Question 2: Which aspect of the economy poses the greatest risk for a slow recovery?
Answer:
Consumer demand
Confidence level:
Confident
Comment:
By ending lockdown too early in the UK, there is a real risk that a significant proportion of consumers will not resume social consumption, and that may lead to persistent unemployment and bankruptcies.
Question 1: How quickly will the economy rebound (e.g. to the pre-pandemic trend) once the COVID-19 pandemic has been contained and absent major policy interventions?
Answer:
The economy will rapidly return to its pre-crisis growth trend, but there will be a permanent effect on the level of GDP
Confidence level:
Confident
Comment:
A key point not emphasised enough is that the answer depends critically on how well the pandemic is managed by the government. A V shaped recovery is possible if the government gets its pandemic management right, but if it fails to lockdown quickly, or ends lockdown to early, (both of which are true in the UK) then scarring effects will be significant.
Question 2: What is the best way to (eventually) reduce public deficits and debt?
Answer:
Tax increases
Confidence level:
Confident
Question 1: How urgently should the UK government address the rise in public debt?
Answer:
Budgetary policy should not be used to address public deficits and debts in the foreseeable future
Confidence level:
Extremely confident
Comment:
Only when the economic recovery from the pandemic is complete, and as a result interest rates are rising, will it be the time to consider what action, if any, to take on budgetary policy. In particular concerns about the deficit should not be used to prevent any fiscal stimulus that may be required to get the economy going again once the pandemic is over.
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?
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).
Will COVID-19 Cause Permanent Damage to the UK Economy?
Question 2: Which aspect of the economy poses the greatest risk for a slow recovery?
Question 1: How quickly will the economy rebound (e.g. to the pre-pandemic trend) once the COVID-19 pandemic has been contained and absent major policy interventions?
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?
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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