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

Voting history

Fiscal Rules in the European Monetary Union

Proposition 1: The existing fiscal rules for European Monetary Union members require revision.

Answer:
Strongly agree
Confidence level:
Very confident

Asset Prices and Monetary Policy

Proposition 2: Asset prices and financial imbalances are best addressed using macroprudential tools and left out of the monetary policy decision making process.

 

Answer:
Disagree
Confidence level:
Very confident
Comment:
They should be FIRST addressed with macroprudential tools, but there should always be a 'backstop' available in the form of monetary policy actions. We still do not have anywhere near enough experience of macroprudential tools to be sure that we can calibrate them appropriately for all circumstances.

Proposition 1: The Bank of England’s mandate should be officially modified to take housing or other asset prices into account in its monetary policy decisions.

Answer:
Strongly agree
Confidence level:
Very confident
Comment:
The Bank's *monetary policy remit* should cover the right to focus policy temporarily on house prices (but not any other asset prices, they're too volatile and less closely related to social welfare) if and only if the macroprudential tools don't seem to be being effective. And it is essential that this should be known and understood by the public, so that the possibility of interest rate or other monetary policy decisions being aimed at house prices is factored into expectations of house prices. What the Cosgrove paper shows is that, under reasonable assumptions about expectations and asset prices and in the context of a wide range of arbitrary shocks, an 'activist' strategy which affects expectations leads to less volatile inflation, output and asset prices than a 'sceptic' strategy which pays no attention to asset prices.

The “Spend Now, Tax Later” Budget

Question 3: Which of the following best characterizes the pace at which the budget addresses UK’s medium term fiscal challenges (deficit and debt)?

Answer:
Reduces deficits too rapidly
Confidence level:
Not confident
Comment:
Well, the danger is that it does this. But there's many a slip twixt cup and lip.

Question 2: To what extent will the “super deduction” aide the UK’s recovery from the Covid recession?

Answer:
Moderately
Confidence level:
Confident
Comment:
But there's a lot of other things going on too.

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