Per Krusell's picture
Affiliation: 
Stockholm University
Credentials: 
Professor of Economics

Voting history

Happiness and well-being as objectives of macro policy

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Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?

 
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Answer:
Disagree
Confidence level:
Very confident
Comment:
For the reasons I gave in the response to the previous question, my answer here is that happiness measures should not be used (yet). The fact that "unhappiness following unemployment persists into the next employment spell" can be rationalized using other observables, e.g., wage changes or wealth changes. I do believe that unemployment is a big problem in our societies and can cause depression, suicide, etc. but then I would favor direct measures of these phenomena.

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Question 1: Do you agree that subjective well-being measures, or at least some of the subindices from the typical survey measures, are now reliable enough to give useful insights when used in macroeconomic empirical analysis?

 
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Answer:
Disagree
Confidence level:
Very confident
Comment:
I mostly think we should base policy analysis on revealed-preference arguments, which means we should look at observable economic behavior. My view on this can be changed as more research is produced but it is too early to switch to direct survey-based measures.

The Future of Central Bank Independence

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Question 3: More generally, do you agree that it is desirable to maintain central bank independence? Again focus on the near future, say next 48 months.

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Answer:
Strongly agree
Confidence level:
Very confident
Comment:
Restricting the time frame to 48 months doesn't make a lot of sense - these choices are institutional and hence long-run in nature. From a longer-run perspective, independence still seems beneficial.

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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:
Not confident
Comment:
The difference is unlikely to be small, given that the central banks have shown limited ability to affect inflation in the current low-interest rate regime. If the economies exit this regime within the given time frame I would be more inclined to agree.

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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:
Not confident
Comment:
politics is very difficult to predict over the next year or so but I don't think central bank independence will decline so soon

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