John Hassler's picture
Affiliation: 
Institute for International Economic Studies (IIES), Stockholm University
Credentials: 
Professor of Economics

Voting history

Global risks from rising debt and asset prices

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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:
Agree
Confidence level:
Confident
Comment:
For three decades, real save interest rates have fallen globally. The total fall is in the order of 4-percentage points and the negative trend has nothing to do with monetary policy. Lower real rates necessarily leads to higher equilibrium asset prices and larger balance sheets. Furthermore, lower real rates leads to a higher sensitivity of net worth to variations in the factors that drive fundamental asset values. Most likely this leads to higher aggregate risk. The driving force behind this is largely beyond the control of governments and central banks. What needs to be done, however, is to better allocate the risks that a low interest rate society brings with it. In many countries, young households have to bear a to large risk because of ill-functioning housing markets and underdeveloped markets for risk sharing.

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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:
Neither agree nor disagree
Confidence level:
Confident
Comment:
The major factor behind the rise in asset values and leverage is the long trend towards lower real interest rates. This trend has nothing to do with monetary policy. In the shorter run, however, central banks do affect real rates which recently has come on top of the trend.

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:
Agree
Confidence level:
Confident
Comment:
Clearly the value to a particular member depends on the alternative. A country like Sweden with good monetary institutions currently have fairly little to gain, which is correctly reflected in the strong popular support for remaining outside.

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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:
Extremely confident
Comment:
The Union should be based on the princip that a package of compulsory rules for all members apply only to areas were this is clearly necessary. An example would be that voting power in EU institutions requires that democratic principles and freedom of the press is respected in each memberstate. However, this does not apply to the case of a singel currency. Forcing convergence in this way onto members that do not want it is going to make the union dangerously unstable.

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:
Agree
Confidence level:
Not confident

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