Proposition 1: The existing fiscal rules for European Monetary Union members require revision.
Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
Fiscal rules are complex and ever evolving in the European Monetary Union. Their strictness and occasional violations have increased political uncertainty in Europe. A revision is needed!
For more details see reference below:
Evi Pappa "Fiscal Rules, Policy and Macroeconomic Stabilization in the Euro Area," ECB Sintra Forum proceedings (available at https://www.ecb.europa.eu/pub/conferences/shared/pdf/20201111_ECB_Forum/academic_paper_Pappa.pdf)
Question 2: Which of the following is the one reform you would choose to improve fiscal rules?
Answer:
Expansion of EU level fiscal capacity for expanded mutual insurance
Confidence level:
Very confident
Comment:
A combination of a debt anchor (recognising the limitation of one-size-fits-all and allowing differentiation depending on countries’ needs and capacities) with a single operational expenditure rule and the creation of a permanent central fiscal capacity to address large shocks and possible finance of spending (like in infrastructure and education) that involves positive externalities that regional policymakers might fail to internalise are desirable features of a possible revision.
Question 3: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly recognize unemployment and/or economic growth as a secondary aim, secondary to its price stability mandate.”
Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
European countries are very heterogeneous, labor market institutions, the role of the government and the sensitivity of the private sector to changes in the interest rate are not comparable across countries. Monetary policy is supposed to be neutral in the long run, so I cannot see how growth can be a secondary objective. Of course, in the current conditions the shock is common and any policy to lift the euro area economy away from recession should be welcome, but it should not become a rule, rather than an exception given the current circumstances. Regional fiscal policy is a better tool to accomplish unemployment and growth objectives.
Question 2: Would you support increasing the ECB’s inflation target to a higher rate of inflation than the current 2% target?
Answer:
Strongly oppose
Confidence level:
Extremely confident
Comment:
Any substantial change in the monetary policy strategy from the part of the ECB has the danger of increasing policy uncertainty which coupled with the macroeconomic uncertainty might lead to disastrous outcomes and the loss of anchoring. Many DSGE models (See, for example, Ascari and Sbordone, JEL 2014) suggest that lifting the inflation target might result into indeterminate equilibria, which in plain words means further instability, especially of inflation. Moreover, a higher inflation target, according to same models, will lead to higher markups which will imply more distortions in the steady state and a lower level of output in the long run.
Question 1: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly state that it will allow inflation to temporarily exceed the 2% target following extended periods of low inflation.”
Answer:
Agree
Confidence level:
Extremely confident
Comment:
Some kind of flexible Inflation targeting with elements of discretion in exceptional times to me seems the most prudent and clear objective for the ECB.
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).
Fiscal Rules in the European Monetary Union
Proposition 1: The existing fiscal rules for European Monetary Union members require revision.
Question 2: Which of the following is the one reform you would choose to improve fiscal rules?
Should the ECB Reformulate its Inflation Objective?
Question 3: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly recognize unemployment and/or economic growth as a secondary aim, secondary to its price stability mandate.”
Question 2: Would you support increasing the ECB’s inflation target to a higher rate of inflation than the current 2% target?
Question 1: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly state that it will allow inflation to temporarily exceed the 2% target following extended periods of low inflation.”
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