Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).
Answer:
Agree
Confidence level:
Very confident
Comment:
There are many linkages between the Chinese and UK economy, including trade, direct investment, correlation of policies, and global financial cycles. While it is possible that these might offset each other, it seems more likely that they would not when it comes to UK growth. If so, the state of the economy would be different, so policy variables would likely have to differ as well.
Do you agree that the Chinese economy is likely (say more than 50% probability) to maintain in the medium term (say, for at least ten years) a rate of annual growth exceeding 6%.
Economic science is very far from being able to predict growth, especially over the medium term, with any confidence. Moreover, depending on how much of China's recent growth is due to Solow-type convergence, versus miracles (http://www.nber.org/papers/w11528) one could expect past growth to persist or not.
On the one hand, the structure of the program protects the solvency of the ECB and it prevents a redistribution of resources among member states, which is against its mandate but which the ECB has been pressured and/or tempted to do. So, insofar as the euro is irreversible, then the structure makes the Eurozone more robust. But, on the other hand, if we consider the possibility that one country may choose to leave, and that TARGET II and/or ELA balances would be reneged on, then this arrangement encourages local banks/citizens/speculators to run on their local banks and force an exit.
While there is compelling evidence that QE has been effective in the recent crisis at reducing interest rates, the channels through which it operated are still being figured out. There is exciting research on the topic, but still not a definite conclusion. Therefore, concluding whether the particular approach taken by the ECB will improve or hurt that effectiveness is not something that I think we can confidently answer.
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).
China’s growth slowdown: likely persistence and effects
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Question 2:
Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).
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Question 1:
Do you agree that the Chinese economy is likely (say more than 50% probability) to maintain in the medium term (say, for at least ten years) a rate of annual growth exceeding 6%.
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ECB's quantitative easing
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Question 2:
Do you agree that the structure of the ECB's QE programme makes the Eurozone more fragile and increases the risk of one country leaving the euro?
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Question 1:
Do you agree that the design of the ECB's QE programme reduces its effectiveness?
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