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

Voting history

Wages and economic recoveries

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

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Answer:
Agree
Confidence level:
Very confident
Comment:
In the UK, it seems clear that low real wage growth helped support employment in the downturn, and helped boost employment growth in the subsequent period. This was not entirely benign: to the extent low real wage growth was driven by increases in the insecurity and precarity of employment, this may have resulted in an overall reduction in the quality of employment for many. However, to the extent that low real wage growth was the result of persistently weak productivity (driven by other factors), it is arguably preferable that the inevitable pain that resulted should be shared rather than concentrated on the unemployed. In other countries, this is less clear; for example in Greece, lower wages probably were not only the result of low aggregate demand, but further lowered demand, so negating any beneficial impacts on overall employment.

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:
Disagree
Confidence level:
Confident
Comment:
The traditional frame is increasingly irrelevant. Higher inflation has not been a problem - quite the opposite - in advanced economies for most of the last decade. That doesn't mean it won't be in future but the relationship between independence/politicisation and economic outcomes will be much more complex

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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.

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