Question 2: Which of the following policies would do the most to boost UK GDP in the medium term (over the next decade)?
Answer:
Public investments and R&D subsidies
Confidence level:
Confident
Comment:
This follows from the last part of my last answer.
Question 1: Which of the following will be the most important constraint on UK potential output in 2023, relative to its pre-2019 trend?
Answer:
Brexit
Confidence level:
Confident
Comment:
I think in recent years, I think that Brexit has been the dominant cause of macroeconomic weakness in the UK.
Of course, before 2016 the UK had already shifted to a much lower growth than in the pre-GFC period which has nothing to do with Brexit. I think there are two important considerations in that period. One is the extent to which GDP growth before the financial crisis was potentially artificially high by the easy credit conditions created in response to firms using financial engineering to exploit explicit or implicit government support (as in Malherbe and McMahon, 2022). The other relates to the effect of austerity on provision of public services, and the low level of public investment. I am not aware of a large body of research on these questions so I am somewhat more uncertain about the strength of this second effect. (There is some research on this - one related to public capital stock is Lynde and Richmond, 1993).
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Answer:
ECB policy interest rates will be too low in 2023.
Confidence level:
Confident
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Answer:
The MRO rate will peak above 3.5%.
Confidence level:
Confident
Question 1: How likely is it that peak headline euro area inflation is behind us?
Answer:
Likely
Confidence level:
Confident
Comment:
But the peak being behind us and the inflation challenge for central banks being behind us are not necessarily the same thing. If inflation comes down and settles in the 4-5% range, it still poses a big challenge for policymakers to determine how quickly to bring it back to target.
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).
Causes for Weak Long-Run UK Growth
Question 2: Which of the following policies would do the most to boost UK GDP in the medium term (over the next decade)?
Question 1: Which of the following will be the most important constraint on UK potential output in 2023, relative to its pre-2019 trend?
Prospects for Euro Area Inflation in 2023
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Question 1: How likely is it that peak headline euro area inflation is behind us?
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