Is the original inflation law ineffective? Hear what Zhou Xiaochuan said

Original title: Is the original inflation law ineffective? Hear what Zhou Xiaochuan said

“Inflation is the ultimate goal for the central bank to observe the economic and financial conditionsvariableIt is also often an intermediate variable. Traditional measurement of inflation faces four shortcomings and challenges. “On November 28, Zhou Xiaochuan, president of the Chinese Finance Society and former Central Bank governor, said at the 2020 Chinese Financial Forum Annual Meeting.

Zhou Xiaochuan has said this in the pastcurrencyThe concept of policy and practice manuals is that ifprovision of currencyToo much, it will pass by conductionmechanismReflection in the prices,priceThe increase creates inflation, which in turn requires an adjustment in monetary policy. Now this law is subject to three challenges: the concept and category of currency may have changed; there is a problem with the mapping relationship from currency to inflation; the concept, category and measurement of inflation have problems, which manifest themselves in the following four aspects.

　　01 、Less inclusion of asset prices will lead to distortions, particularly long-term comparison distortions

Zhou Xiaochuan said that from a long-term perspective, a major flaw in the current inflation measurement problem is thatinvestment, The coverage of the asset price measurement is relatively small and the weight is relatively low.According to the past conceptual system, andconsumptionThe main thing that matters isCPI, The investment is mainly related toenterprisewithbusiness ownerThere is a relationship, but in fact a higher wealth will certainly affect the future life, for example it will decrease the return on retirement investment.

Regarding housing, Zhou Xiaochuan said the previous concept was that buying a home was considered an investment and that price changes were not counted in the CPI; later, the rent could be counted, but the weight in the basket was too small; and later, people claimed to use the rent analogy for self-housing. Measurement, but the weight of the housing is still relatively small. As the world population rose to 7 billion, urbanization becameworksAs an unavoidable choice, the availability of urban land has become scarce and expensive, making inflation measures no longer able to ignore or underestimate housing factors.

In short, there are problems with the long-term measurement of inflation, particularly the way asset prices are reflected in quality of life and spending structure. There is also the question of long-term investment returns that should be discounted in current inflation.

　　02 、Which income is used as an expense basket for calculating inflation

The CPI’s current spending basket is household disposable income.Zhou Xiaochuan said that a considerable part of the standard of living and quality of household and person comes from unavailable income, including income from paying taxes. .Public service, Pre-funded accumulated pensions, compulsory premiums, etc.

“Have we ever thought that if the items corresponding to these unavailable incomes became more expensive, they should also be included in inflation?” Zhou Xiaochuan said, the proportion of this part of the expenditure in gross income can no longer be ignored. For example, pre-funded pensions included in the public pool are likely to behard and tiring workPart of the income is sold by the employer and part by the employee, often before the family’s disposable income, but it has become an important part of consumption and quality of life.

In his view, perhaps a more comprehensive price index based on net income before taxes and fees, as the basket and corresponding inflation can better reflect “life.cost“In any case” the wool comes out of the sheep “, when people believe that more contributions are needed for retirement, medical care and education for children, it means that these projects are now more expensive.

Zhou Xiaochuan pointed out that another related problem is whether people can perceive orto measureYour net income before tax? As it is not easy to calculate, people often make horizontal comparisons with people of the same education, skill level, and work intensity. Indeed, the measurement of income and what income is used to define the spending basket and calculate the price level will influence the perception of inflation and the expectations of specific people.

　　03 、How labor measurement affects the perception of inflation

Zhou Xiaochuan pointed out that the impact of labor spending on inflation includes working time, intensity, commuting, whetherOver time, How about a vacation.

According to him, there are two issues that need attention. One is that in the current competitive situation in the workplace, compared to the previous generation or the previous generation, the individual is moreTraining skillsInvestment in education and learning is expected to increase significantly, and if you don’t invest enough in this area, you may not be able to compete for a good job.to send。

The second is free time: in economics, free time can produce utility. Free time is often complementary to work. The higher the work intensity, the more time is occupied and the less free time is.

　　04 、Benchmark, comparability and reference framework

Zhou Xiaochuan believes that in the past the price index was a vertical ratio, which also brought some problems.For example, technological development has leddigital information, IT and other related servicesProductPrices calculated according to Moore’s law have fallen significantly and can contribute a lot to the decline or negative adjustment of the price index.

“In reality, people do not form their perceptions and expectations of satisfaction according to rigid longitudinal mathematical formulas or statistical definitions.” Zhou Xiaochuan said the structural changes between generations will be very dramatic. In 2019, the life expectancy of the Chinese was 77.3 years.marketThe country is relatively tall and is expected to be even higher in the future, but in 1949, life expectancy was only 35 years.

Life expectancy will lead to pension inflation. Zhou Xiaochuan said that the previous generation’s average life expectancy was low and that retirement takes about dozen years of work to support retirement for about 10 years, but now it has to support nearly 20 years. This change is often not reflected in the calculation of the longitudinal ratio of the time series, so some benchmarks, parameters or reference systems must be adequate. This adjustment could have a bigger impact, one of which is inflation expectations.

“If future inflation andConsumer BehaviorIt mostly depends on inflation expectations, so it’s hard to say that the current price index formulas and regular expressions are accurate, but consumer expectations aren’t fully based on the formula, this needs to be fixed. “Zhou Xiaochuan said.

(Source: Beijing News)

(Responsible publisher: DF387)