Jagjit Chadha's picture
Affiliation: 
National Institute of Economic and Social Research
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:
The recoveries in the Anglo-Saxon economies continue to look rather robust. Given expectations of higher policy rates in the Anglo-Saxon world, the emerging economies will have to continue to deal with capital outflows and some will respond with better fiscal and financial structures, others perhaps not - so it will not be universally bad news. Parts of the Euro Area continue to suffer but that is not news this year. The fall in oil prices represents good news for consumers of oil and bad news for producers and traditionally this was thought either to be at least neutral globally or, more likely, positive given higher propensities to consume in advanced countries. So whilst the outlook may not be great it does not seem palpably worse.

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:
Confident
Comment:
Whilst I am in favour of thinking about how to underpin the credibility of fiscal policy, I am not quite sure that this Charter succeeds. It is specified in terms of a surplus on public sector net borrowing without being clear on the exact magnitude nor on some notion of what a sensible long public debt to GDP ratio might be and what factors determine that ratio. I wonder also to what extent this signals a change in deficit policy or just reveals that basic approach to finances that HMT uses, as my guess is that this is the kind of approach that has always been followed.

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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:
Agree
Confidence level:
Very confident
Comment:
The economy is expected to grow in line with trend nominal income and as the financial crisis ebbs into history, it is quite proper to aim for a primary surplus and cash surplus as soon as practicable, Obviously the targets can be changed if there are any negative shocks but I see little scope for a discretionary loosening of fiscal policy.

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:
Confident
Comment:
A slowdown in Chinese growth will tend to reduce scope for UK exports to China but also may reduce pressure on scare commodities – so net-net I am not sure there will be a great effect one way or other.

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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
Comment:
Like Japan before it and other rapidly growing countries, because as countries approach the efficiency frontier it just gets harder to squeeze out higher levels of growth. In any case, significant institutional reform, especially of the financial sector is going to be required for the growth to be sustained and even then growth will stall.

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