاريف الحكومية المستقبلية ولسنوات طويلة والنمو السكاني. ليس لدينا ارقام وتوقعات رسمية طويلة الامد. ويبدو ان صندوق النقد الدولي يعتقد بأن الدين العراقي يمكن للعراق تحمله ربما لان اسعار النفط سترتفع بما فيه الكفاية كما يعتقدون. وتشير توقعات الصندوق المنشورة في اكتوبر 2016 الى العجز في الميزانية سيتلاشى تدريجياً بنهاية 2019 والدين سيصل الى 60 بالمئة من الناتج المحلي في سنة 2021 وكما مبين في الرسم البياني. أما نسبة الدين الى الصادرات فتؤثر كثيراً على المقدرة على تحمل الدين أم لا. وتعتمد هذه النسبة اساساً على سعر النفط والكمية المصدرة. يبدو ان توقعات زيادة الانتاج النفطي وتوقع ارتفاع اسغار النفط قد اُخذت بنظر الاعتبار عند حساب هذه التنبؤات. لاحظ ان التصدير كنسبة من الناتج المحلي وكمعدل نمو قد انخفض كثيراً بعد 2003 قياساً بما كان عليه في 1968-1979 وكما مبين في الجدول.




The post 2003 Iraqi economy in numbers (part eight)

Inflation, money and the exchange rate

Different measures

Inflation is the rate of change in the consumer price index from one period to another. It is very difficult to tell what the inflation rate is in Iraq. Generally, inflation in the Arab countries does not reflect the true underlying inflationary pressures because of price subsidies and other regulatory measures.

The table indicates a high inflation rate, the average has doubled or more than doubles, after 2003. These estimates are based on the World Bank Development Indicators and the IMF World Economic Outlook. The average inflation rate increased from around 6 per cent during the period 1968-1979 to double digits between 13 and 12 per cent. Double-digit inflation rate reduces the real purchasing power, distorts spending decisions, misallocates resources, erodes wealth, and reduces economic growth.

The Central Bank of Iraq reports some incoherent CPI data, which include missing observations and change in definition and measurements, and base-years. These statistics indicate no inflation between 2009 and 2014.

The central bank of Iraq also reports data on base money and a higher aggregate (M2) for the period 2004 to 2014. I computed the growth rates to be 16.9 and 20 per cent respectively. Average real GDP growth reported earlier for more or less similar period was either 9 per cent or 5.4 per cent as reported by the World Bank and the Conference Board. Assume that the change in the velocity of money is zero, the implied inflation rate by the Quantity Theory of Money would be somewhere between 5.9 (lower bound) and 14.6 (upper bound) percent. Thus, the estimates reported in the table below seem ballpark correct.

Inflation is a tax. Inflation hurts low-income people. The inflation tax on the real money balances varies with the measurement of inflation. The inflation tax is the product of these growth rate of money and inflation.

Fixing the exchange rate requires maintaining the quantity of the U.S. foreign reserves such that the ratio of the quantity of domestic money / fraction of U.S. dollar reserves, is equal to the exchange rate. With the oil price falling, the quantity of the U.S. foreign reserves must have fallen. To keep the exchange rate (the ratio above) fixed, either the supply of money is reduced or the level of the U.S. foreign reserves increased (e.g., by borrowing maybe). There is no evidence that the money supply has been reduced, maybe because of concerns about the liquidity of the banking system, and Iraq has borrowed U.S. dollars from the IMF. That was the quantity story of fixing the exchange rate. From the price side, however, to keep the exchange rate fixed, i.e., the expected depreciation rate, the Uncovered Interest Rate Parity condition implies that the interest rate in Iraq must be equal to the U.S. interest rate, or close to it. This is clearly the case in almost all the GCC countries which have a fixed exchange rate regime. The central bank of Iraq policy interest rate from 2002 to 2016 reported on the central bank’s website and the U.S. effective federal fund rate (ffr) are plotted in the figure below. The same should be true for the overnight interbank rate, but I could not find data for this rate in Iraq. The difference between the Iraqi and US short term policy rates is staggering. This policy set-up in Iraq is puzzling.

Average Inflation

1968-1979
Post 2003
Inflation (CPI)*
6.3
13.7
Inflation (CPI) **
-
12.8
* The World Bank Development Indicators (2003 – 2015)
** IMF World Economic Outlook Estimates (2005 – 2015)





 التضخم النقدي

 قياسات مختلفة جداً

التضخم النقدي هو النسبة المئوية للتغير في اسعار السلع والخدمات. وتقاس اسعار السلع والخدمات عادةً برقم قياسي، في الغالب السعر القياسي لاسعار السلع الاستهلاكية. من الصعب ان نقدر التضخم النقدي في العراق وفي اغلب الدول العربية لان الاسعار عادةً ما تكون مدعومة من قبل الدولة بالاضافة الى وجود كثير من الضوابط والقيود على الاسعار. أي ان الاسعار لا تعكس التضخم الحقيقي في الاقتصاد. وفي الغالب يكون التضخم المعلن أقل مما هو عليه في حقيقة الامر. ليس لدي بيانات عن الدعم في العراق ولكن الجدول يشير الى ان متوسط التضخم قد تضاعف خلال الفترة 2003 الى 2015 قياساً بفترة 196-1979، من حوالي 6 بالمئة الى اكثر من 12 بالمئة حسب بيانات البنك الدولي وصندوق النقد الدولي. يعتبر التضخم النقدي الذي يتجاوز 9 بالمئة (اي 10 فما فوق) عالٍ ومُضِر لانه يقلل من القدرة الشرائية للمستهلك ويؤثر سلبياً على قرارات الفرد الاستهلاكية والاستثمارية ويبعثر الموارد ويدمر الثروة ويقلل من النمو الاقتصادي.

وينشر البنك المركزي العراقي بعض الارقام كمعدل التضخم النقدي من سنة 2002 الى سنة 2009 ولكنها مبعثرة وغير مفهومة وتحتوي على فراغات وتغير في سنة الاساس. وتشير البيانات الى عدم وجود تضخم نقدي خلال السنوات 2009 الى 2014. ويشير التقرير السنوي للبنك المركزي لسنة 2003 (صفحة 10) الى ان التضخم النقدي "يُتوقع" ان يكون أقل من 2 بالمئة في سنة 2004. ولكن في التقرير السنوي لسنة 2005 – الفصل الثالث – يشير الى ان التضخم النقدي كان 37 بالمئة في سنة 2005. وفي التقرير السنوي لسنة 2014 كان التضخم النقدي "الاساس" الذي يستثني النفط والمواد الغذائية الزراعية (ربما؟) 2.4 بالمئة سنة 2013 و 1.6 بالمئة سنة 2014.

وينشر البنك المركزي العراقي أيضاً بيانات عن كمية النقد المتداول كالقاعدة النقدية ومقاييس اكثر شمولية تتضمن حسابات اخرى للسنوات 2004 الى 2014. وحسب تقديري فان كمية النقود قد نمت بمتوسط مقداره 16.9 و 20 بالمئة للمقياسين اعلاه على التوالي خلال تلك الفترة. ان نمو كمية النقد يجب ان مرتبطة بتضخم نقدي. وبما ان متوسط نمو الناتج المحلي الحقيقي كان بحدود بين 5.4 و 9 بالمئة حسب البيانات المختلفة المتوفرة لدينا من قبل البنك الدولي والكونفرنس بورد، واذا افترضنا بأن سرعة دوران النقد صفر، فان متوسط التضخم النقدي خلال الفترة 2004 الى 2014 حسب النظرية الكمية النقدية يكون بين 5.9 و 14.6 بالمئة كحدين ادنى واعلى. وكما يبدو ان هذه الارقام ليست بعيدة عن تقديرات التضخم النقدي.
واذا ما افترضنا بان التضخم النقدي ظاهرة نقدية دائماً وفي كل مكان، فان التضخم يعتبر ضريبة على الطلب على النقد. التضخم النقدي يؤذي الفقراء اكثر من غيرهم لان نسبة الاستهلاك من الدخل تكون عالية عند الفقراء. من الممكن حساب هذه الضريبة فهي حاصل ضرب متوسط معدل نمو كمية النقد ومتوسط التضخم النقدي.

ان سياسة سعر الصرف الثابت مقابل الدولار الامريكي تعني الحفاظ على كمية النقود بالدينار / نسبة من الاحتياطي الاجنبي، مساوية لسعر الصرف. ان انخفاض اسعار النفط يؤدي الى قلة الاحتياطي من العملة الصعبة (الدولار) مما يرفع من سعر الصرف اعلاه (اي يقلل من القيمة الحقيقية للدينار). ويتطلب الحفاظ على سعر الصرف الثابت اما زيادة الاحتياطي الاجنبي بطريقة أو باخرى (كالاقتراض بالدولار من الخارج) أو بتقليل كمية عرض النقد المحلي (اي خفض التضخم النقدي). ولكن ليس هناك دليل على خفض كمية عرض النقد في العراق ربما لان البنك المركزي لا يريد ان يقلل من كمية النقد المتداول بسبب مخاوف زعزعة الاستقرارالمالي. هذا من الناحية الكمية ولكن من ناحية السعر، فان تثبيت سعر الصرف يتطلب ان يتساوى سعر الفائدة القصيرة المدى للبنك المركزي العراقي مع سعر الفائدة الفديرالي الامريكي أو أن يكون مقارباً جداً له كما تقتضيه "ازدواجية سعر الفائدة غير المغطاة" وكما هو الحال في دول مجلس التعاون التي ترتبط عملاتها مباشرةً بالدولار. ولكم كما نرى في الرسم البياني فان الاختلاف بين سعر الفائدة الذي يحدده البنك المركزي العراقي اعلى كثيراً من سعر الفائدة الذي يحدده البنك الفديرالي الاحتياطي الامريكي. لم اجد سعر الفائدة الذي تقترض البنوك المحلية العراقية من بعضها البعض بموجبه والذي يجب ان يكون مقارب جداً لسعر الفائدة الامريكي.هذا الاختلاف محير جداً ويصعب تفسيره.