John Driffill's picture
Affiliation: 
Birkbeck College, University of London
Credentials: 
Professor of economics

Voting history

The Importance of Elections for UK Economic Activity

Question 2: Do you agree that the outcome of the general election will have non-trivial consequences for aggregate economic activity (employment and GDP)?

Answer:
Agree
Confidence level:
Confident
Comment:
There is a range of possible outcomes, each of which would be associated with different levels of activity, and, perhaps more importantly, different policies regarding the level of public spending and taxation, the amount of redistribution, Britain's continued membership of the EU. If, as seems likely, the two largest parties get a small share of the vote, say 30 percent each, and the smaller parties get the rest and win a reasonable number seats, the outcome may be a weak and fractious coalition. If UKIP and conservatives do well, that may increase the prospects of Britain leaving the EU in the coming years, which would have a negative effect on GDP, as well as being damaging to the UK socially and politically.

Question 1: Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?

Answer:
Disagree
Confidence level:
Confident
Comment:
As compared with what? Spending and tax plans that made no effort to control the national debt might have been worse, but plans that were slightly less austere might have been slightly better, in terms of stimulating more employment and GDP over the last few years. The coalition policies have convinced the financial markets that the public debt would be sustainable, and the government's borrowing costs have fallen to very low levels. The markets might have found less austere policies equally credible.

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

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Question 2: Do you agree that the Bank's proposal to release the policy decision, MPC minutes and (once a quarter) the Inflation Report all at the same time justifies a change in the structure of MPC meetings from two consecutive days to a process in which in the MPC meetings are spread out over seven days?
 
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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
It is difficult to get excited about these changes They seem minor. it is clear they need to spread the meetings out over a longer period to write up minutes in time for release with the announcement. They will produce frresher minutes of staler discussions. The benefits are not obvious. The financial markets may like these changes, believing they will make more money with the additional information. The public in general and the 'real economy' will notice no difference.
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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:
Agree
Confidence level:
Confident
Comment:
it will, as the question asks 'facilitate inference', perhaps slightly better than the current arrangements do. But it does not seem to be a radical improvement.

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:
Agree
Confidence level:
Not confident
Comment:
Refusal to renegotiate may endanger the survival of the Euro zone in its present form, as it may lead to a Greek exit and maybe more exits in coming months and years. Current Euro zone member states that stay with the Euro will be only a little worse off, if at all. Leavers may suffer disruption -- even chaos -- for a while, but prosper in the longer run. But there seems to be a strong desire to keep the Euro zone intact, on the part of Draghi, Merkel, and others. So I would expect them to fight off calls for renegotiation as long as possible, but eventually find some way of lowering the burden. The more vigorously the ECB can carry out QE, the quicker Euro zone inflation can be raised to 2% and preferably more, the better the chance that inflation and real growth will nibble away at public debt and lessen these problems.

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