Nicholas Oulton's picture
Affiliation: 
London School of Economics
Credentials: 
Senior Visiting Research Fellow

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:
Strongly agree
Confidence level:
Extremely confident
Comment:
In the UK case we have in effect already operationalised the use of helicopter money sine the period of active QED coincided with a large budget deficit. In other words, pensions and welfare benefits were being paid for by printing money, at least in part. So I don't see any great issue of principle here. We might as well retain the option of doing this again, should it prove necessary

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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:
Strongly agree
Confidence level:
Extremely confident
Comment:
Since we are likely to be near the zero lower bound for some considerable time, it obviously makes sense to retain the option of more QE, if and when needed.

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:
Agree
Confidence level:
Confident
Comment:
The rate of inflation will be determined by monetary policy and any external shocks which the MPC decides to accomodate, not by domestic shocks like the NMW.

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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:
Disagree
Confidence level:
Not confident
Comment:
The NMW will be 34% higher in 2020 than is the current minimum wage. Assuming the Bank of England hits its 2% inflation target over 2015 to 2020, that is an increase of 22% in real terms. But if the productivity of minimum wage workers rises at 2% and the Bank hits its target, then the NMW need have no effect on employment. Most observers are pessimistic about productivity but I remain relatively optimistic. Howeverit is possible that while average productivity ries at 2% that of low wage workers will rise more slowly.

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:
Not confident
Comment:
The crucial issue is what sort of policy Britain would follow in the event of Brexit. Brexit would be a huge shock to the British political system. So future policy would be hard to predict. Who would be in charge? On the other hand other risks might make uncertainty about British policy seem small beer. The election of Marine Le Pen to the French presidency would likely lead to the breakup of the eurozone and even of the EU. This outcome may not seem the most probable one at the moment but any rational decision-maker should take it into account.

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