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=IÇå(481–843)
ã¡5 µ[£2018¤"
% (EƲLÆ) 1ù î 3 / 60
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nù2(742-814)
ã¡5 µ[£2018¤"
% (EƲLÆ) 1ù î 4 / 60
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©n=I
Source: https://www.edmaps.com/charlemagne__empire_verdun_partition_843.jpg.
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ã¡5 µ[£2018¤"
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ã¡5 µ[£2018¤§lmOtto I (912–973), Wilhelm II (1859–1941), and Adolf Hitler (1889–1945)"
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1. î³Úî¤ 1.1 
.ïµ1870–1914
Data Source: Jorda-Schularick-Taylor Macrohistory Database.
% (EƲLÆ) 1ù î 8 / 60
1. î³Úî¤ 1.1 
Hobsbawm(1989): The Age Of Empire 1875–1914
The redistribution of economic power and initiative, that is to say on
Britain’s relative decline and the relative – and absolute – advance of the
USA and above all Germany. In principle, it is not really surprising that
Germany, its population rising from 45 to 65 millions, and the USA, growing
from 50 to 92 millions, should have overhauled Britain, both territorially
smaller and less populous.
The developed world was not only an aggregate of ‘national economies’.
Industrialization and the Depression turned them into a group of rival
economies, in which the gains of one seemed to threaten the position of
others.
% (EƲLÆ) 1ù î 9 / 60
1. î³Úî¤ 1.1 
Hobsbawm(1989): Protectionism and Trade War
Protectionism seeks to barricade each
nation-state economy against the foreigner
behind a set of political fortifications, is
harmful to world economic growth.
Starting with Germany and Italy (textiles) in
the late 1870s, protective tariffs became a
permanent part of the international
economic scene, culminating in the early
1890s in the penal tariffs associated with
the names of MWline in France (1892) and
McKinley in the USA (1890).
Note: Average level of tariff in Europe,
1914. The data of U.S.A. is lowered from
49.5% (1890), 39.9% (1894), 57% (1897),
and 38% (1909). The data is orginal from
Sidney Pollard, Peaceful Conquest: The
Industrialization of Europe 1760?1970
(Oxford 1981), p. 259.
% (EƲLÆ) 1ù î 10 / 60
1. î³Úî¤ 1.1 
Ô
Hobsbawm(1989): ‘Territorial expansion’, said an official of the US State
Department in 1900, ‘is but the by-product of the expansion of commerce.’
% (EƲLÆ) 1ù î 11 / 60
1. î³Úî¤ 1.1 
2IµúÅÔK]
Source: Romer, D. 2012,
Advanced Macroeconomics,
McGraw Hill Higher Education.
British military spending as a
share of GNP (relative to the
mean of this series for the full
sample) and the long-term
interest rate.
Note: Wikiwand provides more
information of war involving
U.K.
% (EƲLÆ) 1ù î 12 / 60
1. î³Úî¤ 1.1 
2IµúÅÔK]£Y¤
Note: “Debt Ratio of Four Countries: 1800 – 1950”, with data from Historical Public Debt Database(IMF). The dotted red line
for the American Civil War, the dotted blue line for WWI and WWII.
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1. î³Úî¤ 1.2 î¤
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1951 !¿!éI!Ö!'!©6I\¾5ni^6§¤áî³u(ÚgcÓN"
1957 5Ûê^6\½§¤áî³fUÓNÚî³²LÓN§1958c11F)"
1965 þã6I\¾5Ù°l^6§û½òî³ugÓN!î³fUÓNÚî³²
LÓNÚå5§Ú¡î³ÓN§^u1967c71F)"
1979 áî³À1NX£EMS¤Úî³®ÇÅ£ERM¤"
1987 îNn¯¬\Ý5üî³Y6§(á1992c¢yû¬!]!NÄågd
6ÄÚ½|8I"
1991 5êdApâA^6òîN=.î³é£EU¤§u1993cª)"
1992 uERMÅ"
1993 î½xMIO§¦\\îI[AT\\ERM/EMS¿3½
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1997 5½Oú6£SGP¤5½\\îãý5K"
1998 ¤áî³¥Õ1£ECB¤"
1999 1999c11Fåîm©3c!'!!!¥!Ö!©!O!¿!ÄÚÜ11I
[Pâü §u2002c11Fm©ª6Ï"
% (EƲLÆ) 1ù î 14 / 60
2. `À1«nØî«üµe 2.1 `À1«
ïá`À1«nØIO
r¦I[\\`À1«£optimum currency area§OCA¤½
À1é£monetary union¤Ïµ
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©Ûüѵ½üæ^V|ÎüÑ£two-pillar strategy¤§=ÏL²
L©Û£Economic Analysis¤'5²L$1G¹§ÏLÀ1©Û
£Monetary Analysis¤'5À1Ú7K½|G¹"
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²LOÇ
% (EƲLÆ) 1ù î 26 / 60
3. î«uÐ(¸ 3.1 uÐKÜ
ÏÀ)ä
Note: Annual growth rate of “Consumer prices” from BIS. The dotted lines indicate 1999 and 2008.
% (EƲLÆ) 1ù î 27 / 60
3. î«uÐ(¸ 3.1 uÐKÜ
Ï|Ç
Note: “Long-term interest rate statistics” from ECB. The dotted lines indicate 1999 and 2008.
% (EƲLÆ) 1ù î 28 / 60
3. î«uÐ(¸ 3.1 uÐKÜ
ÇNĤ
Source: Gros(2012). The right figure is the unit labor cost with 1999 as base year.
% (EƲLÆ) 1ù î 29 / 60
3. î«uÐ(¸ 3.1 uÐKÜ
uÐKܵ(
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î«NÄå½|3ÅÚܧÏ5wIü NĤª
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É5*"
% (EƲLÆ) 1ù î 30 / 60
3. î«uÐ(¸ 3.2 ï(¸
²~8ï
Source: Holinski et al.(2012). Source: Wikipedia.
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3. î«uÐ(¸ 3.2 ï(¸
$|Ç&^*Ü
% (EƲLÆ) 1ù î 32 / 60
3. î«uÐ(¸ 3.2 ï(¸
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Note: “Budget Deficit and Public Debt to GDP: 2009 and 2012”, from Wikipedia, original data from EuroStat.
% (EƲLÆ) 1ù î 33 / 60
3. î«uÐ(¸ 3.2 ï(¸
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% (EƲLÆ) 1ù î 34 / 60
3. î«uÐ(¸ 3.3 îÅÅ
î³IÌÅÖ|Ç
Source: Koo(2014).
% (EƲLÆ) 1ù î 35 / 60
3. î«uÐ(¸ 3.3 îÅÅ
îÅÅA
MBAlib/î³ÅÖÅ0c^
2009c12§ISnµ?ÅUeNF1Ì&^µ?§¿òÙµ?Ð
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European Debt Crisis
2000s European sovereign debt crisis timeline
% (EƲLÆ) 1ù î 36 / 60
3. î«uÐ(¸ 3.3 îÅÅ
îÅÅ å
Wiki: Causes of the crisis varied by country.
Ireland: private debts arising from a property bubble were transferred
to sovereign debt as a result of banking system bailouts and
government responses to slowing economies post-bubble.
Greece: high public sector wage and pension commitments were
connected to the debt increase.
Cyprus: European banks own a significant amount of sovereign debt,
such that concerns regarding the solvency of banking systems or
sovereigns are negatively reinforcing.
% (EƲLÆ) 1ù î 37 / 60
3. î«uÐ(¸ 3.3 îÅÅ
îÅÅü?
ã¡5 µÚÕ"
% (EƲLÆ) 1ù î 38 / 60
3. î«uÐ(¸ 3.3 îÅÅ
îÅÅÏmî³1À1*Ü
Source: Wikipedia.
% (EƲLÆ) 1ù î 39 / 60
3. î«uÐ(¸ 3.3 îÅÅ
AéîÅÅÙ¦ü
EU emergency measures
European Financial Stability Facility (EFSF)
European Financial Stabilisation Mechanism (EFSM)
Brussels agreement and aftermath
European Stability Mechanism (ESM)
European Fiscal Compact
% (EƲLÆ) 1ù î 40 / 60
3. î«uÐ(¸ 3.3 îÅÅ
î«nÅ
Source: Shambaugh(2012).
% (EƲLÆ) 1ù î 41 / 60
3. î«uÐ(¸ 3.3 îÅÅ
üÚÅ"î5
Limited Lender of Last
Resort
No Fiscal Union
No Banking Union
Sovereign-Bank Doom
Loop
Labor Immobility
Exit Risk
% (EƲLÆ) 1ù î 42 / 60
4. ÏÊ¢î³5 4.1 o´ÏÊ¢º
What is Secular Stagnation?
Source: Personal website of L. Summers.
% (EƲLÆ) 1ù î 43 / 60
4. ÏÊ¢î³5 4.1 o´ÏÊ¢º
Signs of Secular Stagnation: Prolonged Low Growth
Source: Reflections on the new
‘Secular Stagnation hypothesis’.
% (EƲLÆ) 1ù î 44 / 60
4. ÏÊ¢î³5 4.1 o´ÏÊ¢º
Signs of Secular Stagnation: Low Long-term Interest Rate
Source: CEA(2015), “Nominal 10-Year Yields”, Figure 4 and 10.
% (EƲLÆ) 1ù î 45 / 60
4. ÏÊ¢î³5 4.1 o´ÏÊ¢º
One-Year and 10-Year U.S. Nominal Interest Rates
Source: CEA(2015), Figure 1, original data from Robert J. Shiller (Yale University) and FED.
% (EƲLÆ) 1ù î 46 / 60
4. ÏÊ¢î³5 4.1 o´ÏÊ¢º
Global Interest Rate in History
Source: Schmelzing(2018).
% (EƲLÆ) 1ù î 47 / 60
4. ÏÊ¢î³5 4.2 $|dzû½Ï
Low Interest Rate and Liquidity Trap
First, if real rates are low in normal times, adverse macroeconomic shocks are more
likely to require negative real rates to restore a full-employment investment-savings
balance. In today’s low-inflation environment, this tends to undermine the effectiveness
of monetary policy.
Source: Krugmann(1999) “Thinking about the liquidity trap”.
% (EƲLÆ) 1ù î 48 / 60
4. ÏÊ¢î³5 4.2 $|dzû½Ï
Low Interest Rate and Financial Instabiltiy
Second, low nominal and real interest rates undermine financial stability. According to
Summers(2014), there are three main channels:
increasing risk-taking as investors reach for yield;
promoting irresponsible lending;
making Ponzi financial structures more attractive.
According to Wikiwand, Hyman Minsky stated that in prosperous times, when corporate
cash flow rises beyond what is needed to pay off debt, a speculative euphoria develops,
and soon thereafter debts exceed what borrowers can pay off from their incoming
revenues, which in turn produces a financial crisis. This slow movement of the financial
system from stability to fragility, followed by crisis, is something for which Minsky is best
known, and the phrase “Minsky moment” refers to this aspect of Minsky’s academic
work.
% (EƲLÆ) 1ù î 49 / 60
4. ÏÊ¢î³5 4.2 $|dzû½Ï
Puzzle of the Falling of Long-run Interest Rate
Source: CES(2015), Figure 5 “10-Year Treasury Rates and Historical Economist Forecasts”.
% (EƲLÆ) 1ù î 50 / 60
4. ÏÊ¢î³5 4.2 $|dzû½Ï
Determination of Interest Rate
The real interest rate of home country:
r =1 + gcβ
− 1
The nominal interest rate for a closed economy:
i = r + πe
The nominal interest rate for an open economy:
i = i ∗ + Risk Premium
% (EƲLÆ) 1ù î 51 / 60
4. ÏÊ¢î³5 4.2 $|dzû½Ï
Derivation of Real Interest Rate from HOP
Given the discount factor β, the real interest rate r , and incomes of present and
future Q1,Q2 = (1 + gy )Q1, the Household Optimization Problem(HOP) is to
maximize the life-cycle utility (T = 1, 2):
MaxC1,C2
U = lnC1 + β lnC2
s.t. C1 + S = Q1
C2 = (1 + r)S + Q2
After solving the problem, we can get:
C2
C1= 1 + gc = β (1 + r)
r =1 + gcβ
− 1
% (EƲLÆ) 1ù î 52 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
ª³Ð"µ¥<NÄø
Source: Rachel and Smith(2016).
% (EƲLÆ) 1ù î 53 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
ª³Ð"µR&DÝ\M#£
Source: Rachel and Smith(2016).
% (EƲLÆ) 1ù î 54 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
AéÏÊ¢ü£
CEA(2015):
The goal of policy should not be to target a particular rate, but to support
long-run growth, maintain price stability, and strengthen the resilience of
financial markets.
Summers(2016):
The defining challenge is going to be absorbing all the savings in a
satisfactory way in the global economy for the next decade.
The first priority for policy... (should be) a concerted effort to identify and
find the means of financing the most productive investment opportunities
globally.
% (EƲLÆ) 1ù î 55 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
Teulings and Baldwin(2014)µ(5Uü
Improving the education system
Investing in the physical infrastructure.
Removing barriers for labour mobility between firms by trimming down
employment protection legislation.
Increasing incentives for low-skilled workers to participate on the labour
market.
Simplifying procedures for starting up businesses.
Applying anti-monopoly policies to reduce the profit margins in new IT
industries.
% (EƲLÆ) 1ù î 56 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
]Ôµ7KÅ
ã¡5 µBarabasi(2013)"
% (EƲLÆ) 1ù î 57 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
]Ôµ&^Å
Source: Algan, Y., S. Guriev, E.
Papaioannou, and E. Passari,
The European trust crisis and
the rise of populism, Brookings
Papers on Economic Activity,
2017(2), P309-400
Note: Data from European
Social Survey; Eurostat;
authors? calculations. The
sample includes 24 European
countries at the NUTS 2 level
of aggregation. The
unemployment rate is measured
as a percentage.
% (EƲLÆ) 1ù î 58 / 60
4. ÏÊ¢î³5 4.3 (5Uî³5
]ÔnµSÅ
ã¡5 : #u2015c925F©Ù/î³#c4 m¤0"
% (EƲLÆ) 1ù î 59 / 60
Reference
Council of Economic Advisers, 2015: Long-term interest rates: a survey, CEA Report,
Blog: The Decline in Long-Term Interest Rates.
Hobsbawm, Eric 1989: The Age Of Empire 1875-1914, Vintage
Holinski, N., C. Kool, and J. Muysken 2012: Persistent macroeconomic imbalances in the
euro area: causes and consequences, Federal Reserve Bank of St. Louis Review, 94(1),
P1-20.
Rachel, L. and T. Smith 2015: Secular drivers of the global real interest rate, BOE Staff
Working Paper, No.571, Blog: Towards a global narrative on long-term real interest rates
Schmelzing, P. 2018, Eight centuries of the risk-free rate: bond market reversals from the
Venetians to the ‘VaR shock’, Staff Working Paper No.686, Bank of England
Teulings, C. and R. Baldwin 2014: Secular stagnation: Facts, causes, and cures, Vox
eBook
[§2018µ5ûx.¤6§ô©²Ñ
% (EƲLÆ) 1ù î 60 / 60