Costas Milas's picture
Affiliation: 
University of Liverpool
Credentials: 
Professor of Economics

Voting history

Devolving Income Tax Powers within the UK

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:
Agree
Confidence level:
Confident

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:
Agree
Confidence level:
Confident
Comment:
I think that devolving powers at a regional level will be beneficial for the whole UK economy in at least one dimension: the housing market. Consider the following simplified example: Say that high public spending is set and this needs to be matched by a high (say) property tax. Balancing the regional books here really implies targeting the (regional) housing market since a high property tax will push demand and therefore (regional) house prices down. With this in mind, the Monetary Policy Committee and the Financial Policy Committee should (arguably) be the first one(s) pushing for this.

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:
Agree
Confidence level:
Confident
Comment:
Agree with reference to structural policies. We need to be cautious in terms of how expansionary fiscal policy needs to be as this should be conditional on whether the budget deficit-to-GDP ratio and/or the Debt-to-GDP ratio is sufficiently "low".

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:
I do not see convincing evidence of permanently low growth (secular stagnation); the UK economy, which has bounced back strongly, is a good example. If secular stagnation was an issue then one would arguably expect the admittedly low GDP growth recorded over the past few years to weigh heavily on subsequent growth. To test this, I run a small “experiment”. Using UK data over the last 150 years and controlling for the effects of (a) global financial crises (using the financial crisis indicator from the “correct” spreadsheet of Profs Reinhart and Rogoff), (b) a long UK real interest rate and (c) the UK debt/GDP, I found (via impulse response analysis) that whether the UK economy grows above or below an endogenously estimated “trend rate” of 2.2%, past GDP growth weighs in a similar manner (in terms of impact and duration) on subsequent GDP growth. Loosely speaking, growth persistence is very similar whether we are in a low or high growth regime which (I feel) rejects secular stagnation.

Migration and the UK economy August 2014

Question 2: Do you agree that current government policies with respect to non-EU migration (including policies on students, skilled workers, and family migration) are effective in maximizing the gains to the economy from migration while minimizing any possible negative impact to specific groups?

Answer:
Neither agree nor disagree
Confidence level:
Not confident

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