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

Voting history

Wages and economic recoveries

====================================================================

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?

====================================================================

Answer:
Agree
Confidence level:
Not confident

====================================================================

Question 1: Do you agree that lower real wage growth was beneficial for employment levels during the Great Recession?

====================================================================

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
The consequences of low real wage growth depends on the particular situation of the country. In some crisis countries within the eurozone, unit labor costs had become unsustainably high. A real devaluation had to be undertaken and in absence of the possibility to devalue the currency low wage growth is a painful necessity. In other countries, its more the wage profile that has been the problem. Low wage growth for categories of workers who have difficulty finding jobs has been good, for example in Germany. However, higher aggregate wage growth would possibly have been good for Germany and certainly good for weaker countries in the union. Currently, in Sweden, low negotiated wage increases make it difficult for the central bank to receive its inflation target.

Happiness and well-being as objectives of macro policy

====================================================================

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

 
====================================================================
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

====================================================================

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.

====================================================================

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.

====================================================================

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?

====================================================================

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.

Pages