Wouter Den Haan's picture
Affiliation: 
London School of Economics
Credentials: 
Professor of economics

Voting history

Global risks from rising debt and asset prices

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

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Answer:
Agree
Confidence level:
Confident
Comment:
Yes, but has been a side product of the stimulative monetary policy. And although there is definitely some risk associated with the remaining high leverage a more restrictive monetary policy would have been much worse in terms of its negative impact on economic activity.

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

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Answer:
Agree
Confidence level:
Confident
Comment:
Debt levels are still high, some asset prices (like house prices in some countries) may be inflated, and the financial regulatory system is still far from perfect. Moreover, there are several risk factors such as Brexit. Increased growth has made the world saver. But it makes perfect sense to remain very cautious.

Juncker's State of the Union Address

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Question 2: Do you agree that the euro has had more benefits than costs?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
This is a difficult question for two reasons. First, one has to weigh benefits such as facilitating trade and financial flows against the costs such as loosing currency depreciation as a possiblity to improve competitiveness. I would put much emphasis on the latter because this cost can be more severe and serious economic costs for some outweighs some benefits for others. Second, we do not know the counterfactual. I would not be surprised that there also would be severe crises in the eurozone periphery countries without the euro. After all the euro was created because the alternatives are also problematic. Just imagine a situation in which the periphery countries have their own currency but cannot issue debt in their own currency when economic conditions deteriorate.

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Question 1; Do you agree that euro membership should be compulsory for all EU member states?

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Answer:
Strongly disagree
Confidence level:
Very confident
Comment:
There are quite a few advantages to having a common currency. But there are also risks and the Euro crisis have exposed those clearly. The infrastructure of the eurozone has not changed fundamentally and those risks remain and it would not be a good idea to admit more countries before the current eurozone countries have established a robust stable credible currency union. Even then we should be careful to only include countries that will fit in nicely.

Wages and economic recoveries

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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?

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Answer:
Strongly agree
Confidence level:
Very confident
Comment:
The UK labour market differs in key dimensions from Eurozone labour markets. In particular, it is quite harsh and offers less worker protection. These are due to policy choices and are very likely to impact wage setting, for example, by affecting workers' bargaining position.

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