David Miles's picture
Affiliation: 
Imperial College
Credentials: 
Professor of economics

Voting history

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:
140% of GDP (e.g. if fiscal support were trippled)
Confidence level:
Not confident
Comment:
Who knows what may be needed. The UK ended the Napoleonic wars and the first and second world wars with vastly higher debt to GDP than 140% of GDP . That debt came down fairly smoothly.

Question 2: Which of the following would have the second greatest impact in mitigating the economic effects of the coronavirus economic crisis in the UK?

Answer:
Financial asset purchases including QE
Confidence level:
Confident
Comment:
Governments will be running huge fiscal deficits. There may be temporary indigestion in bond markets buying a vast amounts of new government debt. The central bank should be willing to buy large amounts of government debt to alleviate this. This is NOT helicopter drops and NOT printing money in the form of non-interest bearing notes to fund spending - reserves are interest bearing, or will become so when central banks put rates back into positive territory and that happens when things start to return to normal.

Question 1: Which of the following would have the greatest impact in mitigating the economic effects of the coronavirus economic crisis?

Answer:
None of the above, other, or no opinion
Confidence level:
Confident
Comment:
The government should temporarily pay a high proportion of the wages of those who are unable to work because their employers cannot produce but on condition they are not laid off.

The UK Productivity Puzzle

Question 4: Which of the following policies would be your second choice of policy to boost private sector productivity, in addition to or absent your first choice?

Answer:
Infrastructure investment
Confidence level:
Confident
Comment:
Better links into big cities from areas around them would help a great deal. Unfortunately Britain's biggest transport project - HS2 - seems an extraordinarily expensive and inefficient way of achieving this.

Labour Markets and Monetary Policy

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Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?

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Answer:
Disagree
Confidence level:
Not confident
Comment:
It is not likely that waiting until it is clear that a change in rates is needed is optimal. Fortunately, rate changes can be reversed, which is one reason by why waiting is a mistake.

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