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

Voting history

UK House Prices and Macro-Prudential Policy July 2014

===========================

Question 1: Do you agree it is time for more robust policy action to prevent a build-up of excessive housing-related risk?

 

 
Answer:
Neither agree nor disagree
Confidence level:
Very confident
Comment:
House prices are lower than their pre-crisis level in all regions apart from London and the outer metropolitan area. In the latter of these, house prices are now about their pre-crisis level while London prices have risen sharply. Similarly, house prices relative to earnings of first time buyers have dropped in all parts of the UK apart from London. This would seem to indicate that while intervention might be needed for London, a policy intervention that would impact on the rest of the UK is perhaps not called for and could set about unwarranted effects. One way one might design such an intervention is through the taxation of short term capital gains on housing. I also believe that any policy intervention must rely on sound economic analysis of the determinants of house prices and the impact on UK households. Such analysis should form the basis for the analysis of the likely impact of policy interventions.

Economic Consequences of an Independent Scotland June 2014

Question 2

Assuming that Scotland becomes an independent country, do you agree that the UK government's position of ruling out a monetary union is in the economic interests of the continuing UK? 

Answer:
Disagree
Confidence level:
Confident
Comment:
I agree approximately with Carney's stance: A monetary union is feasible under common regulation of the banking sector, and under a possibly strict set of fiscal policy rules. To the extent that this was agreed upon, a monetary union would ex-post seem feasible and beneficial.

Euro Area Deflation and Risk for UK Economy May 2014

Question 2

Do you agree that a deflation in the Euro area (as defined in Question 1) would pose a considerable risk to the UK recovery?

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
As stated above, deflation as such may not be the real problem (but will make the problem worse due to nominal debt contracts). Should europe's problems worsen, it is likely to impact on the UK because of the close trade and financial links.

Prospects for Economic Growth in the UK April 2014

Question 2

Do you agree that, in the wake of the financial crisis, any downward adjustment to the expected average annual long-term growth rate of the UK economy is likely to be by less than 0.25 percentage points?

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
I think there are two issues. The first is related to the financial crisis. The financial crisis and its impact on banking may be impacting negatively on the growth rate both because of misallocation of bank lending across different types of projects / entrepreneurs (towards less risky but also lower return projects) and because of reluctance of banks to lend. But there is a second layer of uncertainty which I pointed towards above which is the extent to which the boom in the 1990's - early 2000's were driven by IT/internet and whether those days are gone now - and, whether there are new drivers of growth coming (such as biotech, nanotech etc.). Thus, I find it hard to make an informed guess on the growth rate in the years to come. there is certainly a need for research into this.

Question 1

The long period of slow or negative growth might imply that there is a substantial output gap in the UK economy.  Do you agree that there is currently a larger output gap than the OBR estimate to the extent that the shortfall in output relative to capacity is 3% or greater?  

Answer:
Agree
Confidence level:
Confident
Comment:
I think we are seeing a deep and long recession due to unusual strong propagation of the shocks to the economy that derived from the financial crisis. I believe that these propagation mechanisms derive from financial and labour markets in combination with the fiscal adjustments. I find it hard to identify key reasons for why there should have permanent decline in the level of output. There might be some uncertainty towards the long run growth rates to the extent that the growth in the 1990's and early 2000's were related to IT/Internet boom (and housing).

Pages