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“Are you talking Wicksellian differential?”
Entre uma cervejinha e outra aparece um dos demitidos da Cosipa, digo Usiminas, e pergunta alto, abafando a boa música, dá para recuperar nosso ganha-pão?
Duvido que a músca pare! mas com certeza ninguém vai contar para ele que a decisão de botá-lo na rua foi tomada por uma das 48 entidades financeiras que dominam o planeta e estão enfrentando um processo deflacionário destruidor.
Se ficaram curioso do porque o Brasil está fora das mesas de negociação que importam, ai vai um motivo a mais.
“That is why(in my estimation)most large corporations are sitting on boatloads of cash – they can’t find a return that meets their cost of capital”
Precisely.
“The low interest rates don’t seem to be translating into low cost of capital for most businesses”
Oh, but they do.
https://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=124.MIR.M.DE.B.A2A.K.R…
https://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=124.MIR.M.FR.B.A2A.K.R…
Obviously, business credit involves a yield spread above safe and liquid government bonds (due to perceived risk, lower liquidity, maturity transformation and market frictions). That yield spread has not markedly widened since 2007.
When interest rates on government bonds fall to -0.5%, yields on corporate bonds might typically be 200-300 basis points higher (depending on risk assessments and efficiency of financial intermediation). If nominal money interest rates could be cut to -3%, with government bond yields also consequently falling to around -3%, then under such circumstances the interest rate for (larger scale) business finance would fall to near zero.
So, to round it up: yes, businesses are not investing because their cost of capital finance is too high viz-a-viz expected returns on capital investment. And yet, further reduction in nominal interest rates will (with offset) reduce that cost of capital finance for business, and hence expand business investment (boosting both immediate aggregate demand and long term capital intensity & labour productivity).
“Are you talking Wicksellian differential?”
Indeed. While natural equilibrium real interest rates (or Wicksellian interest rates) cannot be directly measured, the consequences of disequilibrium (deflationary or inflationary pressures respectively) are measurable. Despite nominal interest rates against an effective nominal lower bound (somewhere in the region of zero, or just a little lower), we still perceive more deflationary than inflationary pressure and broad symptoms of demand deficiency across the economy.
Evidently, the real Wicksellian interest rate is negative across most of the developed world. I would argue that both technological and demographic factors are apt to further depress Wicksellian interest rates over the approaching decades – while that point is controversial, there are clear explanatory and predictive mechanisms which I consider to be accurate models of reality and which indicate falling Wicksellian rates.
The only resilient solution is monetary reform to facilitate arbitrarily negative nominal interest rates.
Teatro sagrado
Sacred play
Pragmatism as a theory of meaning implies that texts, words and other symbols are consecrated by our use of them; the Holy Bible is Holy to those who read it as sacred story or divine guidance, and cannot be holy without those readers who live by its light.
One way to renew our remembrance of the actual relation between symbol and practice is to play with words, especially with scriptural words. Most genuine religious traditions include the practice of sacred wordplay; for instance, the Sufi tradition in Islam. ‘Indeed, one aspect of mystical language in Sufism that should never be overlooked is the tendency of the Arabs to play with words’ (Schimmel 1975, 13).
All the world’s a stage, and we all play our parts – this is the presentation of self in everyday life (Goffman 1959). Children learn to do this by ‘implicitly modeling the larger social structure’ in their play (Donald 1991, 174). Science too is a special kind of performance learned by emulation of mentors (Polanyi 1962). Prophecy and martyrdom have performance elements (Lawson 1998). From Huizinga’s Homo Ludens to Wittgenstein’s ‘language games,’ we clarify the deep structures of cultural forms by abstracting performances from those concerns which insist on ‘taking them seriously’ – which means subordinating them to extraneous purposes – and playing with forms that really matter.
Life is a game whose purpose is to discover the rules, which rules are always changing and always undiscoverable. For purposes of recreation, renewal and discovery, we play games of which the objects and rules are well and explicitly defined. Within these self-imposed limits, consensus is not a distant or unattainable goal but a present, pragmatic reality. Even competitive games are unplayable unless the opponents collaborate on applying the rules and pursuing the object of the game. True, like any artistic endeavor, such games can be used for entertainment, or used for external ends like fame or gain. But a game in its purity encloses its purpose and object: it is useless as the universe. To play with perfect concentration is to realize the use of the useless (Chuang Tzu).
Taking scripture seriously, dedicating and consecrating yourself as Ideal Reader, means committing yourself to play with the terms of the text until they tell the whole truth in which your whole life and practice can play a part.