Question 2: Should the ECB respond to movements in the euro-dollar exchange rate of the nature observed in 2022?
Answer:
No
Confidence level:
Confident
Comment:
I'm assuming we are talking here about actual forex intervention. The ECB should of course respond to the inflationary implications of depreciation in its interest rate setting.
Question 1: What was the main cause for the euro’s decline relative to the US dollar in 2022?
Answer:
Monetary policy differences
Confidence level:
Confident
Comment:
I put monetary policy differences first, but the other two are also important. If the Ukraine invasion had not occurred, the safe haven effect would then have been smaller or zero, but interest rate divergences could still have led to some euro depreciation. On the other hand if interest rates had not diverged but Ukraine had been invaded, the depreciation would, in my view, have been much smaller. But really an 'all of the above' answer would be more correct.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
Prospects for Euro Area Inflation in 2023
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Question 1: How likely is it that peak headline euro area inflation is behind us?
Euro weakness in 2022
Question 2: Should the ECB respond to movements in the euro-dollar exchange rate of the nature observed in 2022?
Question 1: What was the main cause for the euro’s decline relative to the US dollar in 2022?
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