Regarding Japan’s lost 20 years and its relationship with the Plaza Agreement, there have been many disputes, but what many people did not notice is that the Plaza Agreement is not an agreement between the United States and Japan. It is an agreement between the United States, Japan, Germany (West Germany), France and Britain.
On September 22, 1985, the finance ministers and central bank governors of the United States, Japan, the Federal Republic of Germany, France and the United Kingdom (G5 for short) held a meeting at the Plaza Hotel in New York. An agreement on the orderly depreciation of the exchange rate of the U.S. dollar against major currencies to solve the problem of the US's huge trade deficit.
Because the agreement was signed at the Plaza Hotel, the agreement is also called the "Plaza Agreement".
Looking at the development of the Japanese economy in the past three decades, the 1985 Plaza Accord was a turning point. Some analysts pointed out that after the Plaza Accord, Japan’s export competitiveness was hit hard by the appreciation of the yen, and the economy was sluggish for more than ten years.
Even in the economics circle, quite a few people believe that the Plaza Accord is a huge conspiracy that the United States has laid out to bring down Japan.
How can there be so many conspiracies? Once a problem is encountered, it is Mi Di’s conspiracy. This is not the way to solve the problem. After all, I have learned the relationship between internal and external factors. In fact, in the mid to late 1980s, the Japanese economy had stalled.
It is far-fetched to attribute Japan’s “lost ten years” completely to the “Plaza Accord”. The “Plaza Accord” is like a fire set by the United States and burned with the “oil” poured into the Japanese government’s policies. Japan for ten years.
In contrast, why Germany, which also signed the Plaza Agreement back then, has not lost twenty years, and has become stronger and has become the world's largest exporter of industrial products.
This really puzzles countless people. Are Germans all gods and can be immune to American bullets? Of course not. The reason for avoiding the mistakes of Japan is because Germany has taken a completely different path from Japan.
First, a different road chosen by Germany itself.
In economics, "independent monetary policy, free capital flow, fixed exchange rate" is the Mundell triangle. Only two of the three can be selected. A country cannot have three at the same time.
is nervous and staring at the exchange rate differently from Japan. Germany chose the first two and abandoned the exchange rate intervention, focusing on domestic price and production stability, and then considering exchange rate stability.
is different from Japan’s crazy RRR cuts in an attempt to reverse the exchange rate. Germany lowered the discount rate and mortgage interest rate, but raised the deposit interest rate to more than 5.5%.
is different from Japan’s Mum obediently obedient to the US monetary policy, the growth rate of M2 rose from 8% to 12%, but the growth rate of M2 in Germany continued to decline slightly.
By virtue of this series of differences, Germany successfully avoided the rapids, not only did not have a large-scale asset bubble, the economy and exports were not even affected by the large fluctuations in exchange rates.
A few years after the signing of the Plaza Agreement, although the exchange rate continued to rise, economic growth was still as high as 2.3%. By 1986, it even replaced the United States as the world's largest trade exporter.
Germany is always looking inward. Its central bank takes stabilizing prices as its own responsibility and has not implemented ultra-low interest rates and excess currency issuance policies, so there has been no real estate and stock market bubbles. Of course There is no long-term recession or depression after the bubble burst.
Second, the impact of the establishment of the European Union on Germany
Germany is in the center of Europe, and European integration (the establishment of the European Union) has shared many risks for Germany, but there is no doubt that the difference in policy is the difficulty for Germany to get out The essential.
The establishment of the European Union is arguably the biggest beneficiary for Germany. In 2016, Germany's GDP reached 3,134.1 billion euros, and its per capita GDP reached 38,000 euros.
A study published by the Bertelsmann Foundation in 2014 showed that since the establishment of the European Union in 1993,The European internal market with the free flow of goods, people, capital and services has played a positive role in promoting the economic growth of member countries, but there are big differences:
Among the big countries, the German economy has benefited the most, with 37 billion yuan benefiting from the internal market every year. The euro is equivalent to 450 euros per person per year; the annual per capita benefits of southern European countries are significantly lower, with Italy benefiting 80 euros per person per year, Spain 70 euros, and Portugal 20 euros. With the largest volume of Germany, there is a big gap after more than ten years of accumulation, and the gap between southern European countries and Germany is still widening.
The European Union is Germany’s largest export market. 60% of Germany’s export products are sold to the European Union, including 40% circulating in the Eurozone and 20% circulating in the EU Central and African Eurozone countries. Germany 1/6 Employment depends on exports to the EU.
"Made in Germany" sells well in Europe to a large extent benefited from the establishment of the euro system and the formation of the EU's internal market.
The introduction of the Euro established a unified European Union market, which made relatively weak countries lose the barrier of relying on exchange rates to block German high-end products. “Made in Germany” was able to quickly occupy the EU’s internal market and strengthen the competitiveness of the German economy. . In comparison with
, it can be seen that Germany first has strength, and then it is also the advantage of trade integration.
Unlike the United States before the Plaza Accord, Japan’s main exporting country, Germany’s main exporting countries are relatively scattered. Apart from the United States, Germany also has a very large share of exports to France, the United Kingdom and Italy.
Germany 2000-2015 foreign trade and foreign trade surplus development (unit: 1 billion euros, data source: German Federal Statistics Office)
2. East and West Germany unification The benefits of
This is a perspective that few people mention. Compare the economic situation between West Germany and Japan after the same signing of the Plaza Accord: Five years after the Plaza Accord, East and West Germany were unified, West Germany used The influx of funds subsidized East Germany and acquired a series of former state-owned enterprises in East Germany, such as Miller Weingarten’s acquisition of Erfurt (these two companies should have heard of few people, and the small and medium-sized enterprises in Germany were originally nothing Reputation).
has also obtained a large number of cheap labor and huge market of the same kind of the same text and the same strict vocational education.
We must know that East Germany before reunification had the best economic development among the socialist countries. It once reached the 20th place in the world. Here we have to mention the high quality of the German nation. After the reunification of Germany, Germany The government gave a lot of subsidies to East Germany, but at the same time it also absorbed a large number of high-quality talents suitable for precision manufacturing and high-end manufacturing.
Later, Germany joined the euro area and relaxed the immigration requirements for EU technicians. Similar considerations were also taken.
Looking back at Japan’s immigration policy and its attitude towards East Asian economic integration (if there is such a thing as integration), it is basically toward the construction of robots to complete 99% of the labor, and humans enter the shoveling country that is allocated on demand. It's dark in the direction of the road.
A comprehensive and true analysis of the Plaza Agreement shows that domestic policy errors will cause more significant damage to the national economy than exchange rate wars.
This truth has been revealed by Mundell in the Impossible Triangle Theory. This theory reveals that independent monetary policy, free capital flow and a fixed exchange rate cannot be satisfied at the same time, and the importance of the three is decreasing in order.
It’s just that Mundell later embarked on the road of opposing his own theory in order to adhere to his "optimal currency area" dogma theory, one-sided and inappropriately emphasized fixed exchange rates while ignoring the importance of independent monetary policy. Sex.
After the Plaza Accord, Japan still believes that the exchange rate policy is the most important. In order to compensate for the possible negative impact of the appreciation of the yen, the monetary policy has greatly promoted the bubble economy and lost its independence to formulate policies tailored to local conditions. , Finally caused a big mistake.
And GermanyChina has chosen different paths. It can be seen that there are many ways to resolve difficulties, and different choices will determine the final result.
(Teacher Zhang's public account in Canada: canada-zh, please indicate the source, thank you)
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