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

Voting history

Towards a High-Wage, High-Productivity Economy

Question 2: What is your evaluation of the following statement: “A well-designed government-stipulated wage increase can lead to higher productivity”?

Answer:
Disagree
Confidence level:
Very confident
Comment:
Depends on what you mean by "well-designed". In the UK context, and given current debates on the topic, the design that would emerge is most likely to not significantly increase productivity.

Question 1: Which of the following statements most closely reflects your understanding of the relationship between productivity and wages.

Answer:
Wage increases can in some cases increase long-run productivity
Confidence level:
Very confident
Comment:
It depends on how you interpret productivity. If labor productivity, as measured by output per hour or worker, then a clear yes: the labor share of income is approximately constant in the long run, so higher wage is one-to-one correlated with higher average product of labor. If total factor productivity, then no, as most economic mechanisms for an association would not survive free entry in the long run.

Post-Covid Fiscal Rules for the UK

Question 3: Which of the following variables should fiscal rules target to best improve the performance of the UK macroeconomic policy going forward.

Answer:
No opinion
Confidence level:
Confident
Comment:
A combination of the options you listed. As important is to take a probabilistic approach that weighs different scenarios for the evolution of a few key variables outside the government's control (like interest rates)

Question 2: What impact has the sequence of fiscal rules adopted in the UK since 1997 had on the conduct of fiscal policy in the UK?

Answer:
Improved
Confidence level:
Confident
Comment:
Fiscal rules usually strengthen the credibility of public finances, raising fiscal space and lowering the chances of a debt crisis (https://www.imf.org/en/Publications/FM/Issues/2021/10/13/fiscal-monitor-october-2021). Given the shocks and state of public finances during 2010-12, I would expect these average effects to have been particularly relevant for the UK

Question 1:  What impact has the sequence of fiscal rules adopted in the UK since 1997 had on the level of UK public debt? 

Answer:
Reduced
Confidence level:
Not confident
Comment:
Bak in time, part of the motivation for introducing the rules was to limit over-spending and over-borrowing, so prima facie they would be expected to lower the debt relative to the counterfactual. But, I am not confident on their effectiveness in reaching this goal.

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