Christopher Martin's picture
Affiliation: 
University of Bath
Credentials: 
Professor of economics

Voting history

Brexit and financial market volatility

======================================================================

Question 1: The value of the pound fell sharply this week. Do you agree that the public debate on Brexit can be expected to (continue to) lead to a substantially higher level of exchange rate volatility in the upcoming months?

======================================================================

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
The UK is highly dependent on foreign trade and is a major global financial hub. Brexit would be a major dislocation to the UK's financial and trading relationships with considerable uncertainty about what new system would emerge in the aftermath of an exit decision. The electorate seems divided but uninformed and disengaged and responsive to idiosyncratic populist politicians.

Market Turbulence and Growth Prospects

======================================================================

Question 2: Do you agree that the falls in share prices, low oil prices and the slowdown in some emerging market economies will have a significant negative impact on the UK’s economic recovery?

======================================================================

Answer:
Agree
Confidence level:
Confident
Comment:
It probably won't affect consumption or investment greatly at this stage, but it will increase the current account deficit, which is already alarmingly large. But the global slowdown should not be used as an alibi for the underlying weaknesses of the UK economy. Productivity growth is low and a continual concern. This holds back wage growth,meaning that consumption growth is fuelled by excessive borrowing. A major factor in this dismal picture is the persistently low level of investment, something that shows no sign of improving. There is government investment in infrastructure; this needs to be extended and increased.

======================================================================

Question 1: Do you agree that economic growth prospects for the global economy have seriously deteriorated?

======================================================================

Answer:
Agree
Confidence level:
Confident
Comment:
There are enough indications from a variety of diverse parts of the world economy for us to be pretty sure that a slow down is on. But it is not the same as 2007-8: it originates in the real economy not in financial markets. A recession can probably be avoided with prompt policy action. But that is difficult. There is little scope for monetary policy as QE is not appropriate for a real economy recession, policy rates are close to the floor and forward guidance does not seem very powerful. And politics makes the best policy response, a fiscal expansion difficult. So there is a real danger that a lack of a proper policy response will allow a slowdown to become something worse.

Deal or no deal: The Greece standoff

=======================================

Question 3: Do you agree that implementation of the agreement will lead to an expected decrease in Greek debt repayments?

=======================================

Answer:
Strongly Agree
Confidence level:
Extremely confident
Comment:
Greek debt repayments have to fall. Taking the deal just means this is more likely to occur through some sort of debt write-off than through default. The Greek economy urgently needs serious supply-side reforms. The Troika should have insisted on this and offered a halt to austerity in return. They didn't; but it is not too late to do so now.

=======================================

Question 2: Do you agree that Greece would be better off defaulting right now rather than signing to the agreement under consideration?

=======================================

Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
There are no good choices for Greece. Taking the deal implies continued miserable austerity and a difficult political environment that makes meaningful reform unlikely. But walking away looks much worse. Removal of ECB support from commercial banks will further undermine the flow of credit leading to further misery in the short-medium terms. Looking further ahead, I don't see much prospect of export-led growth or public sector-led growth outside the Euro

Pages