Simon Wren-Lewis's picture
Affiliation: 
University of Oxford
Credentials: 
Professor of economics

Voting history

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:
nontrivial but ≤ 10%
Confidence level:
Confident
Comment:
I think, as far as the short term is concerned, the emphasis on "financial disruption" is misplaced, and perhaps even a deliberate scare tactic. The exchange rate will fall on Brexit, but for good economic reasons. The economy may enter recession, but again for reasons unrelated to "financial disruption". As a result I doubt if interest rates will rise.

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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:
Very confident

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
Comment:
There are various alternatives to QE to use at the ZLB that are likely to be more effective than QE. In particular central banks should actively explore, in cooperation with governments, setting up the ability to undertake helicopter money. One of the undesirable side effects of central bank independence is that governments are no longer able to undertake a money financed fiscal stimulus in a deep recession. Governments and central banks need to put that right by one means or another.

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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 disagree
Confidence level:
Very confident
Comment:
I assume by 'normal times' you mean that short rates are not at or near their lower bound. In which case you have one instrument, nominal short rates, which dominate the other (QE) in terms of predictability and effectiveness. There is therefore no reason to use the inferior instrument.

National Living Wage and the UK economy

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Question 2: Do you agree that the new NLW will have a muted effect on wages and prices?

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Answer:
Agree
Confidence level:
Confident

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