Jagjit Chadha's picture
Affiliation: 
National Institute of Economic and Social Research
Credentials: 
Professor of economics

Voting history

Global risks from rising debt and asset prices

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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?

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Answer:
Agree
Confidence level:
Very confident
Comment:
Ultra low rates was adopted as a temporary response to the financial crisis shock but has become a long-lived regime in its own right that has played a significant role in driving up asset and house prices globally.

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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?

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Answer:
Strongly agree
Confidence level:
Confident
Comment:
In most advanced economies, public and private debt levels are at historic peacetime highs relative to income and therefore represent fundamental risk because adjustment to less elevated levels simply may not be orderly.

Juncker's State of the Union Address

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Question 2: Do you agree that the euro has had more benefits than costs?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
There have been costs and benefits at the national and industry level but who can aggregate to give me the overall balance?

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Question 1; Do you agree that euro membership should be compulsory for all EU member states?

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Answer:
Strongly disagree
Confidence level:
Confident
Comment:
It is simply not the case that all members of a free trade area should necessarily have the same currency. That they nearly all do have the same currency does not mean that we need to amplify the error. The single currency project has diverted scarce resources away from structural reform. The ECB has done very well given the initial conditions but the system still looks vulnerable.

Wages and economic recoveries

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Question 2: Do you agree that the different behaviour of UK real wages relative to Eurozone wages during the Great Recession is in large part due to the UK having different labour market policies?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
Whilst it is reasonably clear we have different and arguably more flexible labour markets in the UK than in many Euro Area countries, it cannot be the whole story in explaining the response of real wages in the UK. That firms may have hoarded labour and lowered the capital-output ratio would seem to me, from the labour demand side, an equally important question. The capital-labour mix chosen by firms may have been distorted by a vulnerable financial sector constrained by new regulations but also the operation of monetary and fiscal policies that may not have encouraged investment.

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