Andrew Mountford's picture
Affiliation: 
Royal Holloway
Credentials: 
Professor of economics

Voting history

The Future of Central Bank Independence

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Question 1: Do you agree that central bank independence in the Eurozone and the UK will decline over the next 48 months?

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Answer:
Strongly agree
Confidence level:
Very confident
Comment:
I hope so. The control of the amount of credit in the economy and the control of the banking sector more generally is intrinsically political. Central bank independence only makes sense within a mindset of a stable balanced economy where the only implication of too lax a credit policy is inflation. This mindset was never grounded in reality but recent events have shown just how wide of the mark this vision of the macroeconomy is. It is not just risk and financial crises that is missing. Major banks are global enterprises that are engaged in regulatory arbitrage, in channeling billions of dollars around the world in tax avoidance schemes - (Zucman, Piketty ) - thereby significantly weakening state capacity, and in funding political campaigns in favor of reduced regulation. The idea that control of this sector should be removed from government and thus ultimately from accountability to those that the system is supposed to work for (the general public) is economically ludicrous…..and politically terrifying. The economics literature on the independence of central banks has been about eliminating political influence on central banks. However, a more relevant independence is that between the regulators and the regulated. As an economist one of the most worrying aspects of the recent financial crises has been the seemingly great desire amongst policy makers and regulators to insure ex post those who made bad investments. If the market's incentive mechanisms are to work then those who lend to people or companies or governments who have little chance of paying the money back, must lose money. To understand the ease with which an ex-post insurance policy was implemented, it is surely not coincidental that many politicians, regulators and central bankers are ex-bankers and vice versa. For credible independence, working for a regulator or as a responsible politician should preclude one from ever working in the sector that you regulate or govern. Career paths must be uni-directional (no movement from regulator to regulated) if not entirely separate.

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:
Neither agree nor disagree
Confidence level:
Confident

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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:
Neither agree nor disagree
Confidence level:
Confident

Are academic economists ‘in touch’ with voters and politicians?

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Question 5: Voters think that the preferences of economists do not align with their own preferences. (This includes the possibility that they thought that the predicted negative economic consequences would not affect them personally).

Do you agree this was an important reason for a majority of UK voters going against the near unanimous advice of the economics profession?

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Answer:
Agree
Confidence level:
Confident

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Question 2: What do you think is the most likely reason that a majority of UK voters went against the near unanimous advice of the economics profession?

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Answer:
C. Different preferences
Confidence level:
Confident

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