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

Voting history

Secular Stagnation

Question 1: Do you agree- making your own definition of secular stagnation clear if you disagree with that offered here- that it is more likely than not that the advanced Western economies have entered into a period of secular stagnation?

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
I take secular stagnation to be, well, secular, ie relating to i) demographics, ii) some change in the rate of technical progress. I think the evidence is moot. For sure we have had a prolonged period where policies of maximal stimulus have struggled to generate a recovery, and keep inflation on track. But one could just as well account for this by the debt overhang created by the pre-crisis 'irrational exuberance', and the uncertainties injected by markets pondering how macroeconomic and regulatory policy will work out in the future. It's too early to tell, therefore!

UK House Prices and Macro-Prudential Policy July 2014

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Question 2: When housing-related risk is deemed excessive from the viewpoint of financial stability, do you agree that the correct response is to deploy macro-prudential tools, leaving interest rates focused on the needs of inflation and aggregate real activity?

 
Answer:
Disagree
Confidence level:
Not confident
Comment:
The steer we get from current literature on use of monetary policy and macro pru tools is that both should be used. Monetary policy is a weak and inefficient tool to quel a housing boom, but it would ideally tighten a little. I also think there are doubts, relative to these modelling studies, about the speed and efficacy with which macro pru standards can be changed from one period to the next, so monetary policy may have to fill in on that account, since speed and implementation are not issues.

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Question 1: Do you agree it is time for more robust policy action to prevent a build-up of excessive housing-related risk?

 

 
Answer:
Agree
Confidence level:
Confident
Comment:
Yes. I think that the increment in risk this time, compared to previous times when we have seen comparable increases in house prices, is less, since standards have already tightened a lot [no more self-reporting income], and LTV ratios have fallen a lot too since before the crisis. But it seems that further action might be necessary.

Euro Area Deflation and Risk for UK Economy May 2014

Question 2

Do you agree that a deflation in the Euro area (as defined in Question 1) would pose a considerable risk to the UK recovery?

Answer:
Agree
Confidence level:
Confident
Comment:
Sustained deflation would probably be associated with a protracted period of weak demand, and therefore weak demand for UK exports. It may also mean a period of renewed heightened uncertainty about the ability of the ECB to hold the EZ together, and about the health of the EZ sovereigns and banking system. The latter could easily spark a renewed rise in spreads in UK risky assets, with all the consequences that that had last time for the UK economy returning again.

Prospects for Economic Growth in the UK April 2014

Question 2

Do you agree that, in the wake of the financial crisis, any downward adjustment to the expected average annual long-term growth rate of the UK economy is likely to be by less than 0.25 percentage points?

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
On the assumption that intermediary balance sheets are repaired, I see no reason why the long run growth rate should be any different in the future from the past. That's a big if.

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