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

Voting history

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

Responsible long-term fiscal policy (pilot survey)

First question:

To help ensure that advanced country governments have sufficient flexibility to respond to future crises, it is important that finance ministries aim for a ratio of public debt to GDP that is substantially less than 60% in normal times.

Answer:
Agree
Confidence level:
Confident
Comment:
Yes but A) there is no threshold value (60,90, whatever) over which debt is dangerous B) In immediate aftermath of crises (like now) priority should be for fiscal policy to support recovery

Second question:

To help ensure that advanced country governments pursue responsible fiscal policies, countries should adopt formal rules for limiting structural deficits, which are supported by primary legislation or constitutional reform.

Answer:
Strongly Agree
Confidence level:
Confident
Comment:
Whether it is sensible to target the absolute or structural deficit may well depend on the political circumstances - a country with a record of responsible fiscal policy may be in a better position to adopt a more gradual approach.

Pages