Sir Charles Bean's picture
Affiliation: 
London School of Economics
Credentials: 
MA Cambridge
PhD MIT

Voting history

Monetary policy and the zero lower bound (ZLB)

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Question 2: Do you agree that the benefits of reforming the monetary system to allow materially negative policy interest rates outweigh the possible costs?

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Answer:
Disagree
Confidence level:
Confident
Comment:
While the zero lower bound constraint may bite more frequently than we believed likely before the crisis, finding clever ways to loosen the constraint would be to focus on the wrong issue. In particular, making possible even lower real interest rates would increase the risk of financial instability by strengthening the incentive for investors and financial institutions to adopt risky ways of generating higher returns. Instead, we really ought to be looking for ways to raise the equilibrium (or natural) real interest rate, especially through structural interventions that encourage higher investment and discourage excess savings in some countries.

The Importance of Elections for UK Economic Activity

Question 2: Do you agree that the outcome of the general election will have non-trivial consequences for aggregate economic activity (employment and GDP)?

Answer:
Agree
Confidence level:
Confident

Question 1: Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?

Answer:
Neither agree nor disagree
Confidence level:
Very confident
Comment:
It all depends on the counterfactual! While fiscal consolidations can have an expansionary effect on demand (e.g. the mid-1980s consolidation in Denmark) that is only likely to be the case when market participants have already lost confidence in a government's economic policies. The UK consolidation was never undertaken in the belief that it would boost demand directly but rather that it would reduce the likelihood of a loss of market confidence in the UK government's economic policies, which - had it occurred - would have necessitated a much sharper consolidation. So it all depends on whether slower consolidation would have led to a loss in market confidence or not.

Greece’s elections and the future of the Eurozone

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Question 2: Do you agree that refusal of the core EU countries to a renegotiation of the Greek bailout agreements would carry serious risks for the economic well-being of the Eurozone?

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Answer:
Disagree
Confidence level:
Not confident

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Question 1: Do you agree that a Syriza victory on 25 January would lead to a significant or sustained escalation in spreads for other peripheral Eurozone countries?

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Answer:
Disagree
Confidence level:
Confident

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