Simon Wren-Lewis's picture
Affiliation: 
University of Oxford
Credentials: 
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:
Strongly agree
Confidence level:
Extremely confident
Comment:
I would go further, and make economic growth the primary target subject to achieving an inflation target within some time horizon.

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

Answer:
Support
Confidence level:
Confident
Comment:
This is a conditional endorsement. I would withdraw this endorsement if either the central bank started using helicopter money, or if the Eurozone fiscal regime allowed fiscal stimulus during recessions.

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:
Strongly agree
Confidence level:
Extremely confident
Comment:
As many have argued, price targeting in a recession makes sense because lower future interest rates provides some stimulus in the recession

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?

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.

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