Tony Yates's picture
Affiliation: 
University of Birmingham
Credentials: 
Professor of Economics

Voting history

Covid-19: Economic Policy Response

Question 3: Which would be the maximal public debt you would be willing to tolerate if used effectively (as in your answers to 1 and 2 above) to support an economic recovery?

Answer:
>140% of GDP
Confidence level:
Not confident
Comment:
With real rates so low, I don't think worries about the debt burden should or will constrain aid and stimulus to counter the effects of the virus crisis. What will constrain it is politics and the administrative unpreparedness of the tax and benefit system to do it quickly and error free.

Question 2: Which of the following would have the second greatest impact in mitigating the economic effects of the coronavirus economic crisis in the UK?

Answer:
Government transfers to and bailouts of businesses
Confidence level:
Confident

Question 1: Which of the following would have the greatest impact in mitigating the economic effects of the coronavirus economic crisis?

Answer:
Government transfers to and bailouts of businesses
Confidence level:
Confident
Comment:
I think we should and probably will end up doing most of these as the seriousness of the crisis changes the political imperatives in the govt.

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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Answer:
Agree
Confidence level:
Confident
Comment:
I think the costs of being wrong about this and realising that inflationary pressure was in fact building and monetary policy was too weak are less than the costs of erring on the side of tighter policy. The latter could mean a greatly prolonged period back at the effective lower bound to 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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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
It depends on what is causing the strong labour market. Positive supply side shocks can mean strong labour market quantities without inflationary pressure. The Phillips curve is really just a bivariate correlation. The modern equivalent embedded say in a many variable DSGE model can quite easily generate fluctuating Philips Correlations, as the mix of shocks changes.

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