Martin Ellison's picture
Affiliation: 
University of Oxford
Credentials: 
Professor of economics

Voting history

House Prices and the UK economy

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Question 2: Do you agree that a more widespread weakening of the UK housing market will slow UK GDP growth significantly?

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Answer:
Disagree
Confidence level:
Confident
Comment:
There’s some evidence in the Nationwide house price data that GDP growth leads house price growth in the UK (rather than vice versa) so in aggregate there’s no particular reason to believe that house price falls cause UK growth to falter.

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Question 1: Do you agree that the phenomenon of declining house prices will ripple out from the London property market leading more UK regions to experience falling prices?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Historically there’s not much evidence that house price developments in London lead those in the rest of the country. Calculations with quarterly Nationwide data from 1973-2017 show that house prices in the regions are slightly at predicting future London house prices than London prices are at predicting future house prices in the regions. The elephant in the room is Brexit and whether London is first in the queue to feel the effects, although the -5.1% fall in London house prices seen in the immediate aftermath of Black Wednesday 1992Q4 failed to ripple out in any meaningful way.

Global risks from rising debt and asset prices

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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Whilst loose monetary policy has contributed to increased leverage and asset prices, if there are problems here then it is up to macroprudential policy to sort it out. I've never been very convinced with the "too low for too long" argument - we need to use macroprudential policy to build a stable financial architecture that doesn't explode or implode whenever the markets think monetary policy is off kilter. It's time for macropru to step up to the plate.

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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?

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Answer:
Agree
Confidence level:
Confident

Juncker's State of the Union Address

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Question 2: Do you agree that the euro has had more benefits than costs?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
The European Union as a whole has been a success, especially thinking about the single market. Adopting the Euro has probably contributed a fair bit towards that, although it’s difficult to construct the counterfactual. We economists have certainly learned a lot about the problems of running a monetary union since 1999 though!

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