Tony Yates Profile picture
Feb 1 8 tweets 2 min read
I support Andrew's call for a TC review of the MPC.
I think that all the big calls; very low interest rates since the GFC; QE, were the right ones. Forward guidance was the right thing to do but handled badly.
Andrew has a point about diversity on the MPC. Controversies rage in economics about everything, including monetary econ and finance. Yet the range of votes on the MPC is tiny and there is almost no disagreement about anything, ever.
I think the preponderence of internal BoE votes to externals is too high. Internals might find it hard to vote against their bosses and so behave like a bloc vote. Cut the number of internals, or increase the externals or both.
It's also too easy to migrate from being an extenal to an internal member [see, eg Broadbent]. This can encourage externals to engage in 'good behaviour' so that they are more likely to land an internal job and quelling dissent.
Also, transits from the Treasury/govt in general to the BoE weaken central bank independence. Dave Ramsden, a great appointment on its own merits, is the most recent beneficiary of this, but there were others in the past. [Cunliffe, Lomax, Gieve].
This aspect of the appointments norms is of particular concern when you are doing large scale QE at the same time as the government is running large deficits: such a policy looks just like the BoE is being leaned on to help the government out.
Having former Treasury officials on the BoE policy boards looks like you are abusing the appointments process to make sure that the BoE does what you want it to. [Even though I don't think this is what has gone on in this case].

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More from @t0nyyates

Feb 2
There are a few difficulties with swallowing the government's commitment to 'levelling up'.
1. It's a policy agenda that has followed a soundbite and has been cooked up to rationalize it, ex post.
2. much of the agenda is about undoing the effects of past policies pursued by Conservatives. Letting the market rip in the closure of the old industries, with little support afterwards in the 1980s; the austerity policy of the 2010-2016 period which gutted local govt.
Read 9 tweets
Feb 1
Hard to know what to make of this IMO. Others seem to react with instant outrage, but I find myself thinking:
1. To begin with, some uncertainty about what PPE quality/type would be needed. Early procurement errors might be expected, and indicative of a precautionary policy of buying whatever you can.
2. There was a mad scramble for PPE, at a time of very high demand, and supply constraints binding. Perhaps to be expcted that there would be some overpayment - doing that and securing a trade better than underpaying and getting nothing.
Read 19 tweets
Jan 31
Seems to me highly unlikely that the EU hit on the optimal regulatory design. So in principle there ought to be better ones to be found in many if not all areas. But:
The right's vision of a bonfire of regulations that could significantly boost growth is a canard. There is no evidence to back it up.
Those urging this neglect that regulations are often enabling: quality and quality assurance and standardization are services buyers and sellers want.
Read 11 tweets
Jan 5
I found this very entertaining and thought provoking. A few observations:
1. 1998's devolution settlement was popular. And it's at least as possible that support for independence could have been greater and more millitant had England denied it to the nations. Tom presents it as though we are sure it hastened rather than forestalled disintegration.
2. It could be a good thing that there might not exist a single sense of Britishness, and that multiple such identities can /do coexist; and that this can be a sign of national health. The piece's implicit hypothesis is that the lack of a single identity is an illness.
Read 15 tweets
Jan 4
A lot of those who 'don't care' arrived at that view by consuming misinformation fed to them by thought leaders in their political tribe.
It's highly illiberal not to offer treatment to those that change their mind via the tragic route of a severe infection.
Read 7 tweets
Dec 20, 2021
So, no lockdown yet. There's a legitimate debate to be had about what needs to be done and when. If, like me, you think that we ought to have moved, and that eventually the govt do the right thing [more on this in a minute], this just means worse is coming soon.
ie, we are eventually going to have to lock down for more and for longer than we otherwise would. This is for two reasons.
First, locking down later allows the epidemic to spread more, and it therefore takes longer/stronger set of measures to reduce the actual flow of cases to the target flow.
Read 5 tweets

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