 Thank you, good afternoon everybody. It's a great pleasure to be here in Dublin. As you said I'm going to talk about the case of monetary finance... ...or money finance. I usually spend my time at the moment promoting my book, so I'll wait the book around... ...that'll encourage you subliminally, it is subliminally to read the book. It came out last October. It's called Between Mortaire and The Devil. ac rwy'n meddwl i'r Rhannig o'r llyfrnod y Chynig, a mae hi'n edrych o'r llyfrnod ddweud â'r llyfrnod. Mae hi'n meddwl i'r llyfrnod o'r llyfrnod o'r llyfrnod o'r llyfrnod i'r Chynig, mae hwn yn olygu'r llyfrnod gwybodaeth yn y Llyfrgell Gwymau Arna. Yn y llyfrnod o'r llyfrnod ychydig, rwy'n meddwl i'w gweld ychydig o'u gyn nhw, yw rwy'n meddwl y 2008 cyfrifiadau i'r llyfrnod, ac fydd rwy'n cael y bydd y rechydig y pethau rwyf yn maen nhon a'n cyfifarcast. Rwy, 8 yr gyrs yma, byddwn i weithio gysylltiad o griffau ei wneud yn gweithio'r gweld, i wneud rwy'n cyfbrydol i'u gynhyrchu, i bwysigio'r profi, i gwneud o dechrau i'r newidau yn Gwbwyll Gwlad Oesas, why its January this year update of its world economic outlook was entitled Subdued demand and diminished prospect. So the book is about what is going on and it ends with part five saying that what are we going to do to get out of the situation that we're in. And it is in that part five that I made the case that we must consider the o'r ffinanthau meddwl. Rwy'n nhw'n gwybod o'r ffinanthau, ac mae'n rhan i'r ddweud o'r tebwio bobl ar y cyfnod o'r ffinanthau. Mae'n ddweud o'r ffinanthau meddwl o'r ddechrau'r ffinanthau, fel y dyma oherwydd'r wyf, fel y dyma oherwydd'r ymddangos, fel ydy'r cyfnod, o'r ddweud o'r ddweud o'r ddweud o'r ffynanthau. Mae'n oed yn ynddo, ac mae'n oed yn wirio eich bod felly mae'n gwybod o'r bwysig o'i eu ffynan â'r cysylltu a'r ddweud o'r ffynan. Rwy'n meddwl, i ddim yn ddiddordeb yn y ffynan ymlaen, yn fy modd mewn cyfweld i'r FFIA, ar y Ddweud Ymddangol Rheswm Yn Ymdweud, ar y Llyfr Gwysig, oherwydd ymddangol yn y FFIA. A'r ysgrifenni ar hyn, rydyn ni'n gwybod yw'r gweithio'r i'r gweithio'r gweithio'r gweithio'r Llyfr Gwysig, ond gallwch chi'n gweithio heilio gyda'r unig o'r dweud yma. Ac os yw'n rhaid i'w ddechrau'n ffiyth am yr hyn newydd. Ond, dyma'r ddechrau, ddim oedd wedi bod yn cyfweld i'r bwysig o'r cyffredin, o bwysig o'r cyffredin i'r blaen. Dwi'n cael ei wneud i'r llwy ffair ac yw'r bwysig o'r cwysig o'r cyffredin i'r blaen, ynghylch ar y dyfodol yma hwn yn ymlaen nhw, ac mae'n gwybod ymddydd ychydig ymddydd ychydig ymdyn nhw, a ydych chi'n meddwl chi'n ei wneud y ffordd o ffynatru. Felly, rwyf i chi'n rai i'n mynd i'n arfer, rwyf i'n ffact yma, ychydig yma ychydig ychydig ymdyn nhw ym 2008 rhai-d currents. Mae'r companywyd o'r mae'r companywyd o'r Prifwyr yn dechrau'r Credit eisiau ddyniaeth canfodol a'r mwyaf atioedd a'r Rhys Gwll-Mwyaf a�on ni'n dim er mwyn nad yw'r companywyd phenomenonol, mae'r companywyd i'w cyfaint dda eich rhai-d considerably a'r companywyd am y cyfrifod nawr yw yn ddifol sydd yn dfosent yn wneud wedi'i gynnig o hysg-d awardedd arfer sy'r companywyd yn dweud i gyd-dodedd yn ymgyrch yn 50% i 170% yn 2007. Yn ymwysig, yw'r dros ymgyrch yn ymgyrch yn 50% i 2007, a beth yn ymgyrch yn ymgyrch yn 1090. Ymgol yma yma yr ymgyrch yn gredithol yma diddyn nhw wedi'i ddweud yr ysgolwyr mae cyfleu yr ysgolwch yn astudu'r gweithio'r cyflwyno, a sydd yn gweithio', a'u cyflwyno'r cyflwyno'n gweithio'r gweithio. Mae'r gweithio'r gweithio'n dyfu byddai real eisteddy. Felly mae'r hwn o'r fullfynu'n ddysgu'r Penedigol i'r Rhys Themol nad yw eich ddweudóol ddod oes sydd hefyd gan Scolwyr Alun, Oskar Yorda, Morys Shulwric. Mae'r ddim yn gweithio'r ddod o'r llippau gyrstech oedd yng Nghymru. Mae'r gwrth o gwneudio'r cyllid o'r sytó o'r system cyflogu i'r cyfrannu ihmairyn meddwl, o'r bwrdd y gwaith yn 17 mae'n i'n 17, a yna'n gofio'r sefflŷ defyn oherwydd mae sydd wedi'i awr. Felly, rwy'n meddwl y byddwch yn blod y swyddfa yn awr 20 yma. Gwyddiad a newyddau pan fyddraig gyfordd, sydd o'n pethau sydd gweithio'n bwrdd y byddwch yn gweithio. y dyfodol, mae ar 1870-1960 ydych yn ddechrau ar y dda yn llun yn ddiddordeb. Mae ddiddordeb 2007 wedi'u meddwl 60%. Mae'r flinigiaeth gwahanol y ddiddordeb yn ddiddordeb yn ddiddordeb yn ddiddordeb yn ddiddordeb, ond mae'r flinigiaeth yn ddiddordeb yn ddiddordeb yn ysgriffaith yn Arlen yn 2008. Mae'r flinigiaeth yn ddiddordeb yn ddiddordeb yn ddiddordeb yn amdano i ddiddordeb ar gael gweithfynol yma'r awgfyrdau yw'r gweithio. Yn y gallu pethau, mae'r gwaith ymlaen, er fydd yn gweithio'r awgfyrdau arall a gael gweld y awgfyrdau a'r awgfyrdau arall yw hefyd yn ymlaen i'r defnyddur. A'r awgfyrddau yn ymlaen i'r defnyddur yn ymlaen i'r defnyddur oedd y gweithio'r awgfyrdau yn y ffyrddau ymlaen i'r defnyddur, Rydym wedi gael cyfraeg adroddau'r cyflaenau ac mae'r prydynigfau cywir yn gweithio ddaliad, mae'r prydynigfau ar ddiw iawn yn ddiwrd ar y cyflaenau ac mae'r prydynigfau ar y cyflaenau oedd ein cyflaenau. Mae'r ddigwydd i'r ddaliad ei fwyaf o'r arfod. Mae'r cyflaenau wedi gweithio arweinydd â ddaliad i wychion bod yna yn ystod yn rhoi gwybod cyflaenau yma yn llwyterwyd gan 2008, mae'n yn cyflaenau Maidanimu Minski, wedi'i fod yn ei amdano'r cynnig wedi'i gyn highness i'r darmarfod o ddau'r cyf transit i Fnosa Cymru, wedi'i fod yn iawn hefyd yn meddwl i'r cyfrifiadau ei ddeud. Rwy'n gweithio'n bwysig wahanol surfol yw eu cyfrifiadau a'r trafodaeth sefydlog yn eu rhan o'r tyniad, sy'n ymddangos a'r eich credu o'r cyfrifiadau a'r ddaeth yn y rhan o gyrry. Yn y tro cyfrifiadau ap chi'n wych yn armeinydd yma, a'r gyrfaith yma yn hawdd iawn. The situation is where the debt doesn't go away, it simply moves around the economy, and where it appears that all our classic levers to stimulate aggregate nominal demand are blocked, imperfect, or have adverse side effects. What do I mean by the debt doesn't go away, simply moves around? Let me illustrate what I mean by reference to Japan. Japan in the 1980 has one of the biggest credit in real estate we've ever seen. Bank lending against real estate goes up defined now to your half times in five or six years. Real estate prices in central Togo, central Osaka go up by four times in five or six years. Then there's a crack of confidence on the real estate prices come down by 70% or so. What you then have is a whole load of companies Ac mae'n amliwysoedd yn nifer y gyd-enill, ond mae'n meddyliadau, ac yn meddyliadau sy'n meddyl yn meddyl yn ymgyrchu'r hyn sy'n meddyliadau yn Casasio, rwy'r edrych yn achievedur P3. Rwy'n meddyliadau i fewn ychydig yn gweithio beth, ac mae'n meddyl yn meddyl yn meddyl i recovery i ddigion ond, oherwydd, rydyn na yn ymddi'r gwaith cyflawni'r ysgoleth i'r ysgoleth gyda Richard Coo o'r reis-seshon yna, a roedd y cwrnodau yn y dyfodol yn meddwl, mae'r rhaglen yn bwysig o'r rhaglen yw'r cyfrifiadau yn y cyfrifiadau yn y cyfrifiadau yw'r cyfrifiadau yn y cyfrifiadau, rydyn ni'n dechrau i'r llyfrig. ac wrth y clyw roierydiadu'r ffordd o'r afraith fydd ystod ddaeth, ymweld hefyd o'r ffordd ar gyfer hetsef o'r croediau ymdindigol gwahanol ac mae'r rôl mae'n rôl nag i'r byddoedd, byddai ysgrifennu iddynt o ymgyrch ac o rôl mewn gweld, byddai ysgrifennu o gydig o 9 o 9 o 10% o GDP. Ac yna efallai efallai bod yn gŷanodau ar y ffordd o atgwyd i'r afraith, i ni'n hoffi iwi gyd o bwyr i niwn brodd er mwyn ochr iawn, ond mae'r cyflodwch wedi cyflodwch yma, ac wedyn ydych chi'n gynnwys 25 yng nghymru Adonysau. Yn yno mae o'r rheswm, yma mae'r cyflodwch yn vaen i'r hoffi a chyflion ac yn fynd i'r econom partners ac y gallwch y gallwch yn fy nhw'n gwerthu chi y ddechrau yn y ddechrau'n gwybod, oherwydd mae'r gweithio y gweithiau y mae o alternativell ac yna hwn yn gwrthwydd. Fy ydych chi'n ymgylch yn y cyfrifysgfa i'r gwrslydd ymenig, ac nes ydi'r dros 2019 y bydd hwn o'r cyfrifysgaf sinol, ac yn ydych chi'n gyfrifysgfa'r gwrdd pleidig o'r gwrdd yn eriyd. Mae gwrdd o'r gwrdd yn ymgylch yn ymgylch, a fydd yn gwirio mewn ddechrau. Gwrdd, y j然后m yn ran cyfrifysgfa o ran ychydig o'r cyfrifysgfa sy'n duethaf i gyfrifysgfa'r gwrdd hwn. Mae'n mynd i'r cyfrifysgfa wedi amgueddion Not just two decades of very slow growth and slow deflation, but a real 1930 style Great Depression. So they were useful. But they have an inevitable consequence that public debt as a percent of GDP goes up. And if we switch from this chart which is flows to the next chart which is stocked, the stock of debt as a percent of GDP, you can see that the story of Japan for the last 25 years is that there has been a long, slow, steady de-leveraging of the private sector offset by a more-than offsetting increase in the debt of the public sector, which has gone from about 50% of GDP to about 250% of GDP and is still rising. The debt hasn't gone away, it has simply moved around the economy. ac mae'r pattern yn ystod o'r cyfnodau sydd wedi'i gweithio'r cyfnodau sydd 2008. Felly, mae'r cyfnodau sydd ymlaen i'r cyfnodau, y gallwn y dyfodol yn ystod o'r 50-year run-up o'r 50-year o'r 50-year o'r 170-year o'r 50-year o'r 100-year o'r 170-year o'r 1r. O wel y cyfnodau sydd… … amweithio yn deithas Sirgaryangol dros gyfer Hem hednig, yn r Bandfodol Cyfnodau a Shwerlwn Iredaeth, yn yr oed pan fawr i ni'r ch KEI- tonnes i diwrnodau οbat cynhyn equipped, yma os y ddechreuadau Youtube ac ond ac i ddim ekipu i gymfloweru i sabi cyfnodau amrawwn. Is ble hima caiss i holl y rool y decidel chromא gan thanysgafyddio. Ych yna'r flwyddyn ar draws. Yn ymateb gyda eu bodai gweithio siogel yng Nghymru Cymru, bydd y cyfnodol ac yn gwneud y bryd yma yn eich cyfrifnwyr ym Mhwyl Chart Ysgol. Yn ymlaen, mae hwnna'n ddefnyddio ar gyfer y gyrthoedd ac yn gbyn. Cymru digon hwnna'n ddefnyddio am ymlaen ni yn fwy o'r bwrdd yn oed. Yna'n gweithio ddusun dd derived yn cysylltu a'r ddigon o'r ddometai what deleveraging, because at the level of all debt together there has be no deleveraging. What kindly has also been though is a very significant shift. At least may be there has been a slight slowdown. There has been an additional take off of debt in emerging markets. The most dramatic of those is China where Chinese debt during GDP primarily corporate has gone up from 140% of GDP to 240% of GDP. And, again, that increase in Chinese debt isn't just coincidental. It isn't just that the advanced economies had a financial crisis and quite by chance, at the same time, the Chinese economy decided to increase its leverage. The one caused the other. The Chinese authorities in early 2009 were terrified that deleveraging by U.S. households in particular was going to drive a falling demand for Chinese exports a dyna'r unig o'r rhan o'r cwmwylo'i dynol yn Chynyddu. O'r rhan o'r ysgol, rhaid o'r ddihaf yn ddigon o'r ffath o'r unig o'r ffath o'r rhan o'r rhan o'r gweithio'r ffath o'r hollu. Ond mae'n fwy o'r gweithio'n gweithio, mae'n dweud o'r diwedd y ffath o'r ddechrau, mae'r ddechrau nid oed o'r gweithio eich cyfnod o'r economiai. A os ydych chi'n meddwl, mewn gwirdd o ysgol yma, yw hwn o'r cyflaenol cyflaenol ymddangos. Y cyflaenol cyflaenol yw fynd i'ch bod i'ch i'ch gwaith jopannu yn ymdweud y ffondiol ynchos ffondiol ffondol, mae'r ffondiol yn y ffondiol ffondiol sy'n ei ddweud y llun yw'r ffondiol. Yn y gweithio ymateb ar y bydd y CRISYs ar 2008, rydych yn ymddangos bod yna yn gweithio. Felly, yn ym April 2009, yn Llywbeth, y G20 yw'r gwneud o'r wyg ydych chi'n gofyn yn y ffobl y gweld yma yma yw'r economiynau i'w gwneud y ffinshwymiol yn ddiolchio'r cyfnodau drwy'r cyfnodau yw'r cyfnodau yma. Dyma hwn i ddweud am y ffordd yma yw'r ymellaf oherwydd dyma'r eu cyfnodau yn ddigwysig o'r economiynau. Ond ydych yn fawr, mae'n ymlaen i ddweud o'r wneud o'r cyfnodau yn ddweud o'r cyfnodau. rydych chi'n ei wneud o'r ysgrifennu cyfnodd yng nghymru yn y ffordd yng Nghymru yw'r lŷ, clwyddoedd yn agrwyngau am y llwyll yng Nghymru. A dyma yw'r ffordd yng Nghymru wedi'i gael ei gwneud i chi— dyma'r hyn o'r hyn o'r ffysgol ardennig, dyma'r hyn o'r ffysgol argym ni, mae'n rhaid i'r llyfrgellfa ar y llyfrgellfa ar y cynnwys. Felly, receiving the public sector continues to blow up its debt under control and pay that as the private sector is still also unrhyw dillegynau, so you can drive the economy into a deeper recession. Unless, that is, you believe that you can fix it by ultra-loose monetary policy. The conventional wisdom of the last five years has been that governments can take tighter fiscal stance, but central banks can fully offset that with ultra-loose monetary policy, o'r ddigustfawr drwy'i mai ddwydd, oedd yn negatifu, ac mae'n gofynnwch gwawndol iawn i'ch gydag y croisiad a gweithio mewn fawr i'r gweithio. Mae'r drwy'u gan'r iawnon eich bod yn nhw yn gwneud, ac mae'n ddweud y gwirionedd Gwilor Os edrych o'i bydd gilydd i gyf EQ a'r ddweud o'r ddigustfawr drwy'i gweithwyr yn dweud o'r Dau UK. Ond mae'n ddweud yn nhw yn nhw yn gwneud, Mae'r mecaniad hynny yn ychydig i'r eu gweithio eriaeth o'r bobl fod yr irthegi'r ardeil. Gwell, efally gweithio ym semnach yma yn sgwrs, ym blaeniechau gweld yn eich heb gweithio, i wneud i'r thymian polon i'r oedwch yn ei ddweud. Wrth gyda grannig yr scrill Cwwy, ac o'r Cwwy esgwrs, mae'r oedwch i'r Cyngor Cymru hynny tynu i'r Undi-Ylder i gael soedd o bydd o unedol gwahbwysig, yn gallu dyfodol o bobl DIDD mewn aod a'r swyddfa gael yn perthynas y nifer gwahanol a'i fydd yn ei fyddus' i'w wertau. Mae ymddwys i'n ddod i ni'n wneud dweud. Rydyn ni'n i'n ddod i gael y gallu awm o'r ffantffordi. Felly, allwn eich gwahanol yn anod y bydd yn credu i gael unrhywbh. Rydyn ni'n credu i gael achor yw y pros Faster. i'w oeddi'r lle. Mae'r bobl bun, mae'r bobl bun yn bach. Mae'r bobl bun yn bach. Mae'r bobl bun yn bach. Mae'n fyddiol ychydig i'r economi ac mae'r rhai o'r effekt i gweithio'r gilydd anhygoel ac mae'r bwysig ar y cwrdd i'w wneud am y cwrdd mwyaf oherwydd mae hi'w creu ffyrdd i'ch gwedd i'w ffyrdd oherwydd mae'n gweithio'r ffyrdd o'r sydd yn bach. Mae'n dweud oherwydd, yw dweud o'r cymdeithasol o gyllideb yn llyfr o'r cyflawn i'r ddweud. Yn amlwg, ychyn nhw'n gweithio'r ddweud o Kerudasarn i Japan o'r Mary o Draghi, mae'n gwybod yn ffocwsio'n gweithio'r polisi lwyddo'r ddweud o'r ddweud o'r ddweud o'r ysgol o'r Yn o'r Eur. Ond yna, mae'n gwneud o'r ddweud o'r ddweud o'r ddweud o'r ddweud o'r sefydliadau, mae hynny'n oed yn ysgrifennu. NYIt is a tool which can be used to help one country which has a debt overhang problem escape from it, but the world cannot escape a global debt overhang by devaluing its currency against those of other planets. And if the Japanese government manages to bring down the yen, the Japanese Central Bank manages to bring down the yen, that is then immediately a problem for Korea, for China, for the eurozone, ac ydy godwch i'n mynd i'r ddoedd y euro o'ch credu'r enw'r problem i'r U.S. Rydyn ni'n meddylion i'r eithaf sy'n hyn am y cwylgu, am yw'r hynny ychydig newidol. Rydych chi'n meddwl berthynas i'r meddwl siaradau gwyrdd a gwahod yn ffrydd ydych i'r ysguedd bydd y byddai bulladau i gweithio, maen nhw'n meddadu y bydd hopeth yn y brwynt. All yr Lyfriau yn ychydig o ddech chi'n gwneud rhai ymgyrchol a chw sellataeth wedi'u gwneud ar gael, .. FEL that turns out in economic history to be difficult to have large scale debt write off. Large enough to make a significant difference to the leverage of the whole economy.. ..without that itself being disruptive and depressive effect on the economy. Or we just stay forever with large debts made affordable with ultra or low interest rates. Those are low interest rates for people creating incentives.. felly weithio ydy i'w ddweud y dechrau. Rydyn ni wedi bod yn ymdeg ar gyfer phobl mor eich ffordd o'r amunisi. Mae'r ffrwng ymdeg yn ymdeg yn ymdeg yn ymdeg â'r awr. Mae'r bankau cyfnodd yn ysgrifennu lleddau i'ch gael, rydyn ni'n credu bod ni'n ddweud a chyfnodd iawn. Mae'r gwahau, rydych chi'n gweld ymdeg, nad yna'n siaradau yn ymddeg, i ddod o'r hyn ar hyn o'r cymdeilydd yn ymddangos. Felly, o'r cwestiynau bod willig ymddangos yn part 5 o'r llygau, is that if our problem is inadequate nominal demand, if that is the problem it might not be the whole problem but if the problem is inadequate nominal demand, then central banks and governments together never, ever run out of ammunition. On oedd y gallu gweld o'r problemau sy'n oed yn cael eu defnyddio yn y economiei, ond dyfodd yn gael gan gweithio, byddwch chi'n ddweud bod yn gweithio'r ddau sydd gennych gweithio a'r cyfnwysig yn ddweud. Ond mae'r ddweud sy'n gweithio'r ddweud, mae'n gweld yn ei ffordd i'r rhan o'r cyfnod. Yn oed yn ddweud, rwy'n gweithio'r ddweud, rwy'n gweithio'r ddweud cyfnod gweithio'r rhan o'r ddweud, Ionwch, ond dyna'n gweithio'n gweld i'n meddwl i'r cym�in. Ond ydych chi'n ddweud, ddych chi'n meddwl i'r rhaid i'r rhaid i'r cymrwyr, dwi'n gallu ei bod yn ffrindio'r cymdeithl, dwi'n meddwl i'n meddwl i'r rhaid i'r ffinanthu'r munitari, ac rhaid i'n ei gweithio ym Mhwylwyr, ysgrifennu swyffoli yng Nghymru, Henri Simon, un o'r gweithio'r gofynol sydd yng Nghyrchu Cyngor, yn ein wyliau dyna y gwirtu mewn bethysgol i ni'r ffasedamol ym 1936, ond ychydig dychynig o'i mynd i ei MURF yn amlwg i'r gweithio i ni'n gwybod i dda i ddweud i gweithio i i llwyno, mae'i ddweud i'w ddweud i gweithio i gweithio i ddweud i gweithio. Mae'r�lygededau ar gyfer y cyflen o'r rai cyflen o'r rai ddweud, a'i ddweud o'r argynnu'r iawn ffysgol. ..a miliwn oeddaeth gyda'r ddau ddau cyfnodol.. ..y'r ddau yn ymddangos yn ymddangos o'r ddau cyfnodol.. ..y ddweud y ffysgol yn y policy. Yn 1948, Milton Friedman ddim yn y cyfnodol.. ..y cyfnodol ymlaenau hefyd yn ymddangos. Mae'r ddau cyfnodol yn y system.. ..yna'r ddau cyfnodol yn ymdill yn ei ddau'r ddau.. ..y gweithio'r ddau'r ddau'r ddau.. ..y gweithio'r ddau'r ddau. Mae'r ddiwrnod yma yw'r dysgu wedi'i gweithio'r barhau o'r dweud o'r defnyddio'r ddefnyddio. Dyma'r ddau'r ddiwrnod yma yn ymgyrchu'r ddiwyddoedd yn ymgyrch yn gweithio'r ddiwyddoedd yn y ddysgu. Rwy'n meddwl, mae'r ddiwrnod yma'r ddiwyddoedd yma yw'r ddiwyddoedd yn gweithio'r ddiwyddoedd. Felly mae'n Jeremy Corbyn, mae'n Milton Friedman. Mae'n meddwl i'i gweithio'r ddiwyddoedd Ben Bernanke yn 2003, rhan o'r gweithio ar gyfer y txud o ddegyfrwyd rhan o'i cyfnodol yma, yn hyn sy'n dod i'r gweithio cael hwnnw i golffyr ac ystafell yn gallu atbygomau o'r cyfrifysgau, o'r gweithio gyda bytwn amlun gan PGOG. A wnaeth y txud yn bwysig yn bawb o ran o'r gweithio chi'w ffarnad. understands fel hynny mwy o bwysig yr afeid efallai diwethaf. Ychydig i chi'n gwybod. Ion i ei fyrdd oherwydd hynny, Unws unwyr i gwleidio ein gwin fel thirty-fwcaethau. O'n gweithio a gwleidio gweithio gwleidio fel three-fwcaethau o ffrindio'r gwleidio. Rwyf cael ei angen i gyda'r ei gwedd yn rhywbeth eich parwch, uhlion ddeigwad y chr�siau gyda iaith o ddefnyddio gyda'r cerddiff y bydd y Gweithreinikau. Gweithreinikau hynny o'r byd o erdwyddiol i gafodig, whysbeth y bydd trwy'r byd o'r cyfeisiant, ac rhaid i'r cwmhreit o gyfnodd iawn mlygol yn sylwgr yn ffachod a wedi'u gyfnodd iawn. Offen y gyfreith y llunodd iawn, y dyfodol iawn, ac trwy'r dwblwct Fear, un o'r llunodd iawn gwirio'r llunodd iawn, ac nhw alle brydd o'r gyfer hwn y tŵr bwn yn ôl. Mae'r llunodd iawn yn y cyfnodd iawn, Mae'n yw ddweud o'n gweithio ffalaeth bod yn galluまでi, mae'r ddechrau ffalaeth o'r certhu llifor gyda'r debyg o'r philig o myfrindwyr ardal erbyn pethau gyda'r brwysig. Ond mae'n dweud o'r ddefnyddio meddwl sy'n yn yn frof. Yn cais gwneud hynny, mae hynny'n allwch ar gincnig iawn, a wnaeth y cymdeithasol fod cyhoeddffyr o'r cywhedennau hynny'n amser iawn y ddechrau. Gweithio haf ymwaleu, mae hwnnw yn chysgol i gyrhaf y cwmdeithio. can do it as a tax cut. That tax cut could be one year or it could be over several years. You could use it in order not to increase the taxes you were otherwise going to increase or you could use it to fund a public expenditure programme. There are an infinite variety of the ways that you do it but all of them amount to running a fiscal deficit which is not financed with the issue of interest bearing debt which you have to pay back but which is issued with a is met with irredeemable fiat money. Now in my paper to the IMF I argued that if this is how we define monetary finance then it should be part of our available tools because four propositions exist. Four propositions are valid. The first is that there exist circumstances in which is appropriate to stimulate aggregate normal demand and what I put here is the strength of the argument for each of these propositions. As you can see this is the one that I have actually put the question against because I think it is the case but it is dependent on particular circumstances. Sometimes it is appropriate to stimulate normal demand and I think those circumstances exist today but it is not always the case. But these three propositions are I believe theoretically true and absolutely true. Monetary finance will always stimulate aggregate nominal demand. In some circumstances it will do so more certainly and with less side effects than available alternative policies and crucially the degree of stimulus can be controlled. We are not in a situation where you start doing this and suddenly you have done too much. You can decide to do a little or a lot. Let me just run through those four propositions. The orthodoxy today is that proposition number one definitely exists because after all that is why central banks are running zero and negative interest rates policies. If you don't believe that number one exists, if you don't believe that number one is true then the Federal Reserve shouldn't have a fed funds rate of a quarter per cent and the ECB shouldn't have a repo rate of minus. These are attempts to stimulate aggregate nominal demand. That is however being challenged by people in Germany. I think increasingly as I listen to German economists they are not arguing against ECB policy as being the wrong policy to achieve a higher rate of inflation or a higher rate of aggregate nominal demand growth. They are challenging whether that is a good idea at all. They are increasingly saying what's wrong with mild deflation. What's wrong with an economy in which nominal demand doesn't grow. Now I have engaged with them. I've been over to Frankfurt and Munich arguing about this. I think they're wrong but I actually think it's the as I say I think it's the one of these which is most debatable whereas I think the following three are not debatable at all but why do I think it's wrong. Well modern economies work best I believe with rich advanced economies with nominal GDP growth rates of something like four or five per cent per annum enabling you to combine two two and a half percent real growth in line with productivity growth at the frontier of technology and inflation of about two per cent. I am part of the orthodoxy that believes that two per cent inflation is better than zero. If you put those two together you want to have nominal demand growth running at four or five per cent and since the crisis it hasn't been doing anything like that. In the US nominal GDP has been growing at 2.9 per cent per annum in the UK at 2.4 per cent per annum in the EU at 1 per cent per annum and in Japan at minus 0.1 per cent per annum. I think I'm not going to argue it in detail here but I argue in the book and in the paper that part of the problem of what's wrong with the Japanese economy actually quite a lot in Japan's case is inadequate nominal demand growth and that quite a lot of the problem in Europe is inadequate nominal demand growth. Now that doesn't exclude the possibility that there might be lots of other things wrong as well. There's no either or between supply side measures and structural reform and demand side measures but part of the problem that we have in the global economy is a chronic deficiency of aggregate nominal demand and that is showing up in the complete failure over the last four years of the Eurozone to meet its targets. The ECB has a target of keeping inflation close to but a bit below 2 per cent and it's nowhere near. It has been falling for the last four years and it is now negative and inflationary expectations are coming down. So I believe there is a clear case for stimulating aggregate nominal demand. My second proposition, proposition two is that if you want to stimulate aggregate nominal demand money finance will always stimulate it. What is money finance? It is a fiscal stimulus. Let's be clear it is a category of fiscal stimulus. You cut taxes or you give somebody a one-off tax cuts or you increase public expenditure but it is not financed by debt and therefore there is no possibility of what is called a Ricardian equivalent effect in which the people who receive the tax cut say I know I've been given this tax cut but I know I'm going to pay back the debt in future so I'm not going to spend it. That is the great debate in economics as to whether debt finance deficits do or do not stimulate the economy is whether there is or is not Ricardian equivalence. But what we know for certain is that when you do money finance there is no Ricardian equivalence it will definitely have a stimulative effect. In technical terms and I explore this in my IMF paper you achieve an increase in household nominal net worth when you do a money finance tax cuts and you have an asymmetric effect on the private and public balance sheets. Household gross nominal wealth increases but there is no increase in the net present value of public sector liabilities or to think of it simply in Milton Friedman's helicopter money terms from his 1960 article you fill a helicopter up with money you scatter it down people pick it up they feel themselves richer in nominal terms and they will spend it and the process of spending it will either produce an increase in real output if there is an output gap and a possibility of real output growth or it will produce an increase in inflation but in some way it will stimulate nominal demand and I think it's as simple as that and that then has a very clear consequence which is if that is correct and I am convinced that those propositions are correct inadequate demand deflation or what the IMF call loflation are policy choices they are never unavoidable effects. Faced with inadequate nominal demand governments and central banks never run out of ammunition so the statement that we are out of if you think the problem is inadequate nominal demand the statement we are out of ammunition is wrong just wrong it is not technically supportable in any way. Monetary finance will always stimulate monetary demand and in some cases it will do it when the other things don't work. There are people out there in the world who are saying and you know I talked to them people like Larry Summers or Paul Crudman who get pretty close to saying why complicated and why upset people by rating the taboo you know why encourage the Federal Reserve to do something which will just bring the tea party down on his head by talking about money finance deficits why don't we just do debt finance deficits and you see articles from Larry Summers and Paul Crudman arguing for much bigger fiscal deficits in the US in the Eurozone financed in the classic fashion by debt finance and if you believe that there is no Ricardian equivalent effect right if you believe that people do not anticipate the future debt servicing burden from higher debt then they will be as stimulative of money finance deficits but you can still say money finance deficits in their stimulative effect are greater than or equal than debt finance deficits they're equal if there is no Ricardian equivalents they're greater if there is Ricardian equivalents but they are definitely greater than or equal in their effect. How do they compare with forward guidance to influence expectations? I'm increasingly convinced that all this forward guidance stuff of central banks has become a sort of absurd cultish activity of very little meaning. I mean today in Washington Janet Yellen will give a press conference and people will try and work how whether the FOMC statement has moved the comma forward or back what is it said about whether they are you know the balance of risk in some incredibly minor fashion it's like sort of 1950s criminology where we used to try and work out from where people were placed on the podium as to what was going to happen to Soviet policy. I simply don't think it has a real economy effect. I think it's not effective in the absence of real actions. It's more certain than quantity of the evening I talked earlier about how quantitative easing works are uncertain and indirect transmission challenge and as for sustained negative interest rates I think we are increasingly learning that when you go through zero some very odd things happen to the economy because of nominal contractual liabilities debt contracts that don't automatically adjust but even if negative interest rates do work and negative interest rates for instances what Ken Rogoff argues for I think they can only work by re-stimulating the very growth of private credit that got us into this mess in the first place. If our fundamental problem is that we have too much debt in the world it's pretty odd to suggest that the only way out is something whose transmission mechanism is through encouraging people to take on more private debt. So I believe that monetary finance can be in many circumstances superior or more certain on its impact on nominal demand or have less adverse side effects. The final point is the degree of stimulus can be managed and this is the most technically complicated bit of monetary finance. In a lot of the literature in for instance Milton Friedman's 1948 article actually he makes life easy for himself by imagining in a world which doesn't have fractional reserve banks and in which therefore the money supply is equal to the monetary base where you literally hand out money and that money is either held as notes and coins or it is held at 100% reserve banks. If that was the world in which we operated I think it would be pretty easy to understand that if you did in the US economy a one-off drop of 10 million new money supply you would have an impact so small you would hardly see it. 10 billion you'd have a principal impact and 10 trillion you probably would produce extreme excessive inflation. The amount of the stimulus would depend on the amount of the money that you put into the economy. The only reason why that might not be the case is if when you said you were putting in 10 billion everybody thought that that was a signal that you're going to do it again and again and again and increase the dose because if that occurred you might have an uncontrollable mechanism working through expectations and working through the exchange rate. So the management of expectations is key but as long as you can make credible commitments about how much you're doing and how much you will do in future then there is fundamentally the impact is proportional to how much you do and it's a pretty fundamental common sense proposition. It does get much more complicated when we have fractional reserve banks because when you have fractional reserve banks the money that the central bank creates is not ultimately money supply in the sense of notes and coins it is monetary base in the form of commercial bank reserves at the central bank and this is the most difficult issue in calibrating the effect of monetary finance that you do a monetary finance operation you give the commercial banks reserves the first round effect is exactly as if you were in a no fractional reserve bank world you get a moderate stimulus to start with but then somewhere down the line the commercial banks use their reserves to lend out more money and they create more private money on top of the public money that you have created. That is the essential but it is the only difficult issue with the calibration of monetary demand and there are solutions to it. The solutions are that you impose in future quantitative reserve requirements on the banks essentially to stop them taking the first order effect of a monetary finance operation and multiplying it by the creation of private money and the other thing you have to do is having imposed those requirements on the banks you have to make them non-interest bearing because if they aren't non-interest bearing you haven't funded the public deficit with non-interest bearing money and again my article by paper for the IMF explains that. My conclusion from all of that and this is what I'm going to assert and you're going to have to somewhat accept it because I've run through the technical details quite quickly but you can read it in more detail either in the book or the article. I believe that there are no valid technical reasons at all for excluding money finance from our policy toolkit. It will always stimulate nominal demand and it is technically possible to manage the degree of stimulus. But I accept that there are great political risks that if we first break the taboo then monetary finance might be used to access. So I think there is a respectable argument on monetary finance that says even though monetary finance is technically feasible and in some circumstances the best policy we should exclude its use entirely in order to avoid political risks. If somebody faced with my argument says that's my position and that is the position of for instance Otmar Ising with whom I have debated this then I respect that point of view because it's at least logical. I don't agree with it because I think we can constrain the political risks and I don't agree with it because I think we might be in such a deep deflationary trap that we need this tool. But I think this is a respectable argument whereas I think all the arguments that it's somehow technically impossible or bound to produce hyperinflation I think are put forward by people who haven't done the homework to think it through. I think this is completely technically possible. I think there are major political risks and that of course is what history tells us. When I give this lecture in Germany if I don't mention Weimar someone mentions Weimar. Here on the right hand side you have Weimar. This is a sort of kid sometime in 1923 having fun making a sort of construction out of blocks of a rice marks. I think each of these has sort of 500 notes. They're probably a billion each and when she stopped enjoying building this she's going to put it all in a wheelbarrow and by a loaf of bread. So clearly you can have an unsuccessful and excessive use of monetary finance. But the check on the left is Takahashi. Takahashi was the finance minister of Japan in 1931 through to 1935. He very successfully used monetary finance to pull Japan out of a recession more rapidly than almost any of the major economies. He was a very responsible person who in 1935 decided to end that and said we're now back to normal rates of inflation. We don't need to do it anymore and we're going to stop it and return to balance budgets, etc. and non monetary finance. Unfortunately for him at that stage the military assassinated him because they wanted to go on printing money to fund their militarism. He wasn't a militarist but we can't blame the technical policy for the unfortunate end to which Takahashi came. His policy in itself was responsible and actually the essential point was summed up by Adam Smith in the welter nations. In the 18th century the Pennsylvania colony, one of the English colonies in East Coast America very successfully used monetary finance to keep the economy going. But as Adam Smith pointed out, the success of money creation in Pennsylvania was dependent on the moderation with which it was used. Whereas exactly the same experience was deployed by several other American colonies, but for want of this moderation produced much more disorder than convenience. It produced excessive inflation. This is a tool where the result depends on how much you do and in technical terms you can decide how much you do so the crucial issue is the political risk. The issue therefore is can the political risk of the overuse of monetary finance be managed? I believe it can. I believe it would be possible for us to establish a regime in which we hand to independent central banks pursuing the inflation target. We give them the authority to decide how much monetary finance will be allowed in a particular year in pursuit of the inflation target. Now I don't think central banks can decide precisely how to spend money because that has distributional consequences which are properly the domain of elected governments. But you can have a mechanism where you divide the responsibility between the independent central bank with an inflation targeting mandate has the absolute authority to say there will be 30 billion and no more and we believe that in this environment 30 billion of money finance is a better way to get up to the inflation target than going more and more negative interest rates. I believe that such regimes could be put in place and indeed this is exactly the sort of regime which Ben Bernanke argued for two weeks ago in a Brookings Institute blog where he said pretty much exactly the same thing. So I think the UK Monetary Policy Committee between 2009 to 12 could have been given the authority to say we'd rather not do 375 billion of supposedly reversible QE instead we think there should be a somewhat smaller amount of additional fiscal stimulus permanently financed with central bank money. Now that's my technical case and my case of why I think we can politically manage this. Let me end with two points about real world implications in the two major economies where nominal demand has been most deficient and therefore where the case for a nominal demand stimulus is greatest in Japan and the Eurozone. And what I want to say on Japan is we are going to see monetary finance whether you like it or not and in some sense we are already because I want to assert that there are two realities about Japan that have to be accepted. One is Japanese government debt is never going to be repaid in the normal sense of the word repay. It's mathematically impossible it's not going to occur. And secondly that the Japanese government bonds which have been bought by the BOJ are never going to be sold back to the market. Let me support the first of those assertions by just showing you some interesting scenarios from the IMF fiscal monitor which comes out each year. In November 2010 the IMF fiscal monitor said we're going to run a scenario which shows what the Japanese government will have to do to get back to debt sustainability. And the defined debt sustainability has 200% gross debt to GDP by 2030, 80% net debt after the debt which is owned by the Social Security Fund. Let's say what's going to happen is that at present they're running a 6.5% fiscal deficit. They're going to turn that into a 6.4% surplus by 2020 and they're going to maintain that surplus at that level throughout the 2020s. You go through to October 2014 and they said well we don't seem to be making much progress in turning this fiscal deficit into a fiscal surplus but what we're now going to do is between 2014 and 2020 we're going to go from a fiscal deficit of 6% to a fiscal surplus of 5.6% and we're going to maintain that throughout the 2020s and we're going to pay down the debt. Well my last year 2015 reality have set in and there was no longer any scenario which suggested debt sustainability because it got just silly to keep asserting. So rather than asserting what had to happen for debt sustainability they said what was going to occur which is that even by 2020 the Japanese government is going to continue to run deficits and is going to continue to pile up debt. That debt is being bought by the Bank of Japan. The Bank of Japan is buying Japanese government debt at the pace of 80 trillion yen of debt per month. The Japanese government is issuing debt at the pace of about 40 to 45 trillion yen per month. The share of Japanese government debt which is owned by the Bank of Japan is therefore relentlessly increasing and there will be a date somewhere in the early 2020s where there is no Japanese government debt which is not owned either by the Japanese Social Security Fund which is an arm of the government or by the Bank of Japan. There will be no debt owed to the external private sector. Somewhere along that path market analysts are increasingly going to quote a figure which is Japanese net net debt, a Japanese net debt after everything which is owned by things that the Bank of Japan owns because normally with a company when you work out your consolidated balance sheet you don't include the debt to you or from you of things that you own. Japanese consolidated government public sector debt is in relentless decline. This is in a sense monetisation without admitting as much but because it's not admitted the Japanese government is still telling the Japanese people day after day that they face this huge future debt burden and that they're going to have to pay it back and there will have to be a sales tax increase next year and tight control of a public expenditure. It's simply not going to happen, sometime this year reality is going to set in, the sales tax increase is probably going to be delayed and should be and Japan may also do what is called a voucher distribution which is the nearest thing to helicopter money that there is. And don't worry about it, it's okay. The value of it is it's going to change the nature of the debate as it applies to a far more important and more worrying situation which is the eurozone. I'm actually not all that worried about Japan. Japan has a sort of giant accounting entry problem as to whether this debt is real debt or not. But Japan is one of the richest countries on earth. It is an ethnically and irreligiously culturally homogeneous society with very little immigration flows. It has low unemployment. It's a rich country slowly getting richer. It faces some challenges but those challenges do not include challenges to social and political cohesion. The eurozone I think is in a far more troubling state. I think this eurozone and Europe in general, if we have there a decade or another decade of economic performance as poor as it was in Japan in the 1990s and 2000s, the social and political consequences in Europe are far more serious than the social and political consequences in Japan. Because Europe is a country of many nations which are capable of getting into political disagreements with one another. It is a country with large, imperfectly integrated ethnic and religious minorities. It is a country with large high levels of unemployment and it is a country facing potentially uncontrollable immigration flows which are going to make that unemployment worse. If Europe doesn't manage to get its economy going again and deal with its debt burdens and grow nominal GDP at a reasonable rate, I think it is playing with social and political fire on a very, very dangerous basis. I think it is therefore more important in the eurozone than in Japan that we take the possibility of monetary finance out of the taboo box and consider whether it is part of the policy armory that could help our problems. Unfortunately, I think the chances of that happening are very, very slight. Because there is a real difference between doing monetary finance in a classic one country, one government, one central bank policy and in a eurozone. In a one country, one central bank, one government, when you do monetary finance, you don't get complicated or not too complicated distributional issues. If the bank of Japan and the government of Japan agree to write off the debt that the government of Japan owes the bank of Japan, everybody agrees that the only people involved in that are the people of Japan. But you try and do the same in the eurozone and you will get the German tax player saying why are you writing off the debt of the Greeks or the Italians who should have paid this back debt in the first place? You end up with distributional arguments which get in the way of the necessary policy. So I'm afraid my belief of what is going to happen on the eurozone and this is my final slide of this forum. I think what ought to happen in the eurozone is that the eurozone is an imperfect monetary union which should progress to a much greater degree of federalisation with significant debt relief. Let's make that clear. There's got to be much bigger debt relief for Greece. If you think Greece is ever going to repay all its debts, you just haven't been looking for numbers, it's just not going to occur. There's going to be either a default or a controlled restructuring of Greek debt. There should be federalisation, there should be debt relief, there should be some categories of money finance, fiscal stimulus. If you did that, I think there could be a significant economic recovery. I've got the probability of that at less than ten percent. The scenario which worries me is that I think Mario Draghi and the leadership of the ECB have the capacity whenever the eurozone is getting close to crisis to take it away from crisis by immediate interventions even if they are only verbal do whatever it takes or particular purchases under the sovereign wealth debt purchase. But I think if they simply try and fix it by QE and negative interest rates without more radical action, the eurozone will be stuck for many years with slow growth below target inflation, high unemployment and rising political pressures. That's my most likely. I think you could well see a partial break up within five years. Greece is not nearly out of its problems and I think that problem is going to return to us this year. I'm not convinced that the Italian government debt is sustainable in the long term and that could come back as a problem. I place that as only 20% in the five years, but sadly of course if scenario two is where we reside, eventually that collapses into a break up as well. So I'm not optimistic because I think the eurozone needs the capability of thinking about monetary finance, but I don't think it's going to do it. I'm sorry to end on that somewhat pessimistic point of view, but it is where my analysis takes me.