Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?
There are many reasons for this, including the point made in answering the previous question. Most important, however, is the asymmetry of costs if policy is wrong. Tighten too late and we get a modest inflation overshooting. Tighten too early and, because inflation is sticky near zero, it may be years before central banks realise their mistake, leading to very large welfare losses.
There are many reasons why the NAIRU may have fallen over the last decade. One that is seldom talked about is productivity. Productivity growth in many countries has been low since the financial crisis. However it seems unlikely that this reflects an equivalent decline in fundamental technical progress. Instead what seems more likely is that many firms have put off investment in labour saving improvements because of weak growth. If labour does become scarce, we are more likely to see a catch up in productivity growth than rising inflation.
Asset values yes - that was the inevitable consequence of QE. It may have also encouraged additional leverage, but responsibility for leverage lies with macroprudential policy. The moment that we make interest rate/QE policy responsible for financial stability as well as inflation is the moment the consensus around assigning macro stabilisation to monetary rather than fiscal policy ends.
Excess inflation in the periphery and German cost undercutting were both a result of the Euro, and both have had serious consequences. The SGP and fiscal compact that are part of the Euro architecture have destabilised the whole Union (apart from Germany) since the GFC. The Euro was used as a weapon to extract resources from Greece in 2015. I think all of this is down to a badly designed monetary union rather than the Euro itself, but it can hardly be labelled a success.
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).
Labour Markets and Monetary Policy
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Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?
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Question 1: Do you agree that a strong labour market is a good indicator of building inflationary pressure?
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Global risks from rising debt and asset prices
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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?
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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?
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Juncker's State of the Union Address
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Question 2: Do you agree that the euro has had more benefits than costs?
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