The latest thinking of European macroeconomists

The “Spend Now, Tax Later” Budget

Friday, March 19, 2021

Summary

The majority of the CfM panel of experts on the UK economy thinks that the super-deduction for corporate investment announced in the spring budget will moderately aid the UK’s recovery from the Covid recession, but that the announced corporate tax increases will do moderate harm. Most panelists believe that the government is moving too fast on deficit reduction.

Background

The March 2021 CfM survey asked members of its UK panel of experts about tax, spending, and deficit-reduction measures in the spring budget.

The ECB’s Green Agenda

Saturday, February 27, 2021

Summary

The majority of the CfM-CEPR European panel of experts supports active measures to use the ECB’s bond-purchasing programme to either exclude industries with negative environmental impact or biasing its portfolio towards green investments. An additional 30% of the panel believes that the ECB should rebalance its portfolio to correct its current bias in favour of polluting industries. However, a majority also believes it would be inappropriate to change the ECB’s mandate to reflect green objectives.

Background

Should We Worry About Post-Covid Inflation?

Thursday, January 28, 2021

Summary

The CfM panel of experts is split between those predicting that UK inflation will be roughly at its current target and those believing that inflation will be above target in the upcoming decade. A smaller minority worries that the UK growth rate will be too low for the Bank of England to stimulate inflation. Beyond the growth rate of the economy, additional factors to look at in projecting inflation are the effects of Brexit, rising public debts, and global factors.

Background

Post Covid-19 Potential Output in the Eurozone

Tuesday, December 15, 2020

Summary

A majority of the CfM-CEPR panel of macroeconomic experts on the European economy predict a 2-5% decline in the level of potential Eurozone GDP, but no impact on potential the long-run growth rate.

Background

The December 2020 CfM-CEPR survey asked members of its European panel to estimate the loss in the level and growth rate of potential GDP in the Eurozone due to the Covid-19 pandemic.  

Covid’s Long-run Impact on the Eurozone Economy