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

Voting history

Should We Worry About Post-Covid Inflation?

 Question 1: Which of the following scenarios is most likely to hold on average for most of the upcoming decade?

Answer:
The BoE will be unable to avoid inflation falling below its current target
Confidence level:
Confident

Lockdowns and UK Economic Performance

Question 3: Using not only the policy tools that have been part of the UK policy mix thus far but also policy tools implemented in other countries, to what extent does the government face a tradeoff between saving lives and preserving livelihoods? 

Answer:
Small tradeoff
Confidence level:
Confident

Question 2: How much will the new lockdown measures introduced on Thursday November 5 hurt UK economic activity this year relative to a counterfactual with the milder measures adopted over the summer?

Answer:
Small damage
Confidence level:
Confident

Question 1: How much of the decline in GDP experienced to date would have been avoided in the absence of any lockdown measures or other policy interventions (such as fiscal support)?

Answer:
A moderate portion of the decline (around a half)
Confidence level:
Not confident

Should the ECB Reformulate its Inflation Objective?

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

Answer:
Strongly support
Confidence level:
Confident
Comment:
It’s unclear whether raising the inflation target is a silver bullet. Compared with the “allow inflation to exceed 2% for a period after low inflation” proposal in the previous question, it does though have the benefit of being a bold move. In my own research on the Ends of 30 Big Depressions (with Kevin O’Rourke and Sang Seok Lee, https://www.nber.org/papers/w27586), we argue that abandoning the gold standard was instrumental in ending the Great Depression in many countries. The turnaround in inflation expectations (and subsequent economic recovery) only started when many countries left the gold standard. Something equally dramatic may be needed to get inflation expectations up. Changing the inflation target could be a big enough policy change to make it work.

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