Roger Farmer's picture
Affiliation: 
University of Warwick
Credentials: 
Professor of Economics

Voting history

Artificial Intelligence and the Economy

Question 2: What will be the implications of recent developments in AI on unemployment in high income countries over the upcoming decade?

Answer:
Remain unchanged
Confidence level:
Confident

Question 1: What will be the implications of recent developments in AI on global economic growth, as they mature over the upcoming decade?

Answer:
Increase (to 4-6%)
Confidence level:
Confident

Causes for Weak Long-Run UK Growth

Question 2: Which of the following policies would do the most to boost UK GDP in the medium term (over the next decade)?

Answer:
Tax policy and improved policy certainty
Confidence level:
Not confident
Comment:
Once again, all of the policies mentioned here have a role to play. But each of those policies can have both harmful or beneficial effects depending on how they are implemented.

Question 1: Which of the following will be the most important constraint on UK potential output in 2023, relative to its pre-2019 trend?

Answer:
Labor force participation
Confidence level:
Not confident
Comment:
First I would note that ‘potential output’ cannot be defined in the absence of a heavy dose of economic theory. Second, there is no unique reason why this constructed concept is lower in the UK than in other countries: all of the reasons mentioned here have some role to play. Finally, potential output is not the same as output per worker which is also lower in the UK than many other countries and it is the fall in output per worker that is the more worrying statistic.

Prospects for Euro Area Inflation in 2023

Question 3:  Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?

Answer:
ECB policy interest rates will be too high in 2023.
Confidence level:
Confident
Comment:
My answer is based on the supposition that rates peak ABOVE 3.5%. Long term real interest rates appear to be falling world-wide as a consequence of demographics and slow-down in productivity growth. I am concerned that a path of interest rates that goes beyond the current planned hike to 3.5% will be overkill and will trigger a recession. Asset markets already appear nervous. Further rate hikes will sppok them further and that will not be good for employment and growth.

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