Panicos Demetriades's picture
Affiliation: 
University of Leicester
Credentials: 
Professor of financial economics
Former Governor, Central Bank of Cyprus and ECB Governing Council member

Voting history

Juncker's State of the Union Address

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Question 1; Do you agree that euro membership should be compulsory for all EU member states?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
Notwithstanding all its imperfections, the Euro remains the only way forward for Europe to continue to process of further economic and political integration and embed shared common values, including democracy, respect for human rights, rule of law and diversity throughout the continent. Without further intergration, the risks of rising nationalism and populism pose a serious threat. Further economic convergence is needed and better social safety nets. Sooner or later some degree of fiscal federalism will be needed and the use of the common currency makes all aspects of integration a lot easier. It also makes Europe a more powerful force internationally. The momentum needs to be maintained, so that in one or two generations, citizens of Europe will not know any alternatives. At that stage Europeans will begin looking like the United States. Does anyone today think that California or Florida could have their own currencies?

Wages and economic recoveries

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Question 2: Do you agree that the different behaviour of UK real wages relative to Eurozone wages during the Great Recession is in large part due to the UK having different labour market policies?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
To explain this one needs to also look at differences in migrant worker flows within the EU. It could be that the UK attracted more Eastern European workers to low paid jobs, helping to depress real wages and achieve higher growth, at the expense of domestic workers. Low paid jobs done by lots of migrant workers are not a good recipe for sustainable growth and social cohesion.

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Question 1: Do you agree that lower real wage growth was beneficial for employment levels during the Great Recession?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Neoclassical labour market, partial equilibrium, models where employment and real wages are inversely related are too simplistic and far too narrow. A low wage economy is likely to be a stagnating economy with low productivity, low effort, insufficient incentives for education and training, low aggregate demand, little investment and high unemployment. It's a bad macroeconomic equilibrium with many negative social and political consequences and disenfranchised voters. It's a world where populist politicians rise to power and voters who think it can't get worse vote for crazy policies like Brexit. In other words, a world based on myopic models with disastrous outcomes.

Happiness and well-being as objectives of macro policy

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Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?

 
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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
They are already playing a role, by complementing hard data with survey views, at least when it comes to monetary policy. I am not convinced that we need to attach even more weight to them, those who advocate their great use are very obviously conflicted (they have built their careers on them, if not their egos).

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Question 1: Do you agree that subjective well-being measures, or at least some of the subindices from the typical survey measures, are now reliable enough to give useful insights when used in macroeconomic empirical analysis?

 
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Answer:
Agree
Confidence level:
Confident
Comment:
They should be taken into account alongside everything else, but should certainly not dominate the thinking of policy makers. They can be a useful "add-on", if used consistently.

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