Ricardo Reis's picture
Affiliation: 
London School of Economics and Columbia University
Credentials: 
Professor of economics

Voting history

Autumn Statement & Charter for Budgetary Responsibility

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Question 1: The Chancellor forecasts a cyclically adjusted fiscal surplus by 2017-18 and in cash terms by 2019-20. Do you agree that this planned path of fiscal consolidation is appropriate?

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Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
Countercyclical fiscal policy advises that with forecasts of an expansion in output, there should be fiscal consolidation. Moreover, the very large increase in public debt in response to the crisis must be paid for by moving quickly towards primary surpluses before the next adverse shock hits. Calibrating the exactly optimal rate of fiscal consolidation is difficult, but the path for the public debt seems sensible.

China’s growth slowdown: likely persistence and effects

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Question 2:

Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).

Answer:
Agree
Confidence level:
Very confident
Comment:
There are many linkages between the Chinese and UK economy, including trade, direct investment, correlation of policies, and global financial cycles. While it is possible that these might offset each other, it seems more likely that they would not when it comes to UK growth. If so, the state of the economy would be different, so policy variables would likely have to differ as well.

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Question 1:

Do you agree that the Chinese economy is likely (say more than 50% probability) to maintain in the medium term (say, for at least ten years) a rate of annual growth exceeding 6%.

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Answer:
Agree
Confidence level:
Not confident at all
Comment:
Economic science is very far from being able to predict growth, especially over the medium term, with any confidence. Moreover, depending on how much of China's recent growth is due to Solow-type convergence, versus miracles (http://www.nber.org/papers/w11528) one could expect past growth to persist or not.

ECB's quantitative easing

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Question 2:

Do you agree that the structure of the ECB's QE programme makes the Eurozone more fragile and increases the risk of one country leaving the euro?

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Answer:
Agree
Confidence level:
Confident
Comment:
On the one hand, the structure of the program protects the solvency of the ECB and it prevents a redistribution of resources among member states, which is against its mandate but which the ECB has been pressured and/or tempted to do. So, insofar as the euro is irreversible, then the structure makes the Eurozone more robust. But, on the other hand, if we consider the possibility that one country may choose to leave, and that TARGET II and/or ELA balances would be reneged on, then this arrangement encourages local banks/citizens/speculators to run on their local banks and force an exit.

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Question 1:

Do you agree that the design of the ECB's QE programme reduces its effectiveness? 

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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
While there is compelling evidence that QE has been effective in the recent crisis at reducing interest rates, the channels through which it operated are still being figured out. There is exciting research on the topic, but still not a definite conclusion. Therefore, concluding whether the particular approach taken by the ECB will improve or hurt that effectiveness is not something that I think we can confidently answer.

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