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

Voting history

Brexit: the potential of a financial catastrophe and long-term consequences for the UK financial sector

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Question 1: Do you agree that there would be substantial negative long-term consequences for the UK financial sector if the UK were to leave the EU?

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Answer:
Agree
Confidence level:
Confident
Comment:
The eurozone would almost certainly use Brexit as an opportunity to impose new regulations which discriminate against London in euro-related transactions.

The future role of (un)conventional unconventional monetary policy

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Question 2:  Do you agree that central banks should operationalise the use of these alternative tools of unconventional monetary policy for use either in the near term, or in the future, as economic conditions warrant?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
In the UK case we have in effect already operationalised the use of helicopter money sine the period of active QED coincided with a large budget deficit. In other words, pensions and welfare benefits were being paid for by printing money, at least in part. So I don't see any great issue of principle here. We might as well retain the option of doing this again, should it prove necessary

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Question 1: Do you agree that central banks should continue to use the unconventional tools of monetary policy deployed in response to the global financial crisis as part of monetary policy under normal economic conditions?

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Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
Since we are likely to be near the zero lower bound for some considerable time, it obviously makes sense to retain the option of more QE, if and when needed.

National Living Wage and the UK economy

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Question 2: Do you agree that the new NLW will have a muted effect on wages and prices?

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Answer:
Agree
Confidence level:
Confident
Comment:
The rate of inflation will be determined by monetary policy and any external shocks which the MPC decides to accomodate, not by domestic shocks like the NMW.

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Question 1: Do you agree that the new National Living Wage is likely to lead to significantly lower employment?

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Answer:
Disagree
Confidence level:
Not confident
Comment:
The NMW will be 34% higher in 2020 than is the current minimum wage. Assuming the Bank of England hits its 2% inflation target over 2015 to 2020, that is an increase of 22% in real terms. But if the productivity of minimum wage workers rises at 2% and the Bank hits its target, then the NMW need have no effect on employment. Most observers are pessimistic about productivity but I remain relatively optimistic. Howeverit is possible that while average productivity ries at 2% that of low wage workers will rise more slowly.

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