Economic Policy, with and Without Forecasts
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University of Surrey Discussion Papers in Economics By
råáp=== = = ======råáîÉêëáíó=çÑ=pìêêÉó Discussion Papers in Economics THE DISSENT VOTING BEHAVIOUR OF BANK OF ENGLAND MPC MEMBERS By Christopher Spencer (University of Surrey) DP 03/06 Department of Economics University of Surrey Guildford Surrey GU2 7XH, UK Telephone +44 (0)1483 689380 Facsimile +44 (0)1483 689548 Web www.econ.surrey.ac.uk ISSN: 1749-5075 The Dissent Voting Behaviour of Bank of England MPC Members∗ Christopher Spencer† Department of Economics, University of Surrey Abstract I examine the propensity of Bank of England Monetary Policy Committee (BoEMPC) members to cast dissenting votes. In particular, I compare the type and frequency of dissenting votes cast by so- called insiders (members of the committee chosen from within the ranks of bank staff)andoutsiders (committee members chosen from outside the ranks of bank staff). Significant differences in the dissent voting behaviour associated with these groups is evidenced. Outsiders are significantly more likely to dissent than insiders; however, whereas outsiders tend to dissent on the side of monetary ease, insiders do so on the side of monetary tightness. I also seek to rationalise why such differences might arise, and in particular, why BoEMPC members might be incentivised to dissent. Amongst other factors, the impact of career backgrounds on dissent voting is examined. Estimates from logit analysis suggest that the effect of career backgrounds is negligible. Keywords: Monetary Policy Committee, insiders, outsiders, dissent voting, career backgrounds, ap- pointment procedures. Contents 1 Introduction 2 2 Relationship to the Literature 2 3 Rationalising Dissent Amongst Insiders and Outsiders - Some Priors 3 3.1CareerIncentives........................................... 4 3.2CareerBackgrounds........................................ -
The Political Economy of Tax Policy
IFS The Political Economy of Tax Policy James Alt Ian Preston Luke Sibieta Prepared for the Report of a Commission on Reforming the Tax System for the 21st Century, Chaired by Sir James Mirrlees www.ifs.org.uk/mirrleesreview The Institute for Fiscal Studies Full Report to be published by Oxford University Press The Political Economy of Tax Policy1 Final Draft for Mirrlees Review 12 March 2008 Do not cite or quote without the authors’ permission Professor James Alt, Harvard University Professor Ian Preston, University College London and the Institute for Fiscal Studies Luke Sibieta, Institute for Fiscal Studies 1 The authors thank Stuart Adam, Lucy Barnes, Tim Besley, Ian Brimicombe, Alan Budd, Judith Freedman, Rachel Griffith, James Hines, Paul Johnson, Alison Post, James Poterba, Christopher Sanger, Guido Tabellini, Christopher Wales and conference participants in Cambridge for their helpful comments and suggestions 1 Executive Summary This chapter reviews major changes in British tax-setting institutions in the last quarter century and highlights four key points about the politics of tax policy, which are summarised below. The chapter also makes policy recommendations, such as for improving scrutiny and parliamentary accountability; these are also summarised below. A “passive” movement to the right The chapter analyses whether changes in voter preferences and strategic party positioning could explain declines in statutory rates of income tax. What we discover is that electoral support has moved to the right, though voters seem to have followed rather than led the changing content of party manifestos. Voters have always favoured redistribution, particularly from those with the highest incomes to those with the lowest incomes. -
The Case of Neglected Liquidity Risks in Market-Based Banking
Regulation & Governance (2021) 15, 909–932 doi:10.1111/rego.12330 Divisions of regulatory labor, institutional closure, and structural secrecy in new regulatory states: The case of neglected liquidity risks in market-based banking Leon Wansleben Max Planck Institute for the Study of Societies, Cologne, Germany Abstract Monetary policy and financial regulation have been regarded one of the paradigmatic domains where states can reap the bene- fits of delegating clearly delineated and unequivocal policy tasks to specialized technocrats. This article discusses the negative side-effects and unintended consequences of particular ways to partition such tasks. The separation between monetary policy formulation, central banks’ money market management, and financial supervision has weakened policy makers’ capacities to address risks associated with banks’ active liability management and to mitigate pro-cyclical dynamics in money markets. These adverse effects derive from the neglect of liquidity as a regulatory problem in formal task descriptions; from the obsta- cles to positive coordination between specialized technocrats in the self-contained domains of monetary policy formulation, implementation, and prudential regulation; and from a dissociation between formal responsibilities, which lie with regulators, and the resources residing in money market divisions – market expertise and influence over counterparties – that are critical to influence bank behavior. I explore these mechanisms with an in-depth case study of British monetary and financial gover- nance between 1970 and 2007. I posit that we can generalize the respective mechanisms to explore unintended effects of ‘agencification’ and to contribute to a broader re-assessment of those organizing principles that have guided the construction of ‘new regulatory states’. -
The Global Financial Crisis – Why Didn't Anybody Notice?
8 THE GLOBAL FINANCIAL CRISIS – WHY DIDN’T ANYBODY NOTICE? The Global Financial Crisis – Why Didn’t Anybody Notice? On 17 June 2009, a group of leading academics, economics journalists, politicians, civil servants, and other practitioners met at the British Academy for a round-table discussion of the current financial crisis. The question under discussion in this British Academy Forum had been framed by Her Majesty The Queen on a visit to the London School of Economics in November 2008, when she had asked: if these things were so large, how come everyone missed them? A purpose of the Forum was to provide the basis of an ‘unofficial command paper’ that attempted to answer this question. The discussion inevitably ranged more widely – touching on the social fall-out of the crisis, and including a plea for a greater emphasis on the teaching of economic history in universities. But it was with The Queen’s question in mind that the two convenors of the meeting, Professor Tim Besley FBA and Professor Peter Hennessy FBA , subsequently drafted a letter summarising the discussion: it was sent to Buckingham Palace on 22 July. MADAM, When Your Majesty visited the London School of Economics last November, you quite rightly asked: why had nobody noticed that the credit crunch was on its way? The British Academy convened a forum on 17 June 2009 to debate your question, with contributions from a range of experts from business, the City, its regulators, academia, and government. This letter summarises the views of the participants and the factors that they cited in our discussion, and we hope that it offers an answer to your question. -
Provision of Emergency Liquidity Assistance in 2008/9
REVIEW OF THE BANK OF ENGLAND’S PROVISION OF EMERGENCY LIQUIDITY ASSISTANCE IN 2008–09 Report by Ian Plenderleith Presented to the Court of the Bank of England October 2012 Introduction Introduction 1. This Review examines the actions of the Bank of England at the height of the financial crisis, around the collapse of Lehman Brothers, to provide emergency liquidity assistance (ELA) to HBOS and Royal Bank of Scotland in 2008–09. It is one of three reviews commissioned by the Court of Governors of the Bank on 21 May 2012. 2. The terms of reference for the Review (set out in full in Appendix 1) specify that its purpose is to learn lessons to inform the way the Bank conducts ELA operations for individual financial institutions. Specifically, the Review is charged with examining: The basis of the decisions to provide ELA to each firm concerned; The governance arrangements within the Bank for making those decisions; The structure and terms of each ELA operation; The effects of those operations on the institutions concerned and on overall financial stability; The capability of the Bank to plan, implement and manage those operations. 3. Overall, the Review is charged with examining how the Bank discharged its responsibilities as lender of last resort in a crisis and making recommendations for the conduct of any such operations in the future. 4. The Review addresses this remit by examining each aspect of the Bank’s ELA operations in 2008–09 in turn. At each stage, an assessment is made of the effectiveness of the Bank’s actions in the circumstances of the time; and, looking forward, recommendations are made at various points on issues the Bank may need to consider for the conduct of any future ELA operations. -
Making a Modern Central Bank
CONSEQUENCES OF SUCCESS AND FAILURE: MAKING A MODERN CENTRAL BANK Bank of England book launch Virtual 23 November 2020 Bank of England book launch OVERVIEW A series of upheavals at the Bank of England in 1987-2003 provided the background to a monetary and economic revolution that reverberates still through global finance today. Harold James’ Making a Modern Central Bank – The Bank of England 1979-2003 examines the most turbulent period of change at the Old Lady of Threadneedle Street since its early years helping finance war with France after its foundation in 1694. The launch brings together leading figures from the UK and abroad to discuss past successes and failures which have shaped the Bank’s make-up. The session starts with a balance sheet of the Bank of England’s overall transformation, going on to discuss the impact on UK and international banking and finance. It ends by looking at the lasting legacies of changing regimes for monetary policy and banking supervision. MEETING AT A GLANCE GMT 15:00 - 15:05 Welcome address 15:05 - 15:15 Keynote address: Harold James, Professor of History, Princeton University 15:15 - 16:10 Session I: Consequences of success and failure: the making of a modern central bank 16:10 - 17:05 Session II: Development of banking and financial markets: the growth of financial globalisation 17:05 - 18:00 Session III: Balancing responsibilities: Banking supervision, monetary policy and the trials of independence 18:00 Closing remarks 2|Consequences of success and failure: Making a modern central bank MEETING PROGRAMME -
DC1058 Annex Complete
Annex 1 The Secretary of State’s letter to Gavyn Davies and press notice 152 Review of the Future Funding of the BBC 2-4 Cockspur Street London SW1Y 5DH Telephone: 0171-211 6975 Facsimile: 0171-211 6249 From the Secretary of State for Culture, Media and Sport THE RT HON CHRIS SMITH MP Gavyn Davies Esq OBE Partner Goldman Sachs Peterborough Court 133 Fleet Street LONDON EC4A 2BB 30 November 1998 Review of the Future Funding of the BBC I am very pleased that you have agreed to make time to chair the independent review panel; I know how busy you are. I am writing today to let you have some further information on the role of the panel. As you are aware, the BBC’s Royal Charter guarantees the future of the Corporation until 2006. A separate formal Government Agreement with the BBC guarantees the licence fee until the end of March 2002 and provides for a review of the funding arrangements before that date in the light of technological and other developments. The level of the licence fee until 2002 in based on a five-year settlement announced in April 1997 following an independent assessment of the BBC’s funding needs. The settlement amounts to a cumulative change for the five years from 1 April 1997 just below the level of changes in the RPI (RPI minus 0.08%). The level of the licence fee post-2002 will be looked at separately in the run up to 2002. Extent of the review The review will be a closely defined one. -
Monetary and Fiscal Policy: Present Successes and Future Problems
HOUSE OF LORDS Select Committee on Economic Affairs 3rd Report of Session 2003-04 Monetary and Fiscal Policy: Present Successes and Future Problems Volume 2: Evidence Ordered to be printed 19 October 2004 and published 11 November 2004 Published by the Authority of the House of Lords London : The Stationery Office Limited £24.00 HL Paper 176-II CONTENTS Oral Evidence Page Mr Len Cook, National Statistician, Mr Colin Mowl, Director of Macroeconomics and Labour Market and Mr David Fenwick, Director of Consumer Prices and General Inflation Division, Office for National Statistics Oral Evidence, 9 December 2003 1 Professor David Rhind, Chairman, Mr Richard Alldritt, Chief Executive and Mr Martin Weale, Commissioner, Statistics Commission Written Evidence 17 Oral Evidence, 16 December 2003 18 Supplementary Written Evidence 29 Mr Christopher Allsopp, Head, Mr Geoff Tily, Member, Mr Andrew Holder, Member and Mr Michael Williams, Member, Allsopp Review Team Oral Evidence, 13 January 2004 48 Mr Jon Cunliffe, Mr Nicholas Holgate, Mr Christopher Kelly, Mr Andrew Lewis, Mr Stephen Mitchell and Mr Jitinder Kohli, HM Treasury Oral Evidence, 21 January 2004 63 Written Evidence 78 Mr Mervyn King, Ms Rachel Lomax, Mr Charles Bean, Ms Marian Bell, Mr Richard Lambert, Bank of England Monetary Policy Committee members Oral Evidence, 27 January 2004 86 Mr Ciaran Barr, Chief UK Economist, Deutsche Bank Oral Evidence, 3 February 2004 106 Mr Willem Buiter, Chief Economist, European Bank for Reconstruction and Development Oral Evidence, 10 February 2004 121 Sir -
The 1981 Budget – Facts & Fallacies Tuesday September 27Th 2011 The
The 1981 Budget – Facts & Fallacies Tuesday September 27th 2011 The Grocers’ Hall, Princes Street, London EC2 Session One: Emerging from the 1970s.1 PETER JAY Right, my lords, ladies, and gentlemen I hope you are now in the mood, so let’s get on with it. First of all, the boilerplate − the rules of the game. They are very simple. We are in the business of making history. You, the witnesses, will tell it like it was, and the Churchill Archives Centre will take it all down and may give it in evidence against you at any time that suits them. No one else is allowed to record anything that is said, but you are allowed to write notes. If there is time, and if I feel like it, questions may be taken from the floor at the end. Those contributing from the floor must – or this is what I’m told – say who they are for the record, and anyone who speaks must sign the Archives consent form, spare copies of which Andrew Riley has at this moment. I’m not sure what sanctions there are for anyone who speaks and then refuses to sign, but, I imagine, intense academic odium. We are, in every sense, on the record. We are not, repeat not, on Chatham House rules. Speakers will have the chance to edit their transcripts but it will all be published and anyone may quote what anyone else has said. So, ladies and gentlemen, you have been warned. The title of this session is ‘Emerging from the 1970s’ or, as I would impartially put it, ‘How the legacy was lost’. -
The First 50 Years of the Government Economic Service Lecture by Dave
The First 50 years of The Government Economic Service Lecture by Dave Ramsden 27 April 2015 1. [Slide 1] Welcome to King’s. Thanks to the Strand Group at the Policy Institute here at King’s and to Hewlett Packard for hosting this lecture and to all of you for attending.1 2. The Government Economic Service (GES) was created in October 1964. The new Wilson Government, with a majority of four, embarked on a more planned approach to the UK economy.2 The Department of Economic Affairs (DEA) was created with a longer term mandate, with HM Treasury meant to focus more on its Finance Ministry role. 3. [Slide 2] Several of the new Special Advisers were economists, including Robert Neild,3 who re-joined HMT. Alec Cairncross, as Head of the Treasury’s Economic Section the Government’s chief economist, worked to ensure the section stayed under civil service management. It did and Cairncross in his words “ended up with the title Head of the Government Economic Service. Ironically the Economic Service has survived to this day while the Economic Section vanished in the 1980s”.4 4. Ironically, because the fledgling GES, 22 strong of whom 18 were already in the Economic Section, was for Cairncross “at first largely a fantasy”, with little influence over staffing or resources. 5. As we are well into 2015 we can mark another anniversary: 100 years ago in 1915 Keynes started working in the Treasury.5 1 I would like to thank my colleagues Lisa Barrance, Andrew Gurney, Leeanne Johnston, Nayeem Khan, Nick Macpherson, Charlotte McKinley, Jake Nelson, Mario Pisani, James Richardson and Daniel Tomlinson for their help and comments. -
Inflation Report
Inflation Report May 2000 The Inflation Report is produced quarterly by Bank staff under the guidance of the members of the Monetary Policy Committee. It serves two purposes. First, its preparation provides a comprehensive and forward-looking framework for discussion among MPC members as an aid to our decision making. Second, its publication allows us to share our thinking and explain the reasons for our decisions to those whom they affect. Although not every member will agree with every assumption on which our projections are based, the fan charts represent the MPC’s best collective judgment about the most likely path for inflation and output, and the uncertainties surrounding those central projections. This Report has been prepared and published by the Bank of England in accordance with section 18 of the Bank of England Act 1998. The Monetary Policy Committee: Eddie George, Governor Mervyn King, Deputy Governor responsible for monetary policy David Clementi, Deputy Governor responsible for financial stability Willem Buiter Charles Goodhart DeAnne Julius Ian Plenderleith John Vickers Sushil Wadhwani The Overview of this Inflation Report is available on the Bank’s web site: www.bankofengland.co.uk/inflationreport/infrep.htm The entire Report is available in PDF format on www.bankofengland.co.uk/inflationreport/index.htm Printed by Park Communications Ltd © Bank of England 2000 ISBN 1 85730 167 6 ISSN 1353–6737 Overview In the first quarter of 2000, output in the UK economy was 2.9% higher than a year earlier, and inflation on the RPIX measure was 2.0% in March. Final domestic demand, led by household consumption, grew strongly last year. -
Ten Years After the Crisis: Looking Back, Looking Forward
TEN YEARS AFTER THE CRISIS: LOOKING BACK, LOOKING FORWARD 22 September 2017 A CEPR conference Sponsored by the Brevan Howard Centre for Financial Analysis, Imperial College Business School Hosted by EY, 25 Churchill Place, London E14 5RB PROGRAMME 08:30 - 09:00 Coffee and registration 09:00 - 09:45 Opening address by Mario Monti (Università Bocconi) FINANCIAL STABILITY: HAS REGULATORY REFORM GONE FAR ENOUGH? Moderator: Martin Sandbu (Financial Times) 09:45 - 09:50 Introduction 09:50 - 11:15 Vittorio Grilli (JP Morgan and CEPR) Catherine L. Mann (OECD) John Vickers (University of Oxford) 11:15 - 11:45 Coffee Break KEY ISSUES: TOO BIG TO FAIL, DERIVATIVE MARKETS, SHADOW BANKING Moderator: Martin Sandbu (Financial Times) 11:45 - 11:50 Introduction 11:50 - 13:15 Tamim Bayoumi (IMF) Charles Goodhart (London School of Economics and CEPR) Tom Huertas (EY) 13:15 - 13:45 Lunch 13:45 - 14:15 Keynote Speech: “The Great Recession as Great Refutation” Paul Krugman (Princeton University and CEPR) 1 WHERE COULD THE NEXT CRISIS COME FROM? ADVANCED & EMERGING ECONOMIES Moderator: Stephanie Flanders 14:15 - 14:20 Introduction 14:20 - 15:45 Christian Thimann (AXA) Paul Tucker (Harvard University and Chair, Systemic Risk Council) Shang-Jin Wei (Columbia Business School and CEPR) 15:45 - 16:15 Coffee Break CONCLUSIONS: PERSPECTIVES NOW AND IN 2007 Moderator: Stephanie Flanders 16:15 - 16:20 Introduction 16:20 - 17:45 Anat Admati (Stanford University) Randy Kroszner (University of Chicago, Booth School of Business) Klaus Regling (European Stability Mechanism) 17:45 Drinks Reception 2 TEN YEARS AFTER THE CRISIS: LOOKING BACK, LOOKING FORWARD 22 September 2017 A CEPR conference Sponsored by the Brevan Howard Centre for Financial Analysis, Imperial College Business School Hosted by EY, 25 Churchill Place, London E14 5RB BIOGRAPHIES Anat Admati is the George G.C.