Duurzaam beleggen zitindelift. Beleggers willen dat hun geld maatschappelijk verantwoord en ethisch geïnvesteerd wordt.
Maar ben je zeker dat je geld naar ‘propere’ bedrijven gaat?
In sommige duurzame fondsen zitten oliebedrijven, tabaksfabrikanten en belastingontduikers
Fondsenbeheerders verwijzen vaak naar de ESG (environmental, social and corporate governance) score om aan te duiden dat hun beleggingen verantwoord zijn. Helaas zijn er geen eenduidige regels om die score op te stellen.
In the thread below, Benjamin Braun explains Germany’s political economy. More specifically, he and Richard Deeg studied the interaction between the financial and non financial corporate (NFC) sectors.
Let me try to summarize the argument.
The German NFC sector has high profits (1) and runs a trade surplus (2).
(1) enables companies to finance their own investments. They don’t need to borrow money from banks.
(2) leads to an inflow of reserves and deposits at banks. As a result, German banks lend to foreign entities.
This seems a sensible story.
However, I don’t agree with the conclusion:
First of all, I highly doubt any policymakers really want to help German banks. If that were the case, the monstrosity of publicly owned, unprofitable banks would have been cleaned up by now.
But even if German politicians cared, it’s not clear that stronger unions or higher wages would be more than a drop in a bucket.
A higher demand for credit would have an immediate positive impact on German banks. And there is a lot of room for growth.
Home ownership in Germany is low compared to non-German speaking countries, as you can see in this picture from Eurostat.
Stimulating home ownership would boost the demand for mortgages.
More investment by the government, as called for by industry and labor unions, would also increase the domestic supply of assets for banks if it’s funded by bonds instead of taxes.
If Angela Merkel wants some more advice, she can leave a comment 🙂
These two dilemmas illustrate that central banking is inherently political.
Therefore, economists should calculate the consequences of different monetary policy options. These scenarios will make the politics of the central bank’s actions explicit. For example, I estimated the effect of deeply negative interest rates (a proposal of Miles Kimball) on banks, governments, the ECB and the private sector.
Especially in the euro area, the ECB should take differences in asset mixes between countries into account.
Increased transparency will enable central bankers to defend monetary policy against criticism.
Update 26 January 2020: my arguments are obviously not new, see for example:
What Matthew Baker did in the 1570s was to take the design process out of the shipyard, and onto paper. He drew his ships, to scale. And by using pen and paper, with geometry to make such drawings possible, he opened up grand new possibilities for design. […] He drew out new designs for frames, using geometry to work out how any variation would affect the overall shape of the hull, as well as its weight and carrying capacity – all at the cost of only time, ink, and paper, and avoiding the huge potential waste of conducting experiments at full scale in wood. His process allowed him to innovate more easily, and even to design new measuring instruments.
Interestingly, the new methods were not quickly adopted in the rest of Europe:
By the 1580s, new English ships were among the most technically advanced in Europe, and even in the mid-seventeenth century, ship plans were apparently still unknown in France. Having once lagged far behind, geometry began to give English shipbuilding the edge.