Ethan Ilzetzki's picture
Affiliation: 
London School of Economics

Voting history

Transparency and the Effectiveness of Monetary Policy following the Warsh Review at the Bank of England

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Question 1: Do you agree that the simultaneous release of the policy decision, the enhanced minutes (including the voting record) of the MPC meeting and (in the relevant months) the release of the Inflation Report will facilitate inference on the likely stance of monetary policy?
 
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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
As an academic, I don't require MPC information at a frequency where this distinction matters. I can't assess how this affects market participants.

Greece’s elections and the future of the Eurozone

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Question 2: Do you agree that refusal of the core EU countries to a renegotiation of the Greek bailout agreements would carry serious risks for the economic well-being of the Eurozone?

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Answer:
Agree
Confidence level:
Confident
Comment:
Core EU countries should preempt a Syriza victory and offer to renegotiate Greek sovereign debt regardless of the outcome of the election. Exceeding 150% of GDP, Greek debt is not sustainable, but at this point the vast majority of this debt is owed to the EU (almost 100% of GDP owed to EFSF or in bilateral loans). Greece's debt burden is therefore a core-EU decision variable. These loan facilities have prolonged the maturity of Greek sovereign debt, but more can be done to lower the current debt burden of the Greek government. These could be tied to further measures to build Greece's tax collection abilities. The fallout from a Greek default or exit from the Eurozone is uncertain, but does entail some large tail risks. The costs of lowering Greek debt burden are small in comparison.

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Question 1: Do you agree that a Syriza victory on 25 January would lead to a significant or sustained escalation in spreads for other peripheral Eurozone countries?

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Answer:
Agree
Confidence level:
Not confident at all
Comment:
Forecasting spillovers of sovereign spreads is a nearly impossible task. But this is a significant risk that needs to be considered in contingency planning.

2014 Autumn Statement

 

Question 2: Do you agree that the underperformance of tax receipts in recent years, provides a strong case for higher taxes?

Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
The drop in tax revenues has been largely cyclical. Revenues are recovering to their pre-crisis levels (as a percent of GDP). Nevertheless, the lost revenues have left a debt burden that needs to be addressed in the long term. Deficit reduction should and will most likely involve some combination of (moderate) public spending cuts and moderate tax increases. But there I do no see a strong case for precipitous action on tax revenues.

Question 1: Do you agree that the scale of this planned reduction in total managed expenditure is credible?

Answer:
Strongly Disagree
Confidence level:
Confident
Comment:
Government spending in the decades preceding the crisis hovered around 40% of GDP. Current levels of spending are entirely within historical averages. It is hard to see how public spending could be cut by an additional 35% without a wholesale change in the role of the state. It is hard to envision such a change.

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