Sir Christopher Pissarides's picture
Affiliation: 
London School of Economics
Credentials: 
Professor of economics

Voting history

German current account surpluses

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Question 2: Do you agree that the German government should increase public spending given its persistently large current account surplus and given that it is part of the Eurozone?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
for the reasons that I explained in my answer to question 1. Increasing public spending in Germany is a way to helping the Eurozone with a boost in aggregate Eurozone demand

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Question 1: Do you agree that German current account surpluses are a threat to the Eurozone economy?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The Eurozone economy needs additional spending to restart robust growth. Because of the size of Germany's surpus savings in the Eurozone as a whole are too large and they prolong unemployment and recession in the periphery. The reason Germany has such big surprluses is that it has no currency to appreciate, so the existence of the Eurozone is giving it this facility. It should return part of it to the Eurozone otherwise political conflict will add to the economic problems that it is causing

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

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Question 3: What do you think will be the overall economic consequences of Brexit for the UK?

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Answer:
Mildly negative
Confidence level:
Very confident
Comment:
The UK economy is in a good state and can withstand shocks. It relies a lot on the financial sector for its well being. Eventually, the economy will adjust to Brexit and restructure, at which point I expect the costs to be mildly negative. But on the way there I expect them to be strongly negative. the adjustment period could be more than 5 years.

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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:
Financial markets do not like uncertainty and this is reflected in asset prices. Whatever the final outcome of the negotiations in the event of Brexit there will be uncertainty in the short term

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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:
In the event of Brexit the UK will have to renegotiate its access to EU financial markets and EU nations are not likely to be as generous with EU-based banks if the alternative is to develop their own and reap some of the rewards themselves

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