Michael McMahon's picture
Affiliation: 
University of Oxford
Credentials: 
Professor of Economics

Voting history

Labour Markets and Monetary Policy

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Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?

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Answer:
Strongly Agree
Confidence level:
Confident
Comment:
I am normally quite hawkish in taking steps against inflation. However, I believe that today there are reasons for waiting. First, the labour market data has, in recent years, suggested building inflationary pressures that turned out to be false dawns. Second, there remains huge economic uncertainty going forward in the UK. Finally, given the erosion of real wages in the aftermath of the financial crisis (still 5% below 2008 levels in recently-released data) and the fact that real wages have not grown for 2 years (April 2018 ONS release), I believe that the costs of falling behind the curve are not huge.

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Question 1: Do you agree that a strong labour market is a good indicator of building inflationary pressure?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
I see merit in the arguments for why the Philips curve is hiding. With that in mind, at a time of a weakened relationship, then the extent of the pass through from labour market strength to future inflation will be reduced and with it the quality of indicator that labour market variables play in forecasting inflation.

Bitcoin and the City

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Question 2: Do you agree that the regulatory oversight of cryptocurrencies needs to be increased?

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Answer:
Agree
Confidence level:
Confident

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Question 1: Do you agree that cryptocurrencies are currently a threat to the stability of the financial system, or can be expected to become a threat in the next couple of years?

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Answer:
Disagree
Confidence level:
Confident
Comment:
I think it is still too small and lacking in widespread ownership, especially among large investment groups, to be a serious risk to the overall financial system.

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:
Agree
Confidence level:
Confident

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