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

Voting history

Transparency and the Effectiveness of Monetary Policy following the Warsh Review at the Bank of England

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Question 1: Do you agree that the simultaneous release of the policy decision, the enhanced minutes (including the voting record) of the MPC meeting and (in the relevant months) the release of the Inflation Report will facilitate inference on the likely stance of monetary policy?
 
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Answer:
Disagree
Confidence level:
Very confident
Comment:
A compact statement accompanying the announcement to include the vote makes a great deal of sense as I have argued for a number of years. But there is merit in having enhanced minutes published with a short lag so that aspects of the risks facing monetary policymakers can be digested in between meetings. The Inflation Report, as a full blown forecast, can also be thought of as an exercise worthy of scrutiny, per se, and also an opportunity to consider longer term factors in the policy decisions.

Greece’s elections and the future of the Eurozone

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Question 2: Do you agree that refusal of the core EU countries to a renegotiation of the Greek bailout agreements would carry serious risks for the economic well-being of the Eurozone?

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Answer:
Disagree
Confidence level:
Very confident
Comment:
I suspect that unwinding agreements may run more of a risk in unwinding the Euro Area than allowing re-negotiation. The urgent need is for the ECB to work out how to implement a credible QE programme that will support EZ bond prices and perhaps engineer a further depreciation in the Euro. The re-opening of the the Greek settlement and with it a signal for other agreements to be revamped would threaten an early agreement on Euro Wide unconventional policy.

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Question 1: Do you agree that a Syriza victory on 25 January would lead to a significant or sustained escalation in spreads for other peripheral Eurozone countries?

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Answer:
Agree
Confidence level:
Very confident
Comment:
A Syriza victory would not only open up wounds between Greece and the Troika that have barely healed from the default of 2012. But also trigger question-marks over the continuation of the Greek membership of the Euro Area and by association the EU. This will lead to a harder examination of the spreads (aka default risks) for other peripheral countries, as well as for Italy. Some form of QE may act to offset the momentum for an escalation in spreads but it will have to be large, clear and actionable.

2014 Autumn Statement

 

Question 2: Do you agree that the underperformance of tax receipts in recent years, provides a strong case for higher taxes?

Answer:
Agree
Confidence level:
Confident
Comment:
Continued underperformance in tax receipts will mean that either public debt levels will not adjust down especially quickly to pre-crisis norms of 40% to GDP or less and/or tax rates will have to rise. Each of VAT, Income Tax, Corporate Taxes and Council Taxes may need reform and rehabilitation to meet these challenge.

Question 1: Do you agree that the scale of this planned reduction in total managed expenditure is credible?

Answer:
Disagree
Confidence level:
Confident
Comment:
Although there was a similar fall in the ratio of total managed government expenditure in the second half of the 1980s it was driven by a fairly sustained economic boom. Highly accommodative interest rates may stoke extra demand but we need significantly higher growth in productivity if we are to get anything like this scale of adjustment in managed government expenditure.

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