Michael McMahon's picture
Affiliation: 
University of Oxford
Credentials: 
Professor of Economics

Voting history

Towards a High-Wage, High-Productivity Economy

Question 2: What is your evaluation of the following statement: “A well-designed government-stipulated wage increase can lead to higher productivity”?

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
In general I disagree - aggregate wage increases would not typically raise aggregate productivity. And the best lever to raise take-home wages are income tax cuts which have been used but I think most studies emphasise the link between top tax rates, which would only affect take-home pay of the richest, and productivity. But the openness of the statement means that perhaps one could design some instances where, eg, higher wages entice people back into the labour market bringing skills and experience that raise productivity at some local (regional or industrial) level.

Question 1: Which of the following statements most closely reflects your understanding of the relationship between productivity and wages.

Answer:
Wage increases can in some cases increase long-run productivity
Confidence level:
Confident

ECB Monetary Policy and Catch-up Inflation

Question 2: Which of the following policies is the most desirable to meet the ECBs objective to achieve its mandate of “price stability” as you understand this term.

Answer:
Average inflation targeting
Confidence level:
Confident

Question 1: To what extent do you agree with the following statement? “The European Central Bank should systematically allow for inflation to exceed its target to compensate for periods of below target inflation.”

Answer:
Agree
Confidence level:
Confident

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:
Confident
Comment:
To the extent that inequality changes the transmission of policy or shocks to the economy, it is important for monetary policymakers to be aware of developments including those that come from its own past actions. Should the central bank try to affect inequality directly? I don't think so. The central bank does not have good tools to deal with inequality; fiscal policy can be more targeted and it is important that the objectives of redistributive policies reflect the preferences of the electorate.

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