Britain's problem is low productivity and it has been so for decades. Brexit will probably make this even worse given that there is a risk of comparative advantage in financial services and given the possibility of loss of access to the internal market. To address low productivity, Britain should invest in education, infrastructure and in efficient regulation and institutions. It is hard to believe that policy makers are in a strong position to apply an efficient industrial policy free of concerns about voters and current financial interests and given how strongly parties with vested interests will try to impact on the policies.
Question 2: Do you agree that the traditional argument that less central bank independence leads to higher inflation will (still) be relevant over the next 48 months in Western economies?
If I am right above, we won't see much change so it will be impossible to answer the question. But I believe the traditional argument about the relationship between central bank independence and inflation. There might be counter examples to this, but they are counter examples in my opinion.
Carney has been under a lot of pressure in the UK but has withstood the fire quite well and I think it would be difficult for UK policy makers to intervene directly or change the charter of the Bank of England. Such intervention would be associated with substantial loss of credibility. But, on the other hand, the circumvention of the fiscal rules in the UK did not get much press and is ignored by both economists and the press. So perhaps I overestimate credibility losses. The situation for the ECB is less clear although I think it is unlikely that there will be direct political intervention in the ECB's business.
But, who knows? It is very hard to make forecasts especially about the future (Niels Bohr). Things are very uncertain at the moment. We don't know how Brexit will play out, what will happen in the US, and the fate of major European economies such as Italy and France. So, I would not totally eliminate the possibility that changes are coming but I think it is unlikely given the political costs from doing so.
I agree on this. There are clear needs for structural policies to address the disappointing state of many economies where high levels of youth unemployment has effectively sacrificed a generation since the financial crisis, where inequality is high, and where wage and price adjustments are very sluggish. Loose monetary policy cannot substitute for reforms.
The difference in performance between the northern and southern parts of the Euro area cannot be corrected for by loose monetary policy neither can low growth. There is a need to use other policies and probably also to consider whether there is a need for cross-Euro-area transfers. If monetary policy is tightened, it would be important, however, to keep an eye on the state of some of the larger financial institutions in Europe.
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).
A “new” UK industrial strategy ?
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Question 1: Do you agree that the UK needs a new industrial policy?
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The Future of Central Bank Independence
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Question 2: Do you agree that the traditional argument that less central bank independence leads to higher inflation will (still) be relevant over the next 48 months in Western economies?
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Question 1: Do you agree that central bank independence in the Eurozone and the UK will decline over the next 48 months?
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German Council of Economic Experts' view of ECB policy
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Question 2: Do you agree that the ECB's monetary policy masks structural problems of member states?
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Question 1: Do you agree that exceptionally loose monetary policy by the European Central Bank is no longer appropriate?
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