Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Answer:
Expanded EU budget (with possible borrowing at the EU level)
Confidence level:
Confident
Comment:
As we have argued (A. Bénasy et al. VoxEU 6 & 20/04/20), I will use several instruments, but if I had to signal one I would have a Recovery Fund, based on Expanded EU budget, but managed outside the EC, possibly EIB.
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Answer:
5-10% of GDP
Confidence level:
Confident
Comment:
The problem is that no matter the number is not significant without knowing that it would be: 1) transfers from EU (enlarged) budget; 2) new EU or EA debt, backed by the budget (i.e. all MS); 3) debt that would be specific countries liabilities (e.g. ESM, SURE), or 4) Credit guarantees (EIB). If it was mostly (1) a much smaller figure would be needed, although (3) and (4) should play their role too.
Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?
From the perspective of the labour market there is no reason to increase interest rates, from the perspective of still indebted economies in need to rebuild their capital even less. Nevertheless, from the international perspective of capital markets one also needs to take into account what others do.
If by "a strong labour market" means "low unemployment" I disagree in two respects. First, "low unemployment" is not a good indicator of a labour market being strong, high employment rate is a better one and even better if it takes into account of which type of employment (e.g. stable, productive, etc.). Second, even with a better measure, the causality effect on 'inflationary pressure' is weak theoretically and empirically. In any case, and in almost any measure of 'strength", in many European countries we are far from having "strong labour markets", unless 'strong' means burdensome...
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).
The Eurozone COVID-19 Crisis: EU Policy Options
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Labour Markets and Monetary Policy
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Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?
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Question 1: Do you agree that a strong labour market is a good indicator of building inflationary pressure?
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Bitcoin and the City
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Question 2: Do you agree that the regulatory oversight of cryptocurrencies needs to be increased?
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