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?
Although I agree that one should wait for more certainty about wage growth before raising interest rates, I am not convinced that this is the best thing for the country. With TFP growth particularly low, it is highly likely that we need poorly performing firms to drop out of the market, and they will only do so once their rates of return are below the interest rate. So it is possible that an increase in interest rates would benefit the country even if it led to a temporary loss of jobs.
Trade unions now have a far smaller membership than 40 years ago, making it much more difficult for them to influence wages as significantly as in the pre-Thatcher era. I am not convinced about the influence of the global marketplace; we are only now back again at the same level of trade/GDP as we were in 1914, and that did not then prevent trade unions putting upward pressure on wages. Evidence from migration research indicates little downward effect on wages apart from at the very lowest incomes. Central banks may anchor expectations of inflation but if inflation goes up significantly, then wages will follow. So the emasculation of trade unions is what I believe counts the most.
Transactions costs have obviously been lower, but one interest rate for all is never going to be ideal unless, as in the US, there is fiscal federalism.
The UK's experience of not being a member of the euro while being in the EU was very positive. From a different perspective, Greece might well have benefited from still having the drachma, while being part of the EU.
Lowered real wage growth is almost inevitable in a recession, and in principle should act as an automatic stabilizer to bring the level of employment up to its pre-crisis level.
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).
Labour Markets and Monetary Policy
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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?
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Question 1: Do you agree that a strong labour market is a good indicator of building inflationary pressure?
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Juncker's State of the Union Address
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Question 2: Do you agree that the euro has had more benefits than costs?
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Question 1; Do you agree that euro membership should be compulsory for all EU member states?
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Wages and economic recoveries
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Question 1: Do you agree that lower real wage growth was beneficial for employment levels during the Great Recession?
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