Andrew Mountford's picture
Affiliation: 
Royal Holloway
Credentials: 
Professor of economics

Voting history

The Importance of Elections for UK Economic Activity

Question 1: Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?

Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
The coalition's austerity policies have had a significantly negative effect on the UK economy relative both to the best potential policy and to the lower bar of what alternative governments would have done. The biggest shortcoming in the coalition is their failure to invest in public capital while being able to borrow at close to 0% interest. The productivity of the UK both now and in the future is consequently significantly below potential. What are these public capital projects? Well one can argue about which gives most bang for buck (I would argue for education, science and public housing) but when interest rates are 0% any project only needs to cover its costs and surely there is no shortage of projects that do this. For an accessible discussion of some public investments that would increase future growth see http://blogs.lse.ac.uk/politicsandpolicy/productivity-the-elephant-in-the-room Another big problem is the housing crisis which the coalition has exacerbated. Their failure to invest is in my view linked to their austerity agenda although their failure to tax housing may be something separate. Too much of UK savings is currently spent on housing and real estate lending is far too large a proportion of UK banks' balance sheets. This means that not enough is being lent to the productive economy which again reduces growth. This also has a direct result on people's well being as their living costs are higher than they need be. House prices are too high and should be taxed much more with the proceeds spent on a huge investment in public housing. See The Economist's recent article for the scale of the problem http://www.economist.com/news/britain/21645735-david-camerons-housing-policies-are-all-posturing-weak-foundations

Transparency and the Effectiveness of Monetary Policy following the Warsh Review at the Bank of England

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Question 2: Do you agree that the Bank's proposal to release the policy decision, MPC minutes and (once a quarter) the Inflation Report all at the same time justifies a change in the structure of MPC meetings from two consecutive days to a process in which in the MPC meetings are spread out over seven days?
 
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Answer:
Neither agree nor disagree
Confidence level:
Not confident at all
Comment:
I must be missing something as I don't understand why this matters. If the policy makers are getting the best advice, data and analysis then it shouldn't matter when or how they meet? Is there any evidence that discussion during the committee meeting has ever changed anyone's mind?
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Question 1: Do you agree that the simultaneous release of the policy decision, the enhanced minutes (including the voting record) of the MPC meeting and (in the relevant months) the release of the Inflation Report will facilitate inference on the likely stance of monetary policy?
 
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Answer:
Disagree
Confidence level:
Not confident
Comment:
I don't see why simultaneity matters. What does matter is transparency. Its important that the public and the markets know the rationale and information/data behind policy makers' decisions. This allows faulty reasoning and analysis to be challenged and corrected and should also make future decisions more easy to predict. Clearly a long delay would reduce transparency but a couple of weeks shouldn't matter. It would still leave plenty of time before the next interest rate decision.

2014 Autumn Statement

 

Question 2: Do you agree that the underperformance of tax receipts in recent years, provides a strong case for higher taxes?

Answer:
Strongly Agree
Confidence level:
Extremely confident
Comment:
Yes both to reduce the deficit and to fund much needed public investment. A successful economy is based on having highly productive inhabitants and this requires investment in providing them with globally competitive skills. It also requires investment to make sure the UK is an efficient productive place to do business such as investment in R&D, government administration and transport infrastructure and also in things like housing so that workers feel wealthy with their income and don't need to spend a disproportionately large share of their income on essentials such as housing costs etc..etc..

Question 1: Do you agree that the scale of this planned reduction in total managed expenditure is credible?

Answer:
Disagree
Confidence level:
Confident
Comment:
Credibility is as much about politics as economics. The proposed cuts imply huge hardship for vulnerable members of society e.g. the appalling state of social care for the elderly is well documented. I think a representative member of the UK would not carry out the proposed cuts and would look for another way to manage the deficit (e.g. raise taxes ). But whether a future government would see these proposals through does not only depend on this but also on the strength of their political opinions and how insulated they are from their effects(politically and economically)

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