Question 2: What is the best way to (eventually) reduce public deficits and debt?
Answer:
Perpetuities
Confidence level:
Confident
Comment:
Concern for high debt levels (as opposed to high deficits) is overblown.
Question 1: How urgently should the UK government address the rise in public debt?
Answer:
There is no need to take or announce any budgetary actions to reduce the deficit or the public debt until the end of the pandemic
Confidence level:
Confident
Comment:
I favor monetary financing in the short run that will, and should, lead to price increases. That view is conditioned on a policy in which large deficits are temporary.
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Answer:
Joint borrowing by member states (e.g. Coronabonds)
Confidence level:
Confident
Comment:
A number of solutions are possible. All of them involve greater integration and the creation of a US style federal Europe. My point prediction is that this will not happen.
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Answer:
>20% of GDP
Confidence level:
Extremely confident
Comment:
The EU desperately needs a mechanism to allow for permanent fiscal transfers from rich to poor regions. No other large monetary union anywhere in the world operates without regional transfers. The alternative more likely outcome is the breakup of EMU. It’s crunch time for the European experiment.
Question 3: Which would be the maximal public debt you would be willing to tolerate if used effectively (as in your answers to 1 and 2 above) to support an economic recovery?
Answer:
>140% of GDP
Confidence level:
Extremely confident
Comment:
In the current low interest rate climate, there should be no limit on the size of a temporary fiscal expansion as long as it is financed by money creation. This is NOT an argument in support of modern monetary theory. The stipulation that this would be a temporary measure, designed to preserve employment relationships, is critical. Inflation is caused by growth in nominal demand, fueled by ever increasing nominal debt. Now is NOT the time to be concerned about nominal debt.
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).
COVID-19 and UK Public Finances
Question 2: What is the best way to (eventually) reduce public deficits and debt?
Question 1: How urgently should the UK government address the rise in public debt?
The Eurozone COVID-19 Crisis: EU Policy Options
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Covid-19: Economic Policy Response
Question 3: Which would be the maximal public debt you would be willing to tolerate if used effectively (as in your answers to 1 and 2 above) to support an economic recovery?
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