In 1980, the econometrician David Hendry (now Sir David) investigated a key economic question: what causes inflation? Hendry looked to the data for insight. He speculated that a particular variable, X, was largely responsible. He assembled data on variable X, performed a few deft mathematical tweaks and compared his transformed X with the path of consumer prices in the UK. Graphing the result showed an astonishingly close fit.
The only snag: X was cumulative rainfall. Since consumer prices and cumulative rainfall both rise over time, Hendry had an excellent platform for finding his spurious correlation. Statistical sleight of hand did the rest.
Hendry wanted to demonstrate just how easy it was to produce plausible nonsense by misusing the tools of statistics. “It is meaningless to talk about ‘confirming’ theories when spurious results are so easily obtained,” he wrote.
All this is by way of preamble, because a hot topic in economics at the moment is the role of finance in the health of the economy. For many years, economists have tended to believe that a larger financial sector tends to be good news for economic growth, with statistical evidence to back this up.
It won’t surprise anyone to hear that this belief is now viewed with some scepticism, and the statistical studies now back up the scepticism too. Several recent research papers have found that finance can be bad for economic growth.
Given this statistical volte-face, Hendry’s conjuring trick comes to mind. Are our statistical studies simply serving as decoration for our existing prejudices?
A recent note by William Cline of the Peterson Institute for International Economics worries that new anti-finance research rests on a statistical illusion. Rich countries tend to grow more slowly than poorer ones. But rich countries also have larger banking sectors. A naive analysis, then, would show that large banking sectors are correlated with slower growth. But, points out Cline, the same statistical methods show that doctors are bad for growth and that telephones are bad for growth and even that research and development technicians are bad for growth. In reality, all that is being shown is that being rich already is bad for further growth.
彼得森国际经济研究所(Peterson Institute for International Economics)的威廉克莱恩(William Cline)在最近一份研究报告中表达了担忧——新的反金融研究是建立在统计学假象基础上的。与较贫穷的国家相比，富裕国家往往增长更慢。但是，富裕国家同时也拥有规模更大的银行部门。于是，幼稚的分析将据此推断，大型银行部门与较慢的增长之间存在相关性。但是，克莱恩指出，同样的统计学方法也可以显示医生不利于增长、电话不利于增长、甚至研发专家也不利于增长。而事实上，唯一能够得出的结论是，已经达到富有不利于进一步增长。
Cline makes a good point but a narrow one. It’s not particularly helpful to analyse banking like salt in cooking or water on your vegetable patch, and conclude that “some is good, too much is bad”. Unlike salt and water, banking services are complex and diverse. There’s a difference between a mortgage, a payday loan, life insurance, a credit derivative, a venture capital investment and an equity tracker fund. They’re all financial services, though.
More persuasive analyses of the relationship between finance and growth are asking not just whether finance can grow too big to be helpful but what kind of finance, and why.
In two working papers for DNB, the Dutch central bank, Christiane Kneer explores the idea that the trouble with banking is that it sucks talent away from the rest of the economy. Kneer looked at the process of banking deregulation state by state in the US and found that banks hired skilled individuals away from manufacturing, where labour productivity fell. If Kneer is right, too much finance is bad for growth because the banks are gobbling up too many of the smartest workers.
Another possibility, explored by economists Stephen Cecchetti and Enisse Kharroubi, is that large banking sectors aren’t doing their classic textbook job of funding the most productive investments. Instead, they like to lend money to organisations that already have collateral. Mortgages make attractive loans for this reason. Loans to a business that already owns an office block or an oil refinery are also tempting. But lending to a business with more intangible assets, such as an R&D department or a set of strong consumer relationships, is less attractive. Perhaps it is no surprise when Cecchetti and Kharroubi find that larger banking sectors are correlated with slower growth in R&D-intensive parts of the economy. But it is not encouraging.
经济学家史蒂芬切凯蒂(Stephen Cecchetti)和艾尼塞哈鲁比(Enisse Kharroubi)探索了另一个可能，即大型银行部门并未履行其在经典教科书中的职责——为最具成效的投资提供资金。相反，它们喜欢向已经有抵押物的组织放贷。正是由于这个原因，抵押贷款成了具有吸引力的贷款。向已经拥有写字楼或炼油厂的企业放贷也颇具吸引力。但是向拥有较多无形资产（比如研发部门或一系列强大的客户关系）的企业放贷，则没那么具有吸引力。切凯蒂和哈鲁比发现，在研发密集型的经济领域，较大的银行部门与较慢的增长之间存在相关性，这或许并不令人意外，但不是好事。
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Such research reminds us that we shouldn’t simply bash “banking” or “finance” in some generic way, blaming the banks for anything from the weather to the struggles of bees. We need to look at the details of what the financial services industry is doing, and whether financial regulations are protecting society or making things worse.
The truth is that we desperately need a strong banking sector. This entire research literature on finance and growth was originally kicked off by development economists who had observed that poor countries struggled to develop if they didn’t have decent banks. Thorsten Beck, an economist at Cass Business School, first started studying the effects of finance when he worked at the World Bank. “I didn’t care about the UK or the Netherlands. I cared about Kenya, Chile and Brazil.”
真相是我们绝对需要一个强大的银行部门。有关金融与增长的整套研究文献，最初是由发展经济学家奠基的，他们注意到穷国如果没有像样的银行便难以发展。卡斯商学院(Cass Business School)的经济学家托斯滕贝克(Thorsten Beck)最初是在世界银行(World Bank)工作期间开始研究金融的影响。“我那时不关心英国和荷兰。我关心的是肯尼亚、智利和巴西。”
Without a strong and sizeable banking sector to lend money to businesses, it is very hard for a poor country to grow. It may well be that we have more finance sloshing around the economy than we can use. That is a big problem — but it is also a first-world problem.