Short run, long run and the economic policy Director General Jukka Pekkarinen Economics Department Sustainable Business Superiority - Kestävää ylivoimaa liiketoimintaan 12 2 2009 Sustainable Business Superiority - Kestävää ylivoimaa liiketoimintaan 12.2.2009 TEKES
Interbank risk premia are decreasing... 250 Euroalue: Interbank-riskipreemioita 3 ja 12 kk vakuudettoman (euribor) ja vakuudellisen (repo) interbank-koron ero, korkopistettä 250 225 225 200 200 175 175 150 150 125 12 kk 125 100 100 75 75 50 50 25 Keskiarvot 1.1.1999-30.6.2007 3 kk 25 0 2001 2002 2003 2004 2005 2006 2007 2008 0 Source: Reuters EcoWin Economics Department 12.2.2009 12.2.2009 2
...but are still high on corporate loans 500 Euroalue: Yrityslainojen riskilisät eri luottokelpoisuusluokissa korkopistettä, 5 vuotta 500 450 400 BBB 450 400 350 300 A 350 300 250 250 200 150 AA 200 150 100 100 50 0 AAA 50 0-50 2004 2005 2006 2007 2008 2009-50 Source: Reuters EcoWin Economics Department 12.2.2009 12.2.2009 3
Share are low 180 Osakeindeksejä - suuret pörssit 1.1.2004 = 100 180 170 170 160 160 150 150 140 140 130 130 120 120 110 110 100 100 90 United States, Standard & Poors, 500 Composite, Index, Price Return, USD Euro Zone, STOXX, Blue Chip, 50 Index, Price Return, EUR 80 Japan, Nikkei, 225, Index, JPY World, MSCI, Index (LOC), Price Return United Kingdom, FTSE, 100, Index, Price Return, GBP 70 90 80 70 60 2004 2005 2006 2007 2008 2009 60 Source: Reuters EcoWin Economics Department 12.2.2009 12.2.2009 4
Forecasts are gloomy... EU COMMISSION 19.1.2009 2007 2008 2009 2010 Change in GDP, % Euroarea 27 2,7 09 0,9-1,9 19 04 0,4 Finland 4,5 1,5-1,2 1,2 Sweden 2,5 0,5-1,4 1,2 Germany 2,5 1,3-2,3 0,7 Baltic 8½ 0-5 -1½ countries Economics Department 12.2.2009 12.2.2009 5
...and have been deteriorating even in Finland % 3 Ministry of Finance: forecasts for 2009 2 1 0-1 -2-3 TK, March 2008 TK, June 2008 TK, September 2008 LTA1 2009 Source: TK, VM 9.2.2009/VM/KO/ul/ 20874.xls Economics Department 12.2.2009 12.2.2009 6
Short run and long run Stimulus is needed in the short run Measures should be timely, targeted and temporary But long run concerns should be taken into account Both from the credibility, efficacy and sustainability points of view Economics Department 12.2.2009 12.2.2009 7
Sustainability problem 1: Climate change Abatement: t 30 % CO 2 reduction target t in Copenhagen Mitigation: poorest areas Economic efficiency CDM: ability to pay vs. marginal cost of abatement: international finance flows Renewable sources of energy; cost efficient i increase R&D, innovations Economics Department 12.2.2009 12.2.2009 8
Sustainability problem 2: Finnish public finances are good by European standards, but not good enough hto sustain the demographic change at the present overall tax rate Economics Department 12.2.2009 12.2.2009 9
Sustainability problem 3: maintenance of productivity growth Finland: from catching up phase to the technology frontier Productivity growth is decelerating But ICT has kept up growth in US, SWE and FIN In Finland, manufacturing has persisted as the engine of growth Economics Department 12.2.2009 12.2.2009 10
The future? Nokia impact Three scenarios (PROF. MATTI POHJOLA) Economics Department 12.2.2009 12.2.2009 11
Sustainability gap % 6 5 4 3 2 1 0-1 -2 Julkisyhteisöjen nettoluotonanto suhteessa bruttokansantuotteeseen Kestävyyden turvaava nettoluotonanto Keskipitkän aikavälin tavoite -3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Alustava arvio, helmikuu 2009 Vakausohjelma, marraskuu 2008 Lähde: Tilastokeskus, Valtiovarainministeriö 9.2.2009/VM/KO Economics Department 12.2.2009 12.2.2009 12
Labour productivity 6 5 4 3 2 Ruotsi SWE Suomi FIN Yhdysvallat US EU-14 1 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Economics Department 12.2.2009 12.2.2009 13
Contribution to labour productivity growth 2,0 1,8 16 1,6 1,4 1,2 10 1,0 0,8 0,6 0,4 0,2 0,0 Suomi Ruotsi USA Tanska EU-15 ICT-pääoma tuottavuus ICT:n valmistuksessa Source: EU KLEMS Database March 2008 Economics Department 12.2.2009 12.2.2009 14
Change in manufacturing share 30 28 26 24 Suomi FIN 22 20 Ruotsi SWE EU-15 USA 18 16 14 1970 1975 1980 1985 1990 1995 2000 2005 Source: EU KLEMS Database, November 2007, www.euklems.net Economics Department 12.2.2009 12.2.2009 15
Nokia impact koulutus (ja ikärakenne) investoinnit teknologia 2,5 2,0 15 1,5 Nokian vaikutus = 0,7 prosenttiyksikköä ys vuodessa 1,0 0,5 0,0 toteutuneet kontribuutiot kontribuutiot ilman ICT-tuotantoa Economics Department 12.2.2009 12.2.2009 16
Three scenarios koulutus human capital (ja ikärakenne) investoinnit investment teknologia technology 30 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1980-1990 1990-1998 1998-2005 paluu Return 80- to the luvulle 80 s nykymeno Like now jatkuu paluu Return 90- to the luvulle 90 s Economics Department 12.2.2009 12.2.2009 17