John Hassler's picture
Affiliation: 
Institute for International Economic Studies (IIES), Stockholm University
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:
No different
Confidence level:
Confident
Comment:
It is hard to see that the fundamental causes of growth, namely the creation of new ideas and the ability to adopt and exploit these for commersial and social use, are affected in the long-run by the coronacrisis.

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.”

Answer:
Strongly agree
Confidence level:
Extremely confident

Question 2: Would you support increasing the ECB’s inflation target to a higher rate of inflation than the current 2% target?

Answer:
Support
Confidence level:
Confident
Comment:
The neutral real interest rate has fallen continuously over several decades and is expected to stay low for a long time. It is now substantially lower than when inflation targets were introduced. The neutral nominal interest rate is the neutral real rate plus the inflation target. An inflation target as low as 2 percent therefore implies that actual central bank policy rates often will have to be negative and occasionally at their lower bands. A higher inflation target would ease these problems.

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:
Strongly agree
Confidence level:
Very confident
Comment:
Allowing a temporary overshoot and communicating it in advance has two important benefits. First, real interest rate decrease in recessions. Second, the long run price level becomes more predictable.

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

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