Jonathan Portes's picture
Affiliation: 
KIng's College, London
Credentials: 
Professor of Econoics and Public Policy

Voting history

The Future of Central Bank Independence

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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:
Agree
Confidence level:
Not confident
Comment:
Almost by definition this question asks for a political forecast more than an economic one; and the answer in turn depends primarily on political events. In the UK, decisions on monetary policy will inevitably be seen through the prism of the highly politicised Brexit debate so although the underlying framework is robust some degree of increased politicisation seems probable.

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:
Strongly disagree
Confidence level:
Extremely confident
Comment:
The proposition is at best meaningless. Of course reforms are needed; excessively tight policy (monetary and fiscal) makes reforms harder, both politically (as it weakens popular support for sensible economic policies) and economically (since it is less likely that the supply side will respond well if demand is weak. Labour market reform in France - long overdue - is a case in point.

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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:
Strongly disagree
Confidence level:
Extremely confident
Comment:
The proposition is self-evidently absurd, given the euro area's extremely weak growth since the crisis and persistently high levels of unemployment Of course the euro area (at the individual country level, and collectively) has significant structural/supply side problems. Addressing those problems will be made harder, not easier, by lower demand and/or tighter monetary or fiscal policy. On the contrary what the euro area needs is continued accommodative monetary policy combined with fiscal stimulus in a number of countries: this will help facilitate supply side improvements.

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:
Extremely confident
Comment:
There is no economic or intellectual case for asymmetric adjustment. Countries with (current account and fiscal) surpluses need to adjust too. It's true fiscal policy alone may hae limited impact but it won't have zero impact and will still help. Moreover the refugee influx, in particular, is a cast-iron case for spending more on "investment" now (especially in language training and labour market integration) given the potentially huge longterm economic and social benefits (and the costs of failing to do so)

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Question 1: Do you agree that German current account surpluses are a threat to the Eurozone economy?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
No one is arguing that Germany does not produce high quality goods which the rest of the world wants to buy. And there are demographic reasons why some surplus makes sense. But the current level of the surplus imies capital outflows which are simply too high; at some point they will be reversed and the adjustment may well be painful. This is not just an intra-euro zone issue

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