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

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:
Inflation will be at the current target rate
Confidence level:
Confident
Comment:
The increase in public debt and in the broader montary base combined with pressures on the sterling exchange rate (due to lack of inward FDI flows in the aftermath of Brexit) probably means that inflation will come up although I do not see this happening within a short horizon. To the extent that the BoE retains its independence, I would have thought that inflation could be kept at or close to its target.

Lockdowns and UK Economic Performance

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
Comment:
Again, this came too late, the signs were there for a few weeks before the government eventually moved for a national lockdown. It should have been done earlier - it would have been more effective and induced smaller costs. But not doing anything would just have meant even stronger measures becoming necessary later and with larger economic costs. Therefore, relative to doing nothing, this is benefitting the economy.

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:
GDP would have been lower absent lockdowns
Confidence level:
Very confident
Comment:
The lockdown came too late and therefore had to be extended for too long. The policy communication at the start of the pandemic was terrible. It was claimed that the UK had the best means for fending off the pandemic off in the world, a claim that clearly has been shown wrong. The PM telling that he shook hands with everyone in a hospital with Covid-19patients was very confusing to the population. The disregard for the lockdown regime of people in or close to government sowed distrust in the population. A faster, better communicated, and more decisive lockdown could have meant significantly smaller costs to health and the economy both in the short run and in the longer run.

The Economic Cost of School Closures

Question 2: To what extent will school closures increase inequality in human capital development?

Answer:
To a small degree but persistently
Confidence level:
Confident
Comment:
My answre is based on the assumptions that: (a) The duration of school closures does not stretch into the next academic year, and (b) mitigating policies. Without these, effects could be large. Why is there an impact on inequality? Because children from less priviledged backgrounds will have worse physical facilities (accomodation, computers etc.) and their parents will be less able to aid their educational needs than children from more priviledged backgrounds. Schools should be opened to cater for the children from the most under privileged backgrounds including children whose parents have health problems, children without approriate accomodation etc.

Question 3: To what extent will school closures increase gender inequality due to unequal gender distribution of the burden of school closures?

Answer:
To a small degree but persistently
Confidence level:
Confident
Comment:
It's clear that women have carried much more of the burden during the pandemic. This goes for many issues including unequal distribution of the responsibility of taking care of children and their education. This will harm their careers and increase gender inequalities. Again, mitigation has to take place. Policy needs to address the issue. Without that, and in case the pandemic continues for long, effects could be large. With mitigating policies, I think there will still be effects on women with small children for a long time. There is evidence that parental leave harms womens - but not mens - earnings persistently. The impact of the pandemic should be similar to such estimates.

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