Ethan Ilzetzki's picture
Affiliation: 
London School of Economics

Voting history

Prospects for Economic Growth in the UK April 2014

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:
Agree
Confidence level:
Not confident
Comment:
The output gap is not an exogenous object. Public policy could potentially affect whether the loss in output is permanent or temporary. My (very casual) conjecture would be that it is still not too late for public policy to prevent the loss of output being permanent. But short of such measures, the loss will eventually be permanent.

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:
Agree
Confidence level:
Not confident
Comment:
I would like to see institutional changes to give less discretion to finance ministries to run deficits. My lack of confidence stems from the fact that I am not sure that a formal rule is the best way to do so. We have seen the limits to the applicability of monetary rules in this recession and a rigid rule might pose problems in unusual circumstances. Fiscal committees might be an alternative way to impose fiscal discipline.

First question:

To help ensure that advanced country governments have sufficient flexibility to respond to future crises, it is important that finance ministries aim for a ratio of public debt to GDP that is substantially less than 60% in normal times.

Answer:
Agree
Confidence level:
Very confident
Comment:
I do not think 60% is a magic number and in fact might be too high for "normal times", but better a target than none.

Pages