Question 1: The Chancellor forecasts a cyclically adjusted fiscal surplus by 2017-18 and in cash terms by 2019-20. Do you agree that this planned path of fiscal consolidation is appropriate?
My view is that the pace of fiscal consolidation is somewhat too fast, given both the OBR and consensus forecasts see UK growth slowing somewhat, while global growth remains sluggish. However, if the current central forecasts are indeed accurate, the macroeconomic impact will be relatively modest. The more significant objections to the government's fiscal plans are two-fold. First, they are very risky. There is clearly a significant chance that, for domestic or international reasons, will be considerably weaker. In that case the planned consolidation will be very damaging, and the government's fiscal framework may well make things worse not better (see Q2). Second,the plans rely too much on spending cuts (as well as some not particularly efficient tax increases), in order to finance unnecessary and often regressive tax cuts (for example, to inheritance tax). While this does not have significant direct macroeconomic consequences, it may well lead (as with tax credits/Universal Credit) to decisions which are likely to be quite damaging over the medium term.
In current circumstances I think the impact on market interest rates/market behaviour and hence on the effectiveness of eurozone QE is likely to be relatively modest.
The issue is less about the direct impact (which in current circumstances is likely to be marginal) than the signalling effect: the structuring, and the internal debate and compromise within the ECB it reveals, clearly implies that there are possible circumstances in which monetary union could be reversed.
Do you agree that, on balance, the implementation of the agreement as outlined in media reports will have a non-trivial negative effect on Greek GDP?
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Answer:
Neither agree nor disagree
Confidence level:
Not confident
Comment:
It depends on counterfactual. Relative to disorderly default and political crisis, deal is preferable.However a much more comprehensive deal with less contractionary fiscal policy, substantial debt write off, and more product market and public administration reform would be greatly preferable
Question 2: Do you agree that the benefits of reforming the monetary system to allow materially negative policy interest rates outweigh the possible costs?
The risk of another financial crisis in the reasonably near future (say 10 years) are not quantifiable, but seem to me significant. While other policy tools are available (fiscal stimulus, quantitative easing, helicopter money) unfortunately governments seem unwilling to make use of them to the extent most economists would recommend. Given these unfortunate political or political economy constraints, there may well be circumstances in which negative interest rates might be a useful policy tool. While there would no doubt be costs in planning now for possible implementation, the very large costs that have resulted from the inadequate/misguided policy response to the last crisis suggest that from an insurance perspective they would be good value for money.
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).
Autumn Statement & Charter for Budgetary Responsibility
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Question 1: The Chancellor forecasts a cyclically adjusted fiscal surplus by 2017-18 and in cash terms by 2019-20. Do you agree that this planned path of fiscal consolidation is appropriate?
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ECB's quantitative easing
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Question 1:
Do you agree that the design of the ECB's QE programme reduces its effectiveness?
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Question 2:
Do you agree that the structure of the ECB's QE programme makes the Eurozone more fragile and increases the risk of one country leaving the euro?
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Deal or no deal: The Greece standoff
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Question 1:
Do you agree that, on balance, the implementation of the agreement as outlined in media reports will have a non-trivial negative effect on Greek GDP?
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Monetary policy and the zero lower bound (ZLB)
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Question 2: Do you agree that the benefits of reforming the monetary system to allow materially negative policy interest rates outweigh the possible costs?
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