Morten Ravn's picture
Affiliation: 
University College London
Credentials: 
Professor of economics
Head of Department

Voting history

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)?

Answer:
N/A or Other
Confidence level:
Confident
Comment:
Supply side reforms are tempting but hard to implement given the state of public finances. There is a need to invest in skills and infrastructure but short to medium run returns on such investments are probably low to modest (and it would be wrong to not focus on longer term returns when selecting such projects). Worker retraining, again, might be needed, but should not expected to bring about a large short to medium run boost to the economy. Boosting labor market participation may be more promising, but unemployment is already low, real wages have stagnated in the UK for decades now, and there is probably important selection effects in labor market dropouts. Repairing public finances will not bring about a boost in the short term. There is some low hanging fruit though: Reentering the EU single market. This would boost public finances and the economy.

Euro weakness in 2022

Question 1: What was the main cause for the euro’s decline relative to the US dollar in 2022?

Answer:
Monetary policy differences
Confidence level:
Confident
Comment:
I think there were initial doubts about the ECBs willingness to increase the policy rate in the face of "fragmentation risk" and continuing credit policies. Once the ECB starting signalling that it would increase rates, the Euro recovered. On the real economy side, we now see Europe - Germany in particular - coping much better without russian energy imports than feared by some. In combination, this hopefully signals that the economy will be less prone to a significant downturn than previously thought and that the inflationary pressures will be contained.

Levelling Up Productivity Gaps in the UK

Question 2: Which policies could best help reduce regional productivity disparities?

Answer:
Investment in skill development and education
Confidence level:
Confident
Comment:
See answers to previous question. It is a mix of factors but I believe education is a key factor.

Question 1: What is the primary factor driving regional productivity disparities in the UK?

Answer:
Other or no opinion
Confidence level:
Confident
Comment:
I believe it is a mix of factors rather than a single one. Education and infrastructure differences are important elements and these interact with agglomeration effects (sorting). It takes a well educated workforce for companies to invest in high productivity activities, a well educated workforce is the outcome of education, employment opprtunities, and agglomeration, and without the right infrastructure, the returns on such investments may not be high. But, at the end of the day, without investing in education, I think that addressing other margins will have little effectiveness in addressing the disparity of productivity and living standards.

Prospects for UK Economic Growth

Question 2: What is the most important contribution economic policymakers can make growth in the UK over the next decade? 

Answer:
Other or don't know
Confidence level:
Confident
Comment:
I think a broad suite of policies are needed included some of those mentioned such as investment in human capital, foreign trade, and reforms to welfare systems providing both better social insurance and improved access and incentives to a good life for those coming from more challenging socio-economic backgrounds. There may also be a need for considering regulatory frameworks ensuring a better functioning market economy. On the positive side, the UK economy has some fundamental strengths which it can build upon and which possibly would increase the payoffs of undertaking these policies.

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