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

Voting history

Euro Area Deflation and Risk for UK Economy May 2014

Question 2

Do you agree that a deflation in the Euro area (as defined in Question 1) would pose a considerable risk to the UK recovery?

Answer:
Disagree
Confidence level:
Confident
Comment:
In my view, the main international factor driving UK growth remains US growth. The Survey of Professional Forecasters predicts, for the US, GDP growth of 2.8% in 2014 and 3.1% in 2015, whereas headline CPI inflation is predicted to be between 1.8% and 2% in 2014-2015. In this context, I remain confident of a positive impact from the international factor on the UK economy.

Question 1

Do you agree that there is a significant risk of a sustained deflation across the Euro Area in the coming two years?

Answer:
Disagree
Confidence level:
Confident

Prospects for Economic Growth in the UK April 2014

Question 2

Do you agree that, in the wake of the financial crisis, any downward adjustment to the expected average annual long-term growth rate of the UK economy is likely to be by less than 0.25 percentage points?

Answer:
Agree
Confidence level:
Not confident

Question 1

The long period of slow or negative growth might imply that there is a substantial output gap in the UK economy.  Do you agree that there is currently a larger output gap than the OBR estimate to the extent that the shortfall in output relative to capacity is 3% or greater?  

Answer:
Disagree
Confidence level:
Not confident
Comment:
One would hope to get a fairly reliable answer to the question by looking at the historical performance of the UK economy over 1830-2013 (data from the "correct" excel file of Reinhart and Rogoff). To this end, I pool together information from different filters. I proxy the output gap by the median and/or the average of (i) the output gap using a Hodrick-Prescott trend, (ii) the output gap using a cubic trend and (iii) the output gap using the full sample asymmetric Christiano-Fitzgerald (2003) filter. From 1955 onwards, I also include (in the median/mean) the OBR output gap measure. For 2013, the median output gap is estimated at -0.5%; the average output gap is estimated at -4.7%. In my view, this big difference flags the difficulty in answering the question even by digging deep into the history...

Responsible long-term fiscal policy (pilot survey)

Second question:

To help ensure that advanced country governments pursue responsible fiscal policies, countries should adopt formal rules for limiting structural deficits, which are supported by primary legislation or constitutional reform.

Answer:
Strongly Agree
Confidence level:
Very confident

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