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

Voting history

The Future of Central Bank Independence

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Question 2: Do you agree that the traditional argument that less central bank independence leads to higher inflation will (still) be relevant over the next 48 months in Western economies?

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Answer:
Agree
Confidence level:
Confident
Comment:
Things will be different as long as we are still in "crisis mode." These days inflation seems to be well anchored (against both upward and downward forces) and I suspect that part of this is due to having a credible independent central bank.

German Council of Economic Experts' view of ECB policy

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Question 2: Do you agree that the ECB's monetary policy masks structural problems of member states?

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Answer:
Disagree
Confidence level:
Very confident
Comment:
There may be some truth to this, but if a premature withdrawal of expansionary monetary policies leads to a downward spiral then structural problems will definitely not become transparent.

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Question 1: Do you agree that exceptionally loose monetary policy by the European Central Bank is no longer appropriate?

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Answer:
Strongly disagree
Confidence level:
Very confident
Comment:
It would be extremely risky if the ECB would abandon its current course. The Eurozone is still very fragile and it would not surprise me that it could easily get much worse without the ECB's accommodating policies

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:
Agree
Confidence level:
Confident
Comment:
Germany's desire to save more at a time when other countries really needs to save more is costly for the latter. One could argue that this is simply a cost of being in a currency union. Or one could argue that being in a currency union comes with some responsibilities. I think the latter is correct. The tricky bit is, of course, whether one could design rules to implement this. But at this point, it would make sense for Germany to do some fiscal stimulus especially since it is hard to see substantial downside risk.

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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:
Agree
Confidence level:
Confident
Comment:
There is a very good chance that the Eurozone is in a bad equilibrium in which consumers do not spend because they are concerned about future earnings and firms are hesitant to hire workers and raise wages because they are concerned about demand for their products. Even if this is not behind the high savings rate in Germany it does make this increase in precautionary savings more problematic in the periphery.

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