The skepticism about the Euro is understandable when one looks at the common currency in purely economic terms, benefits and costs. It is only when we start taking into account the political benefits of bringing 19 diverse countries in Europe closer together, building bridges and shared understanding, embedding peace and cooperation in the psyche of European citizens, that the cost benefit analysis becomes clearer. One needs to look at the costs of two world wars to begin to appreciate the rewards from peace and cooperation. Yes, there are economic costs to bringing divergent economics miles together but in no way are the economic costs larger than the political benefits of peace and cooperation. It's time the economic mica profession wakes up to political realities.
Notwithstanding all its imperfections, the Euro remains the only way forward for Europe to continue to process of further economic and political integration and embed shared common values, including democracy, respect for human rights, rule of law and diversity throughout the continent. Without further intergration, the risks of rising nationalism and populism pose a serious threat. Further economic convergence is needed and better social safety nets. Sooner or later some degree of fiscal federalism will be needed and the use of the common currency makes all aspects of integration a lot easier. It also makes Europe a more powerful force internationally. The momentum needs to be maintained, so that in one or two generations, citizens of Europe will not know any alternatives. At that stage Europeans will begin looking like the United States. Does anyone today think that California or Florida could have their own currencies?
Question 2: Do you agree that the different behaviour of UK real wages relative to Eurozone wages during the Great Recession is in large part due to the UK having different labour market policies?
To explain this one needs to also look at differences in migrant worker flows within the EU. It could be that the UK attracted more Eastern European workers to low paid jobs, helping to depress real wages and achieve higher growth, at the expense of domestic workers. Low paid jobs done by lots of migrant workers are not a good recipe for sustainable growth and social cohesion.
Neoclassical labour market, partial equilibrium, models where employment and real wages are inversely related are too simplistic and far too narrow. A low wage economy is likely to be a stagnating economy with low productivity, low effort, insufficient incentives for education and training, low aggregate demand, little investment and high unemployment. It's a bad macroeconomic equilibrium with many negative social and political consequences and disenfranchised voters. It's a world where populist politicians rise to power and voters who think it can't get worse vote for crazy policies like Brexit. In other words, a world based on myopic models with disastrous outcomes.
Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?
They are already playing a role, by complementing hard data with survey views, at least when it comes to monetary policy. I am not convinced that we need to attach even more weight to them, those who advocate their great use are very obviously conflicted (they have built their careers on them, if not their egos).
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).
Juncker's State of the Union Address
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Question 2: Do you agree that the euro has had more benefits than costs?
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Question 1; Do you agree that euro membership should be compulsory for all EU member states?
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Wages and economic recoveries
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Question 2: Do you agree that the different behaviour of UK real wages relative to Eurozone wages during the Great Recession is in large part due to the UK having different labour market policies?
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Question 1: Do you agree that lower real wage growth was beneficial for employment levels during the Great Recession?
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Happiness and well-being as objectives of macro policy
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Question 2: Do you agree that quantitative well-being analysis should play an important role in guiding policy makers in determining macroeconomic policies?
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