Ethan Ilzetzki's picture
Affiliation: 
London School 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:
Not confident
Comment:
I disagree only because of the word "seriously" in the question. Even before the beginning of 2016 there were worrying signs from China, which I expected to be a drag on growth in 2016. Oil was already cheap in 2015 and the supply side factors for this price weakness are a positive rather than a negative. If the wealth losses implied by recent stock market declines turn out to be persistent, this will certainly have negative impact on growth this year, but it is very difficult to ascertain the magnitude at this point.

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:
Disagree
Confidence level:
Confident
Comment:
Did a single European economy the EU's fiscal targets during the crisis? Could anyone have created in advance a fiscal rule that would have been appropriate for the unforeseen circumstances of the recent crisis? The need to sharply adjust discretionary spending to meet arbitrary targets is harmful to both economic activity and the credibility of the fiscal framework. The objective should instead be to create a system of automatic stabilizers that aims to be budget neutral over the cycle and makes large discretionary adjustments unnecessary in both booms and busts.

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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:
Disagree
Confidence level:
Confident
Comment:
It first needs to be noted that while there are significant downside risks for the UK economy, the level of public debt in the UK is not major among them. It has not been a significant risk throughout the crisis. The single-minded focus on naming a date at which the government will be in surplus has no economic rationale. There is no debt sustainability analysis that requires a government to run surpluses, particularly when interest rates are forecast to be low in the forseeable future. A credible plan for fiscal policy is important, but setting a specific numerical target without underlying analysis of the state of the UK economy is futile and may even harm credibility as plans will inevitably adjust to changing circumstances. Appropriate fiscal targets depend, inter alia, on whether one thinks the loss of output in the crisis was permanent, whether we expect to be in a low-interest environment (e.g. secular stagnation) for an extended period, and why we think labour productivity has declined during the crisis. The analysis of the state of the UK economy in the Autumn Statement is primarily political cheerleading for the recovery and does not consider these deeper questions.

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:
Neither agree nor disagree
Confidence level:
Not confident at all

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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:
Not confident at all

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