Michael Wickens's picture
Affiliation: 
Cardiff Business School & University of York
Credentials: 
Professor of economics

Voting history

The future role of (un)conventional unconventional monetary policy

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Question 2:  Do you agree that central banks should operationalise the use of these alternative tools of unconventional monetary policy for use either in the near term, or in the future, as economic conditions warrant?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Given their ineffectiveness, there is no good case to use UMP at any time.

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Question 1: Do you agree that central banks should continue to use the unconventional tools of monetary policy deployed in response to the global financial crisis as part of monetary policy under normal economic conditions?

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Answer:
Disagree
Confidence level:
Very confident
Comment:
Even in the current abnormal conditions, uncoventional monetary policy has proved ineffective in stimulating private credit expansion. There is no reason to expect they would be more effective in normal times when in theory they would be unnecessary. To make matters worse UMP has distorted asset prices causing considerable asset market rebalancing and volatility. Although there is no good case for UMP, there is a good argument for using the new non-monetary tools to achieve financial stability, especially to prevent insolvency and banking excesses.

National Living Wage and the UK economy

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Question 2: Do you agree that the new NLW will have a muted effect on wages and prices?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Higher labour costs where there are no improvements in productivity will lead to price increases. If these are followed by pressure for higher wages, a wage-price spiral could ensue and lead to a higher level of inflation.

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Question 1: Do you agree that the new National Living Wage is likely to lead to significantly lower employment?

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Answer:
Agree
Confidence level:
Very confident
Comment:
Employment is likely to fall in the short term but not the long term. If wages are raised without an accompanying rise in productivity labour becomes more expensive and jobs lost. The short term effects are likely to be felt most in the low productivity and low skill jobs. These higher labour costs are likely to be passed on in higher prices which could return average real wages to near their former level. If wages are then raised starting a wage-price spiral the upshot would be a higher rate of inflation. A lower real wage together with capital labour substitution that raises labour productivity could restore employment in the longer term.

Brexit and financial market volatility

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Question 2: Do you agree that the possibility of Brexit significantly increases uncertainty and volatility in financial markets and the economy in general?

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Answer:
Agree
Confidence level:
Very confident
Comment:
But only in the short to medium term until the uncertainty is resolved

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