Английский язык для экономистов - Малюга Е.Н.
ISBN 5-469-00341-8
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Even so, Mamoru Yamazaki, chief economist at Barclays Capital, said the policy moves would have almost no effect on the real economy or on prices, which have been (6) ... for seven years. He said the supply of more liquidity would, however, reassure the edgy financial markets, which have been battered by a sharply (7) ... stock market.
On Wednesday, the Nikkei average responded to the news by (8) ... 2.9 per cent to 7,831.4. Bank shares, which have been battered recently, rallied sharply. Of the big four, Mizuho rose 8.5 per cent, UFJ 11.6 per cent, Sumitomo Mitsui Financial Group 14 percent and Mitsubishi Tokyo Financial Group 14.1 percent. 180
Английский ЯЗЫК ДЛЯ экономистов
The BoJ also signalled its intention to help in the workout of bad loans, which have paralyzed the banks, by (9)... loans to the Industrial Revitali-zation Corporation (IRC) as collateral in its money market operations. The IRC, which begins business next month, is due to buy up to ? 10,000 bn of loans owed by weak, but salvageable, companies in an effort to get them off banks' books and clear them through the market.
The BoJ has long argued that its monetary policy cannot work properly unless commercial banks are restored to health, (10) ... them to fulfill their function of (11) ... base money into credit. Risk averse-banks have been (12)... their loan books in an attempt to bolster their precarious capital-adequacy ratios, (13)... bank (14) ... to fall for more than 60 straight months.
Mr. Yamazaki said that, until bad loans had worked through the system, BoJ policy was likely to prove impotent in terms of (15)... deflation. Only if the government asked the bank to directly fund more (16) ... could the price fall be halted he said. "Without such a big policy change, it's very difficult to alter the current price situation."
The gerund The present participle
G, Speak up
G.l. Answer the questions.
1. Who controls monetary policy in Russia?
2. What are particular features of monetary policy in Russia?
G.2. Analyze current economic conditions and formulate monetary policy for your country.
K Reading the English newspaper
H.l. Read the article and do the exercises.
Restoring the Fiscal Option
uThe Economist"
Governments seem unable to use budgets to temper recessions. That is a pity.
The traditional Keynesian remedy for recession — deficit spending, and plenty of it -- went out of fashion years ago. As it had come to be applied, it deserved to. Many governments were using budget deficits not merely to Unit 10. Monetary and Fiscal Policy
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cushion recessions but, fatally, to boost economic growth year in year out. That did not work, for the result was chronic inflation and higher taxes. But such past abuses should not blind governments to the role that budgetary policy can play in tempering the economic cycle. The fiscal option is often useful-and sometimes vital.
Yet politicians everywhere, it seems, are intent on denying themselves this option. Europe's governments were so worried that their new single currency would promote fiscal irresponsibility that they devised a "stability pact," which sternly discourages deficit spending. In the United States, nine months after the recession began, Republicans and Democrats are quarrelling over which ill-conceived measures to include in their stimulus package — as if to prove right of those who say that fiscal expansion always comes too late to be of any use. And in Japan, where fiscal stimulus has been tried and tried, the policy has apparently been a total failure. Governments of the world's big economies have either rejected the idea of active fiscal policy, or are proving that it would be better if they had.
Money Has Its Limits
This is a dangerous state of affairs. Monetary policy cannot carry the whole burden of stabilizing economies, especially when it has succeeded in driving inflation right down. Low inflation means low interest rates over the course of the cycle; and, since interest rates cannot fall below zero, they cannot then be cut by much should recession strike. The contribution that fiscal policy can make to cushioning the economy in a downturn may then become crucial.
However desirable this cushioning might be, does Japan not show that fiscal policy is impotent in the face of powerful deflationary forces? Actually, no. Japan used fiscal policy hesitantly and incompetently during the 1990s. When a big budget stimulus was briefly delivered, in 1995, the economy picked up; but fiscal policy then turned contractionary again. Budgets have not been used in a sustained and determined way to spur recovery. Now the government fears adding to its debt burden (the result of years of stagnation and contraction, note, not of years of seriously attempted reflation). The fear is misplaced. Fiscal reflation combined with monetary easing — "monetisation" of the deficit — would increase debt held by the central bank, not by the public. Even now, then, it is neither too late nor too costly for Japan to use fiscal policy.
