Richard Portes's picture
Affiliation: 
London Business School and CEPR

Voting history

House Prices and the UK economy

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Question 2: Do you agree that a more widespread weakening of the UK housing market will slow UK GDP growth significantly?

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Answer:
Strongly disagree
Confidence level:
Confident
Comment:
‘Weakening’ might be consequence of expansion of supply, which would overall be expansionary. In any case, stabilization or even some fall (not a large fall) in house prices not likely to have ‘significant ‘ negative effect on aggregate GDP growth.

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Question 1: Do you agree that the phenomenon of declining house prices will ripple out from the London property market leading more UK regions to experience falling prices?

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Answer:
Disagree
Confidence level:
Not confident
Comment:
Not ‘declining’ outside London, but not rising significantly over the next couple of years.

Global risks from rising debt and asset prices

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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
‘Global leverage’ up? Not down, yes, and up in China, but where else? And is monetary policy ‘loose’ when natural real rate seems to have fallen considerably?

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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?

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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
This question is highly oversimplified - as if a journalist were putting it. If ‘inflated asset prices’ means bubbles, that’s doubtful. But there’s no doubt that neither public nor private sectors have done significant deleveraging since 2008 - except the banks, which have been forced to do so and are consequently much healthier. Stress tests suggest that banks could withstand very sharp falls in asset prices. So where are the risks? Maybe in parts of shadow banking sector. But that Too is arguable - see recent FSB statement to the contrary.

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:
Agree
Confidence level:
Not confident
Comment:
Must have some effect, but here too there is a mystery: the 'productivity puzzle '. If factors unrelated to U.K. labour market policies and institutions are driving exceptionally low productivity growth, then this may be a strong independent force keeping real wages down. But we don't know why productivity growth has been so slow. Maybe it's because labour market is so flexible and can absorb so many low-skill workers.

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