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Prof Jagjit S. Chadha

Posted: 13 January, 2017 - 09:24

Outside it is rather miserable. It is wet, windy and dark. And Blue Monday looms. But at the Institute January is a forecast month, so we are kept warm by the comfortable whirring of economists running models, assessing data, understanding deviations of outcomes from expectations and applying dollops of judgement.

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Prof Jagjit S. Chadha

Posted: 6 January, 2017 - 16:55

    In a Keynesian view of the world, the joint actions of monetary and fiscal policy set the level of overall demand in the economy.

Chadha, J S's picture

Prof Jagjit S. Chadha

Posted: 16 December, 2016 - 10:35

We are asked to consider what has caused this year's revolt against the conventional wisdom that liberal capitalism is the best way to guarantee economic welfare. It is too early to account for all the reasons. But a primary candidate is the continuing inability of the economy to generate median real wage growth

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Prof Jagjit S. Chadha

Posted: 9 December, 2016 - 13:30

After the UK referendum and the US presidential election result, there were significant movements in asset prices. Notably in the UK, the exchange rate fell by some 15% and, surprisingly in the immediate aftermath, term premia also fell by some 20Bp. But following the recent Italian referendum result and the announcement of the resignation of the Italian Prime Minister on December 4, although Italian term premia have been volatile, there has been little overall change in premia. For example, the two day change in term premia from 5 to 7 December was around 2Bp. I suggest that one reason for the relative stability is the ECB's QE programme which is providing support for bond prices with respect to changes in risk.

 

 

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Prof Jagjit S. Chadha

Posted: 2 December, 2016 - 11:31

Economic forecasters ought to be thankful for pollsters otherwise they might look very bad indeed.  The story often told is that a recession was forecast in the event of a vote to leave the European Union and because there has been no recession, economic forecasters have let us down.  This story is not quite the truth

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Prof Jagjit S. Chadha

Posted: 25 November, 2016 - 13:46

The long tussle between rules and discretion in policy-making moved decisively towards rules in the 1980s. A generation of monetary economists have subsequently concerned themselves with the development of a commitment technology for central banks. By which it is meant mechanisms that would lead households and firms to believe that a given objective will tend to be hit. 

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Prof Jagjit S. Chadha

Posted: 18 November, 2016 - 09:54

This has been a year of miracles. But unlike Larkin's year of 1963 in which the baby boomers broke free jointly into prosperity and security, we may look back on this year as the end of the long process of liberalisation and globalisation that had been set in train by the postwar consensus.

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Prof Jagjit S. Chadha

Posted: 11 November, 2016 - 12:50

Separating monetary from fiscal policy is no simple matter. Both are primarily designed to help smooth economic fluctuations. Budget deficits limit the depths of recessions as do low interest rates. 

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Prof Jagjit S. Chadha

Posted: 4 November, 2016 - 12:29

I start this new series of end-of-the-week blogposts  with a small confession. Many years ago I was at the Bank of England working in monetary analysis the day that operational independence was granted by the incoming Labour administration. 

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Prof Jagjit S. Chadha

Posted: 20 June, 2016 - 10:58

Authors: Jagjit Chadha[1], Paul Johnson[2] and John Van Reenen[3]

The economic consequences of leaving the EU have naturally been a central focus of the referendum campaign. As June 23 draws near we bring together the conclusions from our research on the likely consequences, and reflect on some of the claims made.

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Prof Jagjit S. Chadha

Posted: 17 June, 2016 - 10:30

We are fortunate to have a consensus of views on the negative impact of leaving the EU. This note explains how a rational agent should "consume" this advice. Theory tends to say that we should be wary of the motivation of those who forecast at the extreme but that we should still put weight on the central case.

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