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

Voting history

Happiness and well-being as objectives of macro policy

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Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?

 
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Answer:
Agree
Confidence level:
Not confident
Comment:
I do think that measures of happiness derived from surveys contain useful information for researchers as well as policy makers. Therefore, they should be used in policy evaluation and other empirical analyses. Measures of happiness and well being are, however, likely to satisfy Goodhart's law, namely that if they become the target of policy they cease to be a good measure of welfare. This speaks in favor of using different measures of welfare, including also GDP and the distribution of income.

The Future of Central Bank Independence

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Question 3: More generally, do you agree that it is desirable to maintain central bank independence? Again focus on the near future, say next 48 months.

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Answer:
Strongly agree
Confidence level:
Very confident
Comment:
But it is necessary to more clearly specify the mandates of the central banks. It needs to be clarified that the broad measures with substantial fiscal components used during the great recession cannot permanently be in the hands of an independent central bank.

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Question 2: Do you agree that the traditional argument that less central bank independence leads to higher inflation will (still) be relevant over the next 48 months in Western economies?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
The fundamental reason for central bank independence, namely that politicians have a hard time not to fall for the temptation to stimulate the economy too much, has not changed. However, in many countries, too much inflation is unlikely to be a concern within the coming 48 months. In Europe, the problem is the opposite. In the U.S., the situation is different and inflation expectations may start to rise if president Trump attempts and succeeds in pushing monetary policy in a too expansionary direction.

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Question 1: Do you agree that central bank independence in the Eurozone and the UK will decline over the next 48 months?

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Answer:
Disagree
Confidence level:
Confident
Comment:
I general, central bank policy must return to only setting short policy rates in order not to risk its independence. This is likely to happen in many OECD countries including the U.S. as the economy recovers. The recovery and thus the return to standard monetary policy is slower in the euro-zone. However, the lack of a central decisive government in the euro-zone implies a smaller medium-run risk of less ECB independence.

German Council of Economic Experts' view of ECB policy

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Question 2: Do you agree that the ECB's monetary policy masks structural problems of member states?

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Answer:
Agree
Confidence level:
Confident

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