Costas Milas's picture
Affiliation: 
University of Liverpool
Credentials: 
Professor of Economics

Voting history

Monetary Policy and Inequality

Question 2: What role should inequality play in the monetary policy decisions (interest rate policy and quantitative easing)?

Answer:
Minimal role
Confidence level:
Confident
Comment:
The Bank’s main aim is to defend price stability. The Bank of England is not “Bob the Builder” to fix it all. In an earlier CFM survey, quite a few of us suggested that Central Banks should purchase “green bonds” as an environmental-friendly policy. To also provide Central Banks with the task of influencing income inequality might be a big ask.

Question 1: How large is the impact of monetary policy on the joint distribution of income and wealth?

Answer:
Very Small
Confidence level:
Confident

Central Bank Digital Currency for the UK

Question 2: What effect will the introduction of a CBDC have on UK banks?

Answer:
Moderate benefits
Confidence level:
Confident
Comment:
In the medium to long run, I assume banks will adjust to the challenge.

Question 1: How beneficial would it be to the UK economy for the Bank of England to introduce a central bank digital currency in some form in the upcoming decade?

 

Answer:
Beneficial
Confidence level:
Confident
Comment:
Beneficial provided that we do not rush into the project for the sake of it. Currently, the whole idea is more like a shot in the dark as there are too many unknowns. So I would like to see a proper discussion and preparation before the digital currency is implemented. The digital currency is an asset which will be priced in the market. I assume it will offer an interest rate, which in turn, will provide the BoE with another powerful monetary policy tool. Will this interest rate be determined by a a so called "policy rule" and how will it be linked to the Bank's base rate? If, indeed, this digital currency offers an interest rate, how will this affect the value of the (traditiona)l sterling exchange rate?

Fiscal Rules in the European Monetary Union

Question 2: Which of the following is the one reform you would choose to improve fiscal rules?

Answer:
More flexible, countercyclical, or expenditure-based rules
Confidence level:
Confident
Comment:
A more flexible fiscal rule could take the form of a “dual mandate” in which the budget deficit-to-GDP ratio is equal to 3% but, at the same time, can rise depending on whether a country records governance improvements. Assume, for instance, that a country records an improvement in its government effectiveness (proxied by the country's World Bank government effectiveness indicator relative to the EU average). Consequently, this very country could be allowed to record a higher budget deficit compared to another country which experiences a deterioration in government effectiveness. In other words, commitment to structural reforms will provide a strong signal that the country in question “means business” and therefore be allowed some flexibility with reference to its budget deficit.

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