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

Voting history

Should the ECB Reformulate its Inflation Objective?

Question 3: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly recognize unemployment and/or economic growth as a secondary aim, secondary to its price stability mandate.”

Answer:
Disagree
Confidence level:
Very confident
Comment:
First, the "economic policies in the Union" are broader than unemployment. Especially important for a central bank is the integrity of the euro-area, financial stability, and the capital market union. Second, in practice, the ECB has shown its current mandate is consistent with acknowledging trade-offs between inflation and real activity. Third, such a strong shift to unemployment as a dominant goal (as the Fed set in its review) risks re-living the mistakes of the 70s.

Question 2: Would you support increasing the ECB’s inflation target to a higher rate of inflation than the current 2% target?

Answer:
Oppose
Confidence level:
Very confident
Comment:
Structural changes suggest an increase in the optimal target of, at most, maybe 0.5-1%. The benefits seem to be outweighed by the large costs of communicating this change to a public for whom, at the individual level, this has negligible welfare impact. Moreover, it seems reckless to risk a regime change that breaks the virtuous inattention cycle we have been in for more than a decade (people expect 0-2%, we get 0-2% regardless of shocks and policy constraints).

Question 1: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly state that it will allow inflation to temporarily exceed the 2% target following extended periods of low inflation.”

Answer:
Agree
Confidence level:
Very confident
Comment:
In Sintra in 2019, President Draghi stated: "our policy aim was fully symmetric, and it was symmetric around the level that we had established in 2003: below, but close to, 2%. It is achieving this aim over the medium term that steers our policy decisions.” The ECB does not need to change this, but simply explain that medium-term means: on average over the next 4-6 years. And perhaps remove the "below".

The Economic Cost of School Closures

Question 3: To what extent will school closures increase gender inequality due to unequal gender distribution of the burden of school closures?

Answer:
By a large amount but temporarily
Confidence level:
Not confident at all
Comment:
The two studies mentioned in the question are also the only two that I know in this area. My readings of them is that it depends on how labor markets will adjust to the pandemic, and it is too early to tell what will be the medium-run persistent impact. At the same time, they suggest that there is a large immediate impact both through child care closures and through the economic impact on services sectors that have more females employed.

Question 2: To what extent will school closures increase inequality in human capital development?

Answer:
To a small degree but persistently
Confidence level:
Not confident
Comment:
The estimates that I know of are understandably more imprecise than the ones on growth and income that I described in the previous answer, but still the impact would be small. More worrying is that the models of inequality that I am familiar with tend to suggest effects that are very persistent.

Pages