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

Voting history

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:
Other, or no opinion
Confidence level:
Confident
Comment:
The decline in the deficit is not projected to happen quickly. That is almost certainly sensible but poses risks. No one can feel confident of the ability of the UK government to issue debt at such favorable rates several years down the road. Having to continue to issue a great deal of new debt for years to come is therefore inevitably a risk.

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

Answer:
Moderately
Confidence level:
Confident
Comment:
It will bring forward some limited amount of investment to the near term when a boost to demand and supply potential is probably needed most.

Question 1: How will the increase in the corporate tax rate from 19% to 25% affect the UK’s international competitiveness in the medium term?

 

Answer:
Moderate damage
Confidence level:
Confident
Comment:
The UK will move from a somewhat below average tax country for corporates to a somewhat above average tax country. Whether this is a good way to raise revenue is unclear - in part because its incidence is far from obvious. Better ways to raise revenue - for example by a revamp of housing taxation - have not been used.

The ECB’s Green Agenda

Question 2: Would you support changing the ECB’s mandate to incorporate the EU’s target of carbon neutrality by 2050, if such a change is deemed legally necessary to adopt your preferred approach?

Answer:
No
Confidence level:
Confident
Comment:
The ECB is just not the right institution to be endorsing a target for carbon neutrality. Such endorsement would be very largely a gesture and is cosmetic given the ECB does not have appropriate tools to bring the carbon neutrality neutrality. Indeed such endorsement could be negative if it lets politicians who do have control over more appropriate policies say that the central bank is helping achieve the target.

 Question 1: Which of the following actions is the most advisable approach for European Central Bank to address the environmental impact of its bond-purchasing policies?

Answer:
Aiming for market neutrality
Confidence level:
Confident
Comment:
The best way to address environmental issues is by setting an appropriate price for carbon which reflects the cost of the externalities. Using monetary policy seems like fourth best as a policy and unlikely to do much good (beyond letting a central bank look like its on the side of the angels).

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