Question 2: Which of the following is the one reform you would choose to improve fiscal rules?
Answer:
Expansion of EU level fiscal capacity for expanded mutual insurance
Confidence level:
Very confident
Comment:
Both the euro sovereign debt and the current Covid crises have shown that the euro can only be a sustainable currency union with a minimum of risk sharing. Such risk-sharing can be private (capital markets and banks) or government-focused. Both mechanisms have to be strengthened and also depend on each other. A complete banking union (with backstop and European deposit insurance) is a first step into fiscal union, though a very partial one. Steps like the Recovery Plan are a further step. In the medium- to long-term, further strengthening of euro-level fiscal capacity, which enables counter-cyclical policies and insurance mechanisms will be necessary.
Proposition 1: The existing fiscal rules for European Monetary Union members require revision.
Answer:
Strongly agree
Confidence level:
Very confident
Comment:
The current rules do not make any macroeconomic sense and are being ignored anyway (also, b/c they are not enforceable).
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:
Reduces deficits too rapidly
Confidence level:
Confident
Comment:
The UK has entered the pandemic with a rather tight fiscal stance (and at the end of a 10-year austerity period), eased over the past 12 months. While long-term fiscal consolidation is certainly a laudable objective, it seems too early to even take first steps towards this objective (as done with personal income tax), given the continuously high public health and economic uncertainty.
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 UK is struggling with two shocks - the pandemic recession and the uncertainties of the post-Brexit economy. While the super deduction might help pull forward investment into the short term and thus speed up economic recovery, the Brexit uncertainties work against it and will certainly off-set a large part of the positive effect.
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:
No effect
Confidence level:
Confident
Comment:
I do not think that a higher corporate tax rate will be a first-order factor in the UK's competitiveness in the medium-term, compared to other more important factors. Most importantly, the exit from Europe's Single Market and Customs Union and the ongoing conflict with the EU will have bigger negative effects on competitiveness, both in certain areas of manufacturing as in large parts of the service sector.
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).
Fiscal Rules in the European Monetary Union
Question 2: Which of the following is the one reform you would choose to improve fiscal rules?
Proposition 1: The existing fiscal rules for European Monetary Union members require revision.
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?
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