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

Voting history

Global risks from rising debt and asset prices

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

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

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

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?

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

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

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

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

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

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.

Pages