Ricardo Reis's picture
Affiliation: 
London School of Economics
Credentials: 
AW Phillips Professor of Economics

Voting history

The ECB’s Green Agenda

Question 2: Would you support changing the ECB’s mandate to incorporate the EU’s target of carbon neutrality by 2050, if such a change is deemed legally necessary to adopt your preferred approach?

Answer:
Other or no opinion
Confidence level:
Not confident
Comment:
It is not legally necessary to adopt my approach to question 1, so the "if" is not satisfied. More generally, I think incorporating carbon targets for central banks may eventually be a good idea. But I'm not sure how I would do it right now in an effective way, given what I know of research in the area. There are some good ways of changing the ECB's mandate to incorporate this that I would support, and many bad ones that I would not support.

 Question 1: Which of the following actions is the most advisable approach for European Central Bank to address the environmental impact of its bond-purchasing policies?

Answer:
Aiming for market neutrality
Confidence level:
Confident
Comment:
This may change with its mandate review but, right now, given the goals of the bond-purchasing programs and the targets of the ECB, market neutrality seems to be the right answer. But, and this is important, defining and measuring market neutrality is not straightforward. The Papoutsi et al research mentioned in the question argues that current measures of market neutrality are flawed, and biased against green investments. I think there are further reasons why this is so, including an over-reliance on credit rating agencies. So, aim for market neutrality, but measure better what this is, and doing so may well lead to buying more green bonds than in the current portfolio.

Should We Worry About Post-Covid Inflation?

Question 2: Which of the following will be the greatest inflationary (or deflationary) force facing the UK economy?

Answer:
Past monetary policy decisions and other monetary factors
Confidence level:
Very confident
Comment:
I wanted to pick two: public debt and monetary factors, as they are tightly linked.

 Question 1: Which of the following scenarios is most likely to hold on average for most of the upcoming decade?

Answer:
Inflation will be at the current target rate
Confidence level:
Confident
Comment:
I see a large risk of high inflation; but a likewise high risk of near deflation. Overall, I see the two roughly balancing out, so on average I think inflation may well be at current target rate. But, perhaps more relevant, I put a quite high probability that it will not be there. (I also think there is a good chance that the target will change.)

Post Covid-19 Potential Output in the Eurozone

Question 2: How much lower will the potential growth rate of GDP in the Eurozone in 2025 be due to Covid-19 relative to pre-Covid forecasts?

 

Answer:
No different
Confidence level:
Not confident
Comment:
Forecasting is hard. For growth rates, using a random walk, so expecting no difference seems a good way to reflect how not confident I am.

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