Question 3: Which of the following best characterizes the pace at which the budget addresses UK’s medium term fiscal challenges (deficit and debt)?
Answer:
Just right
Confidence level:
Confident
Comment:
The long-term damage to the economy and the public finances from the pandemic ('scarring') is still highly unclear but it is likely that some fiscal consolidation will be required in the medium/long term. So putting in place a (contingent) plan to close the deficit and put the debt-GDP ratio onto a falling trajectory over the medium/long term while providing continued fiscal support in the near term strikes the right balance in my view. The tax and spending measures necessary to stabilize the public finances can then be adjusted appropriately in the light of how the economy evolves over the next few years.
Question 2: To what extent will the “super deduction” aide the UK’s recovery from the Covid recession?
Answer:
Moderately
Confidence level:
Confident
Comment:
The generous super deduction will strongly encourage businesses to bring forward investment projects (it will also shift some marginal projects into profitability), though the magnitude of that intertemporal reallocation effect is highly uncertain. However, the dominant determinant of the pace of the recovery will be the speed at which consumption recovers as the health restrictions are lifted.
Question 1: How will the increase in the corporate tax rate from 19% to 25% affect the UK’s international competitiveness in the medium term?
Answer:
Moderate damage
Confidence level:
Not confident
Comment:
The corporate tax rate is but one factor that affects companies location decisions. Factors such as the stabilty and reliability of the legal environment, the cost and availability of appropriately skilled labour, the connectedness of transport systems, the height of international trade barriers, etc., are equally important. So the picture needs to be considered in the round.
Question 2: Would you support changing the ECB’s mandate to incorporate the EU’s target of carbon neutrality by 2050, if such a change is deemed legally necessary to adopt your preferred approach?
Answer:
Yes
Confidence level:
Confident
Question 1: Which of the following actions is the most advisable approach for European Central Bank to address the environmental impact of its bond-purchasing policies?
Answer:
Aiming for market neutrality
Confidence level:
Very confident
Comment:
I would be more than happy to see the ECB (and other central banks) skew their operations to foster the greening of the economy and to meet climate objectives. But the initiative to do this should in the first instance come from the appropriate political authorities. Central banks should only stray beyond their mandates if they have the support of the political authorities, as otherwise they lack the necessary democratic legitimacy. In this instance, the impetus should come first from the European Council, the European Parliament and the European Commission.
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).
The “Spend Now, Tax Later” Budget
Question 3: Which of the following best characterizes the pace at which the budget addresses UK’s medium term fiscal challenges (deficit and debt)?
Question 2: To what extent will the “super deduction” aide the UK’s recovery from the Covid recession?
Question 1: How will the increase in the corporate tax rate from 19% to 25% affect the UK’s international competitiveness in the medium term?
The ECB’s Green Agenda
Question 2: Would you support changing the ECB’s mandate to incorporate the EU’s target of carbon neutrality by 2050, if such a change is deemed legally necessary to adopt your preferred approach?
Question 1: Which of the following actions is the most advisable approach for European Central Bank to address the environmental impact of its bond-purchasing policies?
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