David Cobham's picture
Affiliation: 
Heriot Watt University
Credentials: 
Professor of economics

Voting history

COVID-19 and UK Public Finances

Question 2: What is the best way to (eventually) reduce public deficits and debt?

Answer:
None of the above, other, or no opinion
Confidence level:
Confident
Comment:
The list of options omits economic growth, which raises tax revenue without raising tax rates, and raises GDP as the denominator. The priority should be to get a resumption of growth, and if that involves a little bit more inflation, fine. A lot of economic research, from the IMF and the OECD as well as academic economists, has shown the folly of austerity policies in response to the financial crisis, we surely do not need to go up that cul-de-sac again.

Question 1: How urgently should the UK government address the rise in public debt?

Answer:
There is no need to take or announce any budgetary actions to reduce the deficit or the public debt until the end of the pandemic
Confidence level:
Confident
Comment:
Best to wait until some of the dust at least has settled, otherwise we can't see what we're doing.

The Eurozone COVID-19 Crisis: EU Policy Options

Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?

Answer:
Joint borrowing by member states (e.g. Coronabonds)
Confidence level:
Very confident

Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?

 

 

Answer:
10-20% of GDP
Confidence level:
Confident

Covid-19: Economic Policy Response

Question 3: Which would be the maximal public debt you would be willing to tolerate if used effectively (as in your answers to 1 and 2 above) to support an economic recovery?

Answer:
120% of GDP (e.g. if fiscal support were doubled)
Confidence level:
Confident
Comment:
There needs to be room for further fiscal expansion if required, but a limit of 120% would help to ensure the possibility of an eventual return to normal levels (a return not to be hurried for the wrong reasons as it was after 2008).

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