Etienne Wasmer's picture
Affiliation: 
Sciences Po, Paris
Credentials: 
Professor of Economics

Voting history

Post Covid-19 Potential Output in the Eurozone

Question 2: How much lower will the potential growth rate of GDP in the Eurozone in 2025 be due to Covid-19 relative to pre-Covid forecasts?

 

Answer:
½ percentage point or less
Confidence level:
Confident
Comment:
same as above. If we are in the middle of public finance crisis, it will be a -2 to -3% but hard to tell whether this is in 2025, 2024 or 2023.

Question 1: How much lower will the potential level of GDP in the Eurozone in 2025 be due to Covid-19 relative to pre-Covid forecasts?

 

Answer:
Between 2% and 5%
Confidence level:
Confident
Comment:
This is a break in the trend, and Europe has traditionally be slow to adjust to a new organization, it will indeed take 5 to 10 years to adjust, not to talk about a risk of public finance crisis over the 5 year window of the forecast exercise.

The Eurozone COVID-19 Crisis: EU Policy Options

Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?

Answer:
Joint borrowing by member states (e.g. Coronabonds)
Confidence level:
Confident

Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?

 

 

Answer:
<€700 billion (~5% of EZ GDP): Current committed EU funding is already excessive.
Confidence level:
Confident

Labour Markets and Monetary Policy

======================================================================

Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?

======================================================================

Answer:
Disagree
Confidence level:
Confident
Comment:
Slowly raising interest rates is becoming urgent ; not because of the inflation of commodity ; but because of inflation of financial and real assets such as housing. I would like to see a progressive rise in interest rates in order to reduce at a slow pace the price of these inflated assets.

Pages