Jonathan Portes's picture
Affiliation: 
National Institute of Economic and Social Research
Credentials: 
Director

Voting history

Economic Consequences of an Independent Scotland June 2014

Question 1

Do you agree that that Scotland would better off in economic terms as an independent country?

Answer:
Disagree
Confidence level:
Confident
Comment:
An independent Scotland, if economic policy were broadly sensible, would probably be slightly worse off than as part of the UK; if both lucky and well managed, it might be slightly better off. However, the downside risks (both exogeneous and arising from the quality of policy making) are quite large.

Euro Area Deflation and Risk for UK Economy May 2014

Question 2

Do you agree that a deflation in the Euro area (as defined in Question 1) would pose a considerable risk to the UK recovery?

Answer:
Disagree
Confidence level:
Confident
Comment:
The direct impact of continued economic stagnation in the eurozone will clearly be negative, but no more so than over the past 3 years, and despite that recovery is now established. If deflation led in turn to serious economic and political instability in the eurozone, that might be different, but that seems unlikely (albeit not impossible) in the short term.

Question 1

Do you agree that there is a significant risk of a sustained deflation across the Euro Area in the coming two years?

Answer:
Agree
Confidence level:
Not confident
Comment:
Although in some models deflation is a threshold: that is -0.1% inflation has a very different impact on other macro variables than 0.1% - I think that in practice this is highly implausible. In my view inflation from 0 to 0.5% is not that different from deflation in its impact and consequences, and we are already there. So while I do not think the probability of negative inflation is much above 25%, nor am I confident in my CPI forecast, I think for practical purposes we are already there, or almost.

Prospects for Economic Growth in the UK April 2014

Question 2

Do you agree that, in the wake of the financial crisis, any downward adjustment to the expected average annual long-term growth rate of the UK economy is likely to be by less than 0.25 percentage points?

Answer:
Agree
Confidence level:
Confident
Comment:
Predicting future technological progress is impossible. But I don't see why it should have slowed. If financial sector dysfunction reduces growth that represents a policy failure more than a reduction in underlying potential.

Question 1

The long period of slow or negative growth might imply that there is a substantial output gap in the UK economy.  Do you agree that there is currently a larger output gap than the OBR estimate to the extent that the shortfall in output relative to capacity is 3% or greater?  

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
Unemployment remains high relative to the sustained period of high employment b rates in the 2000s and there is little/no sign of unsustainable wage growth

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