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

Voting history

Market Turbulence and Growth Prospects

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

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Answer:
Disagree
Confidence level:
Confident
Comment:
Disagree in the sense that prospects might have deteriorated but not "seriously"

Autumn Statement & Charter for Budgetary Responsibility

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Question 2: Do you agree that the Charter for Budgetary Responsibility is helpful in underpinning the credibility of fiscal policy?

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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
I am sceptical about how useful a "rule" in terms of "unrevised" data will be. Indeed, at the height of the crisis, we were talking about a double-dip and even a triple-dip recession. A triple-dip never occurred whereas a double-dip one was revised away.

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Question 1: The Chancellor forecasts a cyclically adjusted fiscal surplus by 2017-18 and in cash terms by 2019-20. Do you agree that this planned path of fiscal consolidation is appropriate?

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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
The Chancellor has not considered the possibility of a Brexit which might worsen the fiscal and economic outlook. If the British electorate vote in favour of Brexit, we will witness huge investor uncertainty and as a result, a (much) higher rate of return investors demand to be compensated for the greater risk they are willing to take in order to hold UK debt. This higher yield will add to the cost of borrowing that companies face and will delay their investment decisions. All these will worsen the fiscal and economic outlook in the short- to medium term. Perhaps we should sort these issues out before making forecasts for...2019-20.

China’s growth slowdown: likely persistence and effects

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Question 2:

Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).

Answer:
Strongly Agree
Confidence level:
Confident
Comment:
This is indeed possible. China’s growth does not have a big direct impact on our economic prospects. Indeed, ONS data show that, in 2014, UK exports to China accounted only for 4.8% of total exports. However, there are significant indirect effects which should not be underestimated. Indeed, according to the IMF (http://blog-imfdirect.imf.org/2014/03/26/china-size-matters/), China’s share of global GDP increased from 2% in 1995 to 15% in 2013 (the US still accounts for 19% of global GDP).

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Question 1:

Do you agree that the Chinese economy is likely (say more than 50% probability) to maintain in the medium term (say, for at least ten years) a rate of annual growth exceeding 6%.

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Answer:
Disagree
Confidence level:
Confident

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