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MEGA INTERVIEW
I have an impression pansionary monetary policies. But even something be changed in the Republic
that the fear of that was not enough to spur economic of Macedonia regarding this issue?
deflation in the growth, so in the last two years we have
developed worldis already seen negative interest rates in D. Bogov: After the financial crisis
exaggerated. It is true several developed economies. Too heavy of 2008 it is clear only that the mon-
that demand in the EU burden fell on central banks, while key etary policy is not sufficient to ensure
is quite weak, but it is structural reforms are missing. Expan- financial stability. Once again, Tinber-
theprices of energy and sionary monetary policies have been gen’s rule that one instrument can in-
other products from the accompanied by lowering of the mon- fluence only one goal, proved to be true.
commodity exchanges etary multiplier and the velocity of Therefore, a new set of so-called macro
that have a dominant money, which led to a reduced mone- prudent measures that are designed to
influence on current tary transmission. This fact shows that maintain financial stability, is being
deflationary tendencies. problems in the EU and some developed developed. Somewhere this function
Additionally, due to economies are structural and cannot be is given to a separate institution, and
globalization and solved only by influencing the nominal sometimes to the central bank. It is in-
excessive capacities variables. But instead of focusing on the creasingly believed that much better is
created in the past need for structural reforms, the bound- the communication between monetary
decade, low inflation aries of monetary policy are expanded policy and macroprudential policy when
isprobably the new again. Currently, widely discussed is the they are within a single institution. In
normal that we will have so-called concept of “helicopter money” Macedonia, according to the Law on the
to live with in the next hoping that it will spur demand. But it National Bank from 2010 the central
few years creates new imbalances that are prob- bank was given the obligation to main-
ably the germ of a new crisis. tain financial stability, as a second goal,
subordinated to price stability. I think it
Late last year it seemed that 2016 is a good solution, because the central
could be a year of a more significant bank is the first to perceive all systemic
economic recovery in the world. But this risks in the banking sector and has ad-
optimism waned over the year. Is there a equate measures for their control.
threat of deflation in the world?
What were the main conclusions
D. Bogov: I have an impression that and messages for the world and the
the fear of deflation in the developed Macedonian economy at this year’s reg-
world is exaggerated. It is true that de- ular Annual Meetings of the IMF and the
mand in the EU is quite weak, but it is World Bank?
the prices of energy and other products
from the commodity exchanges that D. Bogov: The global economy con-
have a dominant influence on current tinues to grow at a moderate rate. A
deflationary tendencies. Additionally, strong, sustainable, inclusive and bal-
due to globalization and excessive ca- anced global growth is needed. In order
pacities created in the past decade, low to achieve this, it is necessary to apply
inflation is probably the new normal a combination of structural reforms,
that we will have to live with in the next fiscal policies that support growth and
few years. accommodative monetary policies. Cer-
tainly, the combination of measures de-
One of the hot topics in the field of pends on the situation in each country,
monetary policy in the world is the issue and for the fiscal and monetary policies
of the need for duality of the objective, it depends on the size of the output gap.
i.e. whether the monetary policy objec-
tive should be only the price stability, or Thank you for the interview.
in parallel, equally important should be
also the financial stability. What is your Zoran Jovanovski
position on this issue? Are these objec-
tives always complementary? Should
May 2016 21
