Angus Armstrong's picture
Affiliation: 
National Institute of Economic and Social Research
Credentials: 
Director of Macroeconomic Research
Visiting Professor, Imperial College London

Voting history

2014 Autumn Statement

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

Answer:
Disagree
Confidence level:
Confident
Comment:
I doubt the GDP growth forecasts will be met with this extent of cuts. Therefore the projected decline in the ratio is unlikely to be achieved.

Devolving Income Tax Powers within the UK

Question 1: Do you agree that the economic benefits of devolving full income tax powers to the Scottish Parliament and Welsh Assembly outweigh the possible costs?

Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
I suspect there is a fallacy of composition here: what may 'appear' beneficial to Scotland would be detremental to the Union and therefore Scotland within the UK. First, different tax rates on mobile factors lead to inefficiency, complexity and evasion. Second, as income tax is the most 'visible' tax, there would be even less connection to UK policies. Third, income tax in Scotland is more volatile than in the UK which itself seems to have variable trends. There may need to be substantial revenue borrowing powers or pro-cyclcial policies. Fourth, if other nations follow, the UK government would lose direct control over its biggest source of tax revenue, which ould be 'careless' to say the least when the UK govt has a high borrowing requirement.

Question 2: Do you agree that that there is a clear economic case for establishing "English votes for English laws" with the same tax and spending powers as the Scottish Parliament?

Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
While I accept that devolving full income tax power to Scotland creates a clear case for some form of 'chamber' for 'English votes for English laws', I see this as problematic for the Union. The UK government would lose direct control of almost one third of its tax base (income, stamp, LAs and landfill taxes). This would change the value of the claim of gilt holders and reduce the capacity of the UK government to act as an 'insurer of last resort'. Indeed, the further that powers are devolved from the direct control of the central government the more this comes to resemble a monetary without a fiscal union.

Secular Stagnation

Question 2: Do you think that current structural and fiscal policies should place a considerably greater emphasis on pushing the natural rate into positive territory?

Answer:
Strongly Agree
Confidence level:
Confident
Comment:
Positive real rates would be part of a return to steady state. Greater emphasis on how to achieve this through more active structural policy would be welcome. To be specific, such structural policies would include deeper financial reform and reducing tax breaks for leverage (including sensible housing taxation).

Question 1: Do you agree- making your own definition of secular stagnation clear if you disagree with that offered here- that it is more likely than not that the advanced Western economies have entered into a period of secular stagnation?

Answer:
Disagree
Confidence level:
Confident
Comment:
There is more than one explanation for the configuration of slow growth, negative real rates and below target inflation. I suspect that private balance sheets and the unreconstructed financial sector are central to the stagnation. Is this within the 'secular stagnation' story? Since I don't agree that rising public debt and QE are obviously stimulative policies, then my interpretation is supply side / headwinds.

Pages