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

Voting history

Wages and economic recoveries

====================================================================

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?

====================================================================

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.

====================================================================

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

====================================================================

Answer:
Neither agree nor disagree
Confidence level:
Not confident at all
Comment:
Need a proper model for this, and not clear what it is. Complicating factors: we should have seen deleveraging, financially constrained households, but we haven't in UK. Again, huge difference in 'wage gap' between U.K. and Germany, with similar unemployment experience, and trade balances going in directions opposite to ULC-based 'competitiveness '. This question is so good that I can't answer it. You

Happiness and well-being as objectives of macro policy

====================================================================

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

 
====================================================================
Answer:
Agree
Confidence level:
Confident
Comment:
Of course we should use both aggregate and granular data on well-being - e.g. measures of household incomes, consumption, access to social benefits, inequality etc. and how they might be affected by macroeconomic policies. But this is quite different from self-reported assessment of 'happiness' - see my answer to question 1.

====================================================================

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?

 
====================================================================
Answer:
Strongly disagree
Confidence level:
Extremely confident
Comment:
Bentham's utilitarianism foundered on the impossibility of interpersonal comparisons. Unfortunately, some of the economics literature ignores this issue and postulates a social welfare function that is the sum of individual utilities. Happiness research goes even further. In my view, happiness is not interpersonally comparable, nor additive across individuals, nor intertemporally comparable even for a single individual because of its subjectivity. There are plenty of indices out there which use reasonably objective data measuring aspects of well-being - e.g. the UN Human Development Index.

A “new” UK industrial strategy ?

====================================================================

Question 2: Do you agree that the UK needs a new regional policy?

====================================================================

Answer:
Agree
Confidence level:
Not confident
Comment:
Here there is some evidence, apparently positive. But again, i doubt our implementation capacity over the next several years.

Pages