Paolo Surico's picture
Affiliation: 
London Business School
Credentials: 
Associate professor of economics

Voting history

Deal or no deal: The Greece standoff

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Question 3: Do you agree that implementation of the agreement will lead to an expected decrease in Greek debt repayments?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
it is not obvious: to the extent the new interventions will be contractionary and given the forecast of output growth are lukewarm at best (especially relative to the high nominal interest rate paid on greek government bonds), it is not clear that he new plan will successfully stabilize the debt to gdp ratio. And to the extent that it does not, investors will keep asking a significant premium to hold Greek government bonds, suggesting that debt repayment may well not decrease in the near future.

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Question 2: Do you agree that Greece would be better off defaulting right now rather than signing to the agreement under consideration?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
It is hard to imagine how Greece could repay its debt (or even stabilize it in the short run) and, as the markets seem to be factoring in for a long time now, some form of default will be inevitable, with creditors 'forced' to write off a significant portion of the debt. So perhaps even more important of when Greece will default/restructure its debt (don't think the timing of that is that crucial) is the question on whether it will do this within the currency union or not.

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Question 1:  

Do you agree that, on balance, the implementation of the agreement as outlined in media reports will have a non-trivial negative effect on Greek GDP?

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Answer:
Agree
Confidence level:
Confident
Comment:
Increase in taxation and decrease in spending are most likely to have contractionary effects on GDP. Still, the fact that the new proposed deal seems tilted (at least in words) more towards the wealthier part of the population is likely to make these contractionary effects slightly smaller than they would have been otherwise.

The Importance of Elections for UK Economic Activity

Question 2: Do you agree that the outcome of the general election will have non-trivial consequences for aggregate economic activity (employment and GDP)?

Answer:
Neither agree nor disagree
Confidence level:
Not confident

Question 1: Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?

Answer:
Disagree
Confidence level:
Confident
Comment:
While austerity measures may have long-run benefits (because they may encourage structural reforms), there is little empirical evidence to support the hypothesis of expansionary austerity in the short-run. But the choice of cutting government spending more than increasing taxes (if any) the coalition government has probabibly minimized the negative impact of austerity in the short-run.

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