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

Voting history

Post-Covid Fiscal Rules for the UK

Question 2: What impact has the sequence of fiscal rules adopted in the UK since 1997 had on the conduct of fiscal policy in the UK?

Answer:
Improved
Confidence level:
Not confident
Comment:
Having some framework for policy - some form of forward-looking rule - does force governments to pay some attention to the likely future path for debt and deficits. With no framework the temptation to just focus on today and simply make optimistic noises about the future is too great.

Question 1:  What impact has the sequence of fiscal rules adopted in the UK since 1997 had on the level of UK public debt? 

Answer:
Reduced
Confidence level:
Not confident
Comment:
On balance the rules may have reduced debt somewhat. This is largely because the debt GDP ratio in the years before the 2008 financial crisis were held at around the 40% limit the rules then specified. Had the UK gone into the financial crisis with a ratio much higher the stock of debt today might well be somewhat higher.

ECB Monetary Policy and Catch-up Inflation

Question 2: Which of the following policies is the most desirable to meet the ECBs objective to achieve its mandate of “price stability” as you understand this term.

Answer:
Inflation targeting
Confidence level:
Confident
Comment:
Flexible inflation targeting - by which I mean having a flexible and contingent desired horizon to return inflation to target when it has deviated from it - is likely to be the best one can do to create a nominal anchor. Simple but flexible is the key to decent policy.

Question 1: To what extent do you agree with the following statement? “The European Central Bank should systematically allow for inflation to exceed its target to compensate for periods of below target inflation.”

Answer:
Disagree
Confidence level:
Confident
Comment:
If you buy a large range of assumptions - central to which is the rational, forward-looking behaviour of all agents in a world of nominal rigidities and limits to policy options at low interest rates - it may in theory be sensible to aim for overshoots after undershoots on inflation. In practice I think it is very hard to imagine this working well and any monetary policy committee would be right to be very wary of actively wanting inflation to be 4% for two years after it had been close to 0 percent for two years.

Monetary Policy and Inequality

Question 2: What role should inequality play in the monetary policy decisions (interest rate policy and quantitative easing)?

Answer:
No role
Confidence level:
Confident
Comment:
Since there is no clear and consistent evidence of effects that in itself is an argument for it playing little role in policy making. Furthermore there are more direct and powerful tools - the tax and benefit system and the structure of public spending - to influence the distrubtion of income and wealth.

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