Nicholas Oulton's picture
Affiliation: 
London School of Economics
Credentials: 
Senior Visiting Research Fellow

Voting history

Euro Area Deflation and Risk for UK Economy May 2014

Question 1

Do you agree that there is a significant risk of a sustained deflation across the Euro Area in the coming two years?

Answer:
Disagree
Confidence level:
Not confident
Comment:
There may be a significant risk of inflation at a bit below 1% in the euro area for the next year. This would make the real rate of interest actually paid by firms higher than desirable and so impede the euro area recovery. The inflation/deflation dichotomy is not the real issue though obviously if deflation were to occur this would make real interest rates even higher.

Responsible long-term fiscal policy (pilot survey)

First question:

To help ensure that advanced country governments have sufficient flexibility to respond to future crises, it is important that finance ministries aim for a ratio of public debt to GDP that is substantially less than 60% in normal times.

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
In the UK the debt-GDP ratio averaged about 40% pre-crisis but this turned out to be too low to leave adequate room for responding to the crisis.

Second question:

To help ensure that advanced country governments pursue responsible fiscal policies, countries should adopt formal rules for limiting structural deficits, which are supported by primary legislation or constitutional reform.

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
I strongly agree with the proposition though I am no nearly so confident that enforceable rules can be put in place. It is very difficult to stop people making promises when they won't be around to be held to account when the promises come due. This is true in the private as well as the public sector.

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