Tony Yates's picture
University of Birmingham
Professor of Economics

Voting history

Responsible long-term fiscal policy (pilot survey)

First question:

To help ensure that advanced country governments have sufficient flexibility to respond to future crises, it is important that finance ministries aim for a ratio of public debt to GDP that is substantially less than 60% in normal times.

Confidence level:
60% was probably a good guess before the crisis. Since the crisis, we have upped our estimate of the frequency and cost of crises. I don't personally hold out that much hope that regulatory reform enacted will do a whole lot of good. That leaves me thinking we need to make more fiscal room for possible future bailouts, and extreme automatic stabiliser responses. However, we aren't going to be able to start down the road of getting to <60% any time soon.