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

Voting history

The Future of Central Bank Independence

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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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Question 1: Do you agree that exceptionally loose monetary policy by the European Central Bank is no longer appropriate?

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Answer:
Disagree
Confidence level:
Confident

German current account surpluses

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Question 2: Do you agree that the German government should increase public spending given its persistently large current account surplus and given that it is part of the Eurozone?

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Answer:
Agree
Confidence level:
Confident

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