Costas Milas's picture
University of Liverpool
Professor of Economics

Voting history

Prospects for Economic Growth in the UK April 2014

Question 1

The long period of slow or negative growth might imply that there is a substantial output gap in the UK economy.  Do you agree that there is currently a larger output gap than the OBR estimate to the extent that the shortfall in output relative to capacity is 3% or greater?  

Confidence level:
Not confident
One would hope to get a fairly reliable answer to the question by looking at the historical performance of the UK economy over 1830-2013 (data from the "correct" excel file of Reinhart and Rogoff). To this end, I pool together information from different filters. I proxy the output gap by the median and/or the average of (i) the output gap using a Hodrick-Prescott trend, (ii) the output gap using a cubic trend and (iii) the output gap using the full sample asymmetric Christiano-Fitzgerald (2003) filter. From 1955 onwards, I also include (in the median/mean) the OBR output gap measure. For 2013, the median output gap is estimated at -0.5%; the average output gap is estimated at -4.7%. In my view, this big difference flags the difficulty in answering the question even by digging deep into the history...

Responsible long-term fiscal policy (pilot survey)

Second question:

To help ensure that advanced country governments pursue responsible fiscal policies, countries should adopt formal rules for limiting structural deficits, which are supported by primary legislation or constitutional reform.

Strongly Agree
Confidence level:
Very confident

First question:

To help ensure that advanced country governments have sufficient flexibility to respond to future crises, it is important that finance ministries aim for a ratio of public debt to GDP that is substantially less than 60% in normal times.

Confidence level: