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

Voting history

Asset Prices and Monetary Policy

Proposition 1: The Bank of England’s mandate should be officially modified to take housing or other asset prices into account in its monetary policy decisions.

Answer:
Disagree
Confidence level:
Confident
Comment:
Though I disagree that house prices (or other asset prices) should be the target, I acknowledge that there is a difficulty for central bank. The general public that they serve see house prices as part of inflation. And recent years have seen house prices rising quite strongly while CPI inflation, the central bank target, has been quite subdued.

The ECB’s Green Agenda

Question 2: Would you support changing the ECB’s mandate to incorporate the EU’s target of carbon neutrality by 2050, if such a change is deemed legally necessary to adopt your preferred approach?

Answer:
Yes
Confidence level:
Confident
Comment:
There is a need to make many reforms to the EU treaties to bring macro-policymaking more fit for purpose in a changed economic environment; ECB mandate adjustments could and should form part of those adjustments.

 Question 1: Which of the following actions is the most advisable approach for European Central Bank to address the environmental impact of its bond-purchasing policies?

Answer:
Banning bond purchases from industries with no clear plan to get to zero emissions by 2050
Confidence level:
Confident
Comment:
I think there is an argument for starting with a move to a greener balance sheet position. An initial move to market neutrality, even if that initial move is gradually achieved, would be a fine starting point but ultimately it is likely something further should be done (even if it is not a major impact on QE or monetary transmission).

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:
No tradeoff at all
Confidence level:
Confident
Comment:
I would even think that the two are complementary; to save the economy, action will need to be taken to suppress the virus and save lives.

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:
The economy will benefit from lockdown
Confidence level:
Very confident

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