Question 1: Do you agree that cryptocurrencies are currently a threat to the stability of the financial system, or can be expected to become a threat in the next couple of years?
At this point, Bitcoin and other cryptocurrencies remain a toy for a very narrow segment of investors and is detached from the financial system and the real economy.
My own research and related research in the US indicates that housing price declines have impacts for the economy as a whole. In research we have conducted on the UK housing market (Cloyne, Huber, Ilzetzki, and Kleven, 2017), we find that a £1 decline in housing prices leads to a 20p decline in borrowing. From US-based research (e.g. Mian and Sufi) it appears that consumption declines follow the decline in borrowing.
Question 1: Do you agree that the phenomenon of declining house prices will ripple out from the London property market leading more UK regions to experience falling prices?
London is the central hub of the UK economy and a slowdown in London is likely to spill over to other parts of the country. In research we have conducted on the UK housing market (Cloyne, Huber, Ilzetzki, and Kleven, 2017), we find that a £1 decline in housing prices leads to a 20p decline in borrowing. From US-based research (e.g. Mian and Sufi) it appears that consumption declines follow the decline in borrowing. With weakening London consumption, house prices in the rest of the country are bound to suffer as well.
Low central bank rates are a consequence--not a cause--of global low real (risk-free) interest rates. The global recovey is still sluggish and central banks could and should address macroprudential risk with macroprudential policy, not interest rate policy.
It is very difficult--perhaps impossible to identify in advance whether debt levels are "excessive" or asset prices are "over-inflated". Having said this, there are some signs pointing in this direction and I would err on the side of caution. UK savings rates have reached new lows, while leverage in mortgage markets is elevated again. House price growth is slowing. Global property values seem to be following a "whack a mole" pattern where house price collapes in one region (the US, Spain) seems to br followed quickly by a new "hot market" discovery (Berlin, Vienna, China).
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).
Bitcoin and the City
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Question 1: Do you agree that cryptocurrencies are currently a threat to the stability of the financial system, or can be expected to become a threat in the next couple of years?
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House Prices and the UK economy
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Question 2: Do you agree that a more widespread weakening of the UK housing market will slow UK GDP growth significantly?
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Make sure to save each question separately
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Question 1: Do you agree that the phenomenon of declining house prices will ripple out from the London property market leading more UK regions to experience falling prices?
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Global risks from rising debt and asset prices
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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?
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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?
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