【行业研报】国家经济和社会研究所-普京与《正常化纪事报》（英）-2023.8_市场营销策划_重点报告.docx

Nationa1InstituteofEconomicandSocia1ResearchMRPUTINANDTHECHRONIC1EOfanorma1isationFORETO1DJagjitS.ChadhaNationa1InstituteofEconomicandSocia1ResearchNIESRDiscussionPaperNo.551August2023AbouttheNationa1InstituteofEconomicandSocia1ResearchTheNationa1InstituteofEconomicandSocia1ResearchisBritain's1ongestestab1ishedindependentresearchinstitute,foundedin1938.Thevisionofourfounderswastocarryoutresearchtoimproveunderstandingoftheeconomicandsocia1forcesthataffectpeop1e's1ives,andthewaysinwhichpo1icycanbringaboutchange.Overeightyyears1ater,thisremainscentra1toNIESR,sethos.Wecontinuetoapp1yourexpertiseinbothquantitativeandqua1itativemethodsandourunderstandingofeconomicandsocia1issuestocurrentdebatesandtoinf1uencepo1icy.TheInstituteisindependentofa11party-po1itica1interests.Nationa1InstituteofEconomicandSocia1Research2DeanTrenchSt1ondonSW1P3HET:+44(0)2072227665E:enauiriesniesr.ac.ukRegisteredcharityno.306083Thispaperwasfirstpub1ishedinAugust2023CompetingInterestStatement:Theviewsexpressedinthispaperarebasedonresearchandarenotattributedtotheorganizationstowhichtheresearchersareaffi1iated.Therearenoconf1ictsofinterest.Theusua1disc1aimerapp1ies.©Nationa1InstituteofEconomicandSocia1Research2023MrPutinandtheChronic1eofaNorma1isationForeto1dJagjitS.ChadhaAbstractMajorcentra1bankshavebeencaughtina1owinterestratetrapforoveradecade.Thetemporaryresponsetothefinancia1crisisof2008-9hasbecomesomethingofaregime.TheFedera1Reserve,forexamp1e,attemptedtoeasequantitativeeasingin2013butthissta11edfo11owingthe''tapertantrum,zandcommencedanorma1isationintheFedera1Fundsratefrom2015butduringCovidmajorcentra1banksaroundthewor1drapid1yreturnedpo1icyratestoaroundzero.1owpo1icyrateshavebeentheresponsetotightercreditconditions,excessiveg1oba1savings,1ow1eve1sofinvestmentandfisca1conso1idation.Buttheyhavea1sop1ayedaro1einprope11ingassetpricegrowthandincreasing1eve1sofindebtedness.Theaccommodativestanceinmonetarypo1icy,aswe11astheimpetusfrompreviousmonetaryandfisca1interventionsseem1iketohavestokedinf1ationtoahigher1eve1thatmightotherwisehavebeenthecasefo11owingtheshockofawarontheEuropeancontinent.Butmaya1sohavefina11ysecuredanorma1isationinpo1icyrates.C1assification:E43zE58zE61Keywords:Monetarypo1icy,UkraineWarzNorma1isation,1iquidityTrapAcknow1edgmentsThisessayhasbenefittedfromcommentsandconversationswithTimBes1eyz1uisaCorrado,MickCoxzPau1FisherzStephenMi11ardzPau1Mortimer-1ee7DmytroNata1ukhazAdrianPabstzNicho1asReed1angenzSi1vanaTenreyroandthecommentsfromananonymousreferee.Ithasbeenpreparedfor1SEPub1icPo1icyReview:Specia1issue''Russia'sWarinUkraineandtheFutureoftheG1oba1Order77.Anyopinionsexpressedareminea1one.IntroductionMrPutin,sinvasioninUkrainehasimpartedaconsiderab1eshocktothewor1deconomy.Attheendof2023,inf1ationintheOECDcountriesstoodat1.2percent.Bytheendofthefirstquarterof2023,ithadrisento8.8percent.Overthesameperiod,g1oba1po1icyratesrosefrom-0.5percent,0.2percentand0.1percentintheEuroAreazUSAandUKrespective1ytostandat3.25percent,5.0percent,4.5percentbyApri12023.According1y,theNationa1InstituteofEconomicandSocia1Researchhadforecastwor1dGDPtogrowat4.2percentand3.5percentin2023and2023inFebruary2023butbyFebruary2023thishadbeenheavi1yreviseddownto2.3percentand2.8percentrespective1y.ThesharpincreaseinenergyandfoodcostssincetheRussianinvasionofUkrainehasnoton1ythreatenedpricestabi1itybuthasa1soaskedseverequestionsofthemonetaryandfisca1frameworkswhichcopedsowe11withstabi1isingtheg1oba1economyoverthepreviousquarterofacentury.Manyhadarguedthatthisperiodofextraordinarymonetarypo1icy,whi1ehe1pfu1inavoidinganextendeddepressionaftertheg1oba1financia1crisis,hadbeenextendedtoo1ongandexpandedtoofar.Theconsequenceofthiswasanunnecessari1y1argeamountofquantitativeeasing,burgeoningpub1icdebt,andanincreaseinthefractionofunproductivefirms,aswe11asthemispricingofriskinfinancia1markets.Ifnotasecu1arstagnation,bywhichImeanaperiodofs1owstructura1growththathasrequiredhistorica11y1owinterestratestopreventdef1ation,theperiodseemstohavehadmanyofthecharacteristicsofa1iquiditytrap,withfirmshoardingcashratherthaninvesting.Itwou1dbeironicindeedifanactofinternationa1aggressionweretobeprovidetheimpetustocorrectamisa1ignmentinthestanceofmonetarypo1icy.ContextTheinvasionofUkrainecameataprecariousmomentforag1oba1economysti11tryingtorecoverfromtheimpactoftheCovidpandemic.Outputhadbare1yreacheditspre-CovidpeakinmostOECDeconomieswhenRussia'stankscrossedUkraine'sborder.Acrossthewor1d,thefisca1responsetoCovidzintermsofadditiona1expenditureandforegonerevenue,amountedtosome18percentOfadvancedeconomiesGDPin2023prices,aswe11asanother10percentofGDPintermsofequity1oansorguarantees,1Whi1emanymaintainedthattheCovidshockwasprimari1yonetothesupp1y-side,withrea1marketsindysfunctionandworkerswithdrawnfromthe1abourforce,therewerea1soanimpactonthedemand-side.Theseweremanifestmostobvious1ywitharadica1increaseinthesavingsrate,withsomeofthisriseforcedandsomeprecautionary.Asthepandemicreceded,thewor1denteredintoaperiodofreadjustmentfro