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

Voting history

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

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Question 1: Do you agree that the economics profession needs an institutional change that promotes the ability to communicate more effectively with policy-makers and the public at large and to make clear when economists have a united view; and do you agree that we need to introduce leadership to help achieve this improvement through coordinated efforts?

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Answer:
Disagree
Confidence level:
Confident
Comment:
RES can certainly help economists communicate more effectively and it already does so. IT also supports a wide range of engagement activities. Perhaps it could go further forexample hosting a blog or a Vox style website that encourages communication and debate. But RES cannot really participate in the debate in its own right given its remit. In fact, I find it hard to think that a single institution could represent "economists" given the wide set of beliefs and opinions amongst us.

Brexit: the potential of a financial catastrophe and long-term consequences for the UK financial sector

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Question 2: What is the probability that the UK experiences such a significant disruption to financial markets and asset prices following a vote for Brexit on 23 June?

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Answer:
11-30%
Confidence level:
Confident
Comment:
Financial markets will anticipate the outcome of any negotiations between the EU and the UK should Brexit be the outcome in the referendum. In the short run, the sterling will most likely lose some value. In the median term, inflows of foreign capital will probably diminish and house prices - especially in London - could suffer. But thereafter a lot will depend on the outcome of the UK-EU negotiations and on UK policies. Both of these are to a large extent unknown so it is hard to make guesses apart from the fact that the uncertainty that will follow will be harmful.

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Question 1: Do you agree that there would be substantial negative long-term consequences for the UK financial sector if the UK were to leave the EU?

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Answer:
Strongly agree
Confidence level:
Very confident
Comment:
The UK financial sector currently thrives due to agglomeration effects, vast supply of human capital, easy access to the European market, and an attractive regulatory framework. But as such, Frankfurt probably seems a more natural financial centre given the location of the ECB. Should the UK choose to leave the EU I think there is little doubt that passporting rights will worsen which will most likely set in motion a process of relocation of many firms in the UK financial to Frankfurt. This might happen slowly if passporting rights remain almost untouched but could also happen quickly.

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:
Neither agree nor disagreee
Confidence level:
Confident
Comment:
I think the issue is really that fiscal, monetary and macro pru policies need to be coordinated. There are situations - such as the current - where one set of instruments may become ineffective but we know that in these circumstances there will be other instrument that can emulate their effects which are still available. For example, fiscal devaluations can still be used as an instrument when the ZLB is binding for the short term nominal interest rate. Moreover, unconventional policies may be available but they do of of course have direct fiscal consequences and also impact on issues of direct importance for financial stability. So, I think the real issue is to formulate a framework that ensures consistency between different goals and coordination between different policy makers. Of course, in "normal times" these issues are rather straightforward so this really has to do with planning for abnormal circumstances.

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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:
Confident
Comment:
Under normal conditions, monetary policy should be aimed at addressing the inefficiencies that arise due to the existence of nominal rigidities of various sorts. Conventional policies should be the appropriate tools for this purpose. Using also unconventional policies would be a return to the fine-tuning policies of the past which was no big success to put it mildly. Moreover, it would make central bank communication very challenging and most likely be costly in terms of reputation. The one complication that I am not sure about is that there will be implications for monetary AND fiscal policy of the introduction of macro prudential policies. Exactly how this will play out is unclear to me but I can't see a clear reason for why it should pave the way for the use of unconventional policies in normal times.

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