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

Voting history

German Council of Economic Experts' view of ECB policy

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Question 2: Do you agree that the ECB's monetary policy masks structural problems of member states?

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Answer:
Agree
Confidence level:
Confident
Comment:
In the absence of the current loose monetary stance, the euro-area economy would be considerably weaker and one of the major causes of this underlying weakness are structural problems that warrant attention in the form of structural policy reforms. So it is true that ECB monetary policy is partly off-setting structural problems. However, as I said above, the fact that structural reforms are needed is not, in my view, a reason for the ECB to ignore it's primary objective.

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Question 1: Do you agree that exceptionally loose monetary policy by the European Central Bank is no longer appropriate?

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Answer:
Strongly disagree
Confidence level:
Very confident
Comment:
The appropriateness of ECB monetary policy must be judged by whether or not it is likely to contribute to the achievement of the central bank's objectives. These objectives are clearly laid out in Article 127(1) of the Treaty on the Functioning of the European Union. Price stability is the over-riding objective and only subject to achieving that should the ECB look to support the other objectives of the EU. In the absence of the current loose monetary policy, the risks of a prolonged deflation would be even greater and hence the ECB is right to maintain that monetary stance. That structural reforms are necessary is also right, but it is not the role of the ECB to suffocate euro-area economies, jeopardising price stability, in order to create incentives for the governments to reform.

Are academic economists ‘in touch’ with voters and politicians?

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Question 5: Voters think that the preferences of economists do not align with their own preferences. (This includes the possibility that they thought that the predicted negative economic consequences would not affect them personally).

Do you agree this was an important reason for a majority of UK voters going against the near unanimous advice of the economics profession?

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Answer:
Strongly agree
Confidence level:
Very confident

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Question 6: Economists did not explain the reasons for this consensus in sufficiently clear language.

Do you agree this was an important reason for a majority of UK voters going against the near unanimous advice of the economics profession?

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Answer:
Agree
Confidence level:
Confident

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Question 7: Voters did not know that there was near-unanimity among economists.

Do you agree that this was an important reason for a majority of UK voters going against the near unanimous advice of the economics profession?

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Answer:
Agree
Confidence level:
Confident

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