Morten Ravn's picture
Affiliation: 
University College London
Credentials: 
Professor of economics
Head of Department

Voting history

A “new” UK industrial strategy ?

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Question 2: Do you agree that the UK needs a new regional policy?

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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
It is clear that there are huge regional disparities in the UK with London and the South East outperforming other regions. It is less clear that such disparities can be addressed in the most efficient manner by regional policies. I would suggest again that investment in education and in infrastructure may be more effective.

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Question 1: Do you agree that the UK needs a new industrial policy?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Britain's problem is low productivity and it has been so for decades. Brexit will probably make this even worse given that there is a risk of comparative advantage in financial services and given the possibility of loss of access to the internal market. To address low productivity, Britain should invest in education, infrastructure and in efficient regulation and institutions. It is hard to believe that policy makers are in a strong position to apply an efficient industrial policy free of concerns about voters and current financial interests and given how strongly parties with vested interests will try to impact on the policies.

The Future of Central Bank Independence

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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:
Neither agree nor disagree
Confidence level:
Confident
Comment:
If I am right above, we won't see much change so it will be impossible to answer the question. But I believe the traditional argument about the relationship between central bank independence and inflation. There might be counter examples to this, but they are counter examples in my opinion.

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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:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
Carney has been under a lot of pressure in the UK but has withstood the fire quite well and I think it would be difficult for UK policy makers to intervene directly or change the charter of the Bank of England. Such intervention would be associated with substantial loss of credibility. But, on the other hand, the circumvention of the fiscal rules in the UK did not get much press and is ignored by both economists and the press. So perhaps I overestimate credibility losses. The situation for the ECB is less clear although I think it is unlikely that there will be direct political intervention in the ECB's business. But, who knows? It is very hard to make forecasts especially about the future (Niels Bohr). Things are very uncertain at the moment. We don't know how Brexit will play out, what will happen in the US, and the fate of major European economies such as Italy and France. So, I would not totally eliminate the possibility that changes are coming but I think it is unlikely given the political costs from doing so.

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:
Very confident
Comment:
I agree on this. There are clear needs for structural policies to address the disappointing state of many economies where high levels of youth unemployment has effectively sacrificed a generation since the financial crisis, where inequality is high, and where wage and price adjustments are very sluggish. Loose monetary policy cannot substitute for reforms.

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