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

Voting history

Monetary Policy and Inequality

Question 2: What role should inequality play in the monetary policy decisions (interest rate policy and quantitative easing)?

Answer:
No role
Confidence level:
Very confident
Comment:
The MPC is unelected. If the Bank becomes involved in highly politicized decisions including, but not limited to, asset purchases designed to redistribute income and wealth, there is a danger of losing the current political consensus for Bank independence. I am strongly opposed to extending its current mandate.

Question 1: How large is the impact of monetary policy on the joint distribution of income and wealth?

Answer:
Large
Confidence level:
Very confident
Comment:
Interest rate decisions have large measurable effects on asset values. Since both housing wealth and stock market wealth are very unequally distributed, these policy decisions also have large impacts on the wealth distribution. The impact on income is also significant but smaller in magnitude.

Central Bank Digital Currency for the UK

Question 2: What effect will the introduction of a CBDC have on UK banks?

Answer:
No or little effect
Confidence level:
Confident
Comment:
I see no merit in the argument that access of private individuals to digital state money would harm the existence of the private banking system. Private banks will evolve, as they always have, to provide intermediation services in different ways. It is fallacious to believe that commercial banks need deposits to function. There are many other ways of providing the maturity transformation and risk intermediation services that characterize the activities of modern banks.

Question 1: How beneficial would it be to the UK economy for the Bank of England to introduce a central bank digital currency in some form in the upcoming decade?

 

Answer:
Beneficial
Confidence level:
Confident
Comment:
Digital currencies are here to stay. If private crypto currencies begin to supersede the use of national currencies they will erode the ability of central banks to fulfill their twin roles of price stability and maximum sustainable employment. National digital currencies, and the state monopolization of this function, are the logical next step in the evolution of money.

Fiscal Rules in the European Monetary Union

Question 2: Which of the following is the one reform you would choose to improve fiscal rules?

Answer:
Re-nationalization of fiscal discipline
Confidence level:
Not confident

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