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

Voting history

Are academic economists ‘in touch’ with voters and politicians?

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Question 1: Do you agree that the economics profession needs an institutional change that promotes the ability to communicate more effectively with policy-makers and the public at large and to make clear when economists have a united view; and do you agree that we need to introduce leadership to help achieve this improvement through coordinated efforts?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Only body that could 'represent' views is RES. It has for many years had a successful media initiative. Fine for publicising research, but couldn't legitimately speak for profession except on matters like research funding.

Brexit: the potential of a financial catastrophe and long-term consequences for the UK financial sector

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Question 2: What is the probability that the UK experiences such a significant disruption to financial markets and asset prices following a vote for Brexit on 23 June?

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Answer:
> 70%
Confidence level:
Extremely confident
Comment:
We are running a current account deficit of 6-7% of GDP, financed by portfolio capital inflows and FDI. It is highly likely that there would be a 'sudden stop' to these capital flows, a sharp depreciation of sterling, and a sharp fall in asset prices. We would no longer be the 'safe haven' that we have been in 'risk off' episodes of recent years. We could draw on our Fed swap line for dollar liquidity needs, but that would not deal with the problem of quickly bringing down the current account deficit. Typically in these episodes, the exchange rate adjustment takes time to affect exports, and the fall in the deficit comes through a compression of imports that in turn comes from a fall in output, employment and incomes (as one saw in almost all advanced countries in 2009). Depending on its assessment of balance sheet effects, the Bank of England might feel compelled to raise policy interest rates to defend the exchange rate.

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Question 1: Do you agree that there would be substantial negative long-term consequences for the UK financial sector if the UK were to leave the EU?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
We would first lose all euro clearing business, because the ECB would require that it move to a euro-area country, and we would no longer have the protection of the ECJ (which stopped them from doing this before). In the likely case that we would stay out of the Single Market (because the 'Norwegian model' would be unacceptable to the Leave leaders), we would lose access for financial products and automatic 'passporting' rights, as well as any influence on EU financial regulation. Many activities and much financial sector employment would go to Frankfurt, Paris, and Dublin - Edinburgh as well, if Scotland were then to secede.

The future role of (un)conventional unconventional monetary policy

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Question 2:  Do you agree that central banks should operationalise the use of these alternative tools of unconventional monetary policy for use either in the near term, or in the future, as economic conditions warrant?

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Answer:
Strongly agree
Confidence level:
Extremely confident

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Question 1: Do you agree that central banks should continue to use the unconventional tools of monetary policy deployed in response to the global financial crisis as part of monetary policy under normal economic conditions?

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Answer:
Strongly agree
Confidence level:
Extremely confident

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