Martin Ellison's picture
Affiliation: 
University of Oxford
Credentials: 
Professor of economics

Voting history

Monetary Policy and Inequality

Question 2: What role should inequality play in the monetary policy decisions (interest rate policy and quantitative easing)?

Answer:
Minimal role
Confidence level:
Very confident

Question 1: How large is the impact of monetary policy on the joint distribution of income and wealth?

Answer:
Small
Confidence level:
Confident

Central Bank Digital Currency for the UK

Question 2: What effect will the introduction of a CBDC have on UK banks?

Answer:
No or little effect
Confidence level:
Confident
Comment:
Outside of a financial crisis, there is limited appetite to “rock the boat” with financial innovation. This means that the role of a newly-launched central bank digital currency will, by design, likely to be limited. Radical proposals are unlikely to fly, so it is difficult to see sufficient disruption to upend 800 years of traditional banking.

Question 1: How beneficial would it be to the UK economy for the Bank of England to introduce a central bank digital currency in some form in the upcoming decade?

 

Answer:
Neither beneficial nor harmful
Confidence level:
Very confident
Comment:
Digital currencies will only be a sideshow in the next decade. Debit cards became available in the 1980s and 1990s, but it was not until 2018 that payments by debit card exceeded those by cash in the UK. Even if the Bank of England introduces a central bank digital currency in the next decade, it will take time before it becomes an accepted part of the financial market landscape.

The “Spend Now, Tax Later” Budget

Question 2: To what extent will the “super deduction” aide the UK’s recovery from the Covid recession?

Answer:
Moderately
Confidence level:
Confident
Comment:
There will be some effect as investment plans are brought forward, but there’s a feeling of “rearranging the deckchairs on the Titanic”. It may be that bringing investment forward uses up investment opportunities from the future. Summers (2017) (https://www.journals.uchicago.edu/doi/pdf/10.1086/690245) seems to be making this argument when he says “[t]o some extent, low rates work to stimulate demand by pulling investment forward. So today’s reduction in interest rates reduces tomorrow ‘s neutral rate by pulling forward investment”. It suggests that the super reduction may reduce R* in the future.

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