Question 1: Which of the following factors is the primary reason for the rise in inflation in 2021?
Answer:
Supply constraints
Confidence level:
Very confident
Comment:
Fiscal policy was largely in the form of transfers that didn't fully replace the demand that was lost due to Covid-19. The supply-side constraints are real and in some cases dramatic. I wouldn't attribute inflation to monetary policy although I do question the need to have kept monetary policy so loose for so long. There was a dire need for liquidity provision in the first half of 2020. Beyond this, I don't understand how low interest rates were to address any of the economic challenges posed by Covid 19. They may have mainly inflated stock and housing prices.
Question 2: What is your evaluation of the following statement: “A well-designed government-stipulated wage increase can lead to higher productivity”?
Answer:
Disagree
Confidence level:
Not confident
Question 1: Which of the following statements most closely reflects your understanding of the relationship between productivity and wages.
Answer:
Wage increases can in some cases increase long-run productivity
Confidence level:
Not confident
Comment:
In the long run, wages are driven by productivity, not the other way around. I cannot dismiss the possibility that there are some industrial policies that would raise workers' bargaining power and wellbeing and therefore their productivity, certainly in the short run. But these are minor in the long run relative to the opposite direction of causation.
Question 3: Which of the following variables should fiscal rules target to best improve the performance of the UK macroeconomic policy going forward.
Answer:
No explicit target
Confidence level:
Very confident
Comment:
Fiscal rules in the UK have to date only increased uncertainty and made fiscal policy less credible. Rules have been changed frequently and broken, giving the public little sense on the path of policy in the medium term. They have also ratified the contractionary bias in fiscal policy in recent decades. Discretionary policy would be preferable. This doesn't mean having an erratic policy. Each budget should contain a clear discussion of medium turn policy goals. Absent formal rules, the chancellor will also be freed to discuss more contingencies, giving greater policy clarity. The OBR would continue to play an important role of forecasting, monitoring, and evaluating policy.
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:
Harmed
Confidence level:
Confident
Comment:
I stated in my answer to the first question that fiscal rules had no impact on the conduct of fiscal policy. Therefore, a more accurate answer to this question would have been that they had no impact on macroeconomic policy more generally. I stated "harmed" in response to this question to highlight that the general culture of what is viewed as "serious" fiscal policy in the UK has been an excessive attention to public debt. This led to very misguided austerity policies starting in 2010 and risk an premature tightening of policy in the recovery from Covid 19.
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).
Surging Inflation in the UK
Question 1: Which of the following factors is the primary reason for the rise in inflation in 2021?
Towards a High-Wage, High-Productivity Economy
Question 2: What is your evaluation of the following statement: “A well-designed government-stipulated wage increase can lead to higher productivity”?
Question 1: Which of the following statements most closely reflects your understanding of the relationship between productivity and wages.
Post-Covid Fiscal Rules for the UK
Question 3: Which of the following variables should fiscal rules target to best improve the performance of the UK macroeconomic policy going forward.
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?
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