Roger Farmer z UCLA pobija tezo neoklasične teorije, da je delovanje centralne banke in sestava njene bilance irelevantna, saj da nima vpliva na obrestne mere. Bežen pogled na rezultate delovanja centralne banke – tako njenih rednih kot izrednih ukrepov (kot je kvantitativno sproščanje) to teorijo seveda povsem spodbije. Zakaj torej neoklasična teorija tukaj povsem “udari mimo”? Farmer pravi, da zato, ker ljudje – v nasprotju s teorijo – ne živijo večno. Zato tudi niso racionalni in ne optimizirajo svojih odločitev v neskončnosti, pač pa imajo zelo kratek časovni horizont. Centralne banke pač imajo bistveno daljši horizont in njihovih ciljev kratkoročno usmerjeni posamezniki ne morejo popolnoma razbrati oziroma cene, po katerih trgujejo, ne vključujejo vseh relevantnih informacij.

Here’s the puzzle for neoclassical theory. According to received wisdom (Michael Woodford’s Jackson Hole paper is an excellent exposition of this idea) the asset composition of the Fed’s balance sheet is irrelevant. If the Fed had bought more short-term government debt instead of intervening in the riskier MBS market; it would not have made one whit of difference to the economy.

Why is that? According to standard neoclassical models, all transactions are carried out by infinitely lived families who take into account the welfare of their descendants. The far sighted paternalistic patriarchs of these families trade assets with each other that are contingent on every possible future event. 

Because the price of long bonds reflects all known facts about the probabilities of future outcomes, central bank asset positions do not influence the market price of risk. When the government takes a new position in the asset markets, the private sector unwinds that position through its own open-market trades.

But that is not what happened. A wealth of evidence shows not just that quantitative easing matters, but also that qualitative easing matters. (see for example Krishnamurthy and Vissing-Jorgensen, Hamilton and Wu, Gagnon et al). In other words, QE works in practice but not in theory. Perhaps its time to jettison the theory.

Replacing all of neoclassical theory with an operational alternative is a daunting task. There is no lack of contenders. Perhaps people are irrational as the behaviorists have claimed. Perhaps the market is segmented and institutional constraints cause pension funds to favor safe assets. Perhaps there are borrowing constraints that prevent some trades from taking place. These are all possibilities and I do not want to suggest that they do not have merit. But there is a much simpler explanation for the failure of the irrelevance result. Human beings do not live forever.

The fact that our lives are finite has consequences for the efficiency of asset markets. Davis Cass and Karl Shell called this idea sunspots. Asset markets are volatile because we all, eventually, meet the grim reaper. And although governments are sometimes overturned, they have much longer horizons than individuals. That simple fact explains why the asset composition of the central bank matters.

Vir: Roger Farmer, Why Death Matters for Central Bank Policy