Archive for the 'Public Policy' Category

How to prevent another Northern Rock

Monday, March 17th, 2008 by Paul Ayres

Crisis regulation may help avoid another Northern Rock style panic, according to research by Professors Shurojit Chatterji and Sayantan Ghosal presented at the Royal Economic Society’s 2008 annual conference.

But the authorities should not always aim to prevent bank runs on the contrary, when regulators cannot monitor banks and fine those that are behaving irresponsibly, the possibility of bank runs is needed to prevent banks from lending irresponsibly in the first place.

In September 2007, Northern Rock suffered the first bank run on a British bank in over a century. The spectacle of depositors queuing up in front of the high street branches of the Northern Rock has prompted much commentary on the stability of the financial systems and the global consequences of the subprime crisis in the United States.


Opportunistic Monetary Policy: Why UK Interest Rates Are Often Constant For Long Periods And Why They Are Likely To Rise Soon

Wednesday, May 9th, 2007 by Paul Ayres

In the fourth of a series of interviews from the Royal Economic Society annual conference 2007, Romesh Vaitilingam talks to Costas Milas about UK interest rates.

Monetary policy-makers do not make minor adjustments to interest rates when inflation is close to the inflation target  but they do respond vigorously when inflation begins to move further from the target. That is the central argument of new research by Professors Christopher Martin and Costas Milas, presented to the Royal Economic Society’s 2007 annual conference at the University of Warwick.


Longer terms of office for members of the Monetary Policy Committee

Thursday, March 15th, 2007 by Paul Ayres

A new research report calls for longer terms of office for members of the Bank of Englands Monetary Policy Committee (MPC). Writing in the Economic Journal, Brian Henry, Mathan Satchi and David Vines argue that this would guard against the potential danger of the MPC taking too short-term a view of the economy when setting interest rates.

Much attention has been given in the press as to whether new MPC appointments are doves or hawks. But past work by Charles Bean now the Bank’s chief economist but then an LSE professor implied that, providing the Bank remains properly independent, we should not really worry. Both hawks and doves will normally make roughly the same decision and both are likely to serve society well.

The new study by Professor Vines and colleagues shows that this conclusion is only valid if policy-makers take a long-term view of the economy. Policy-makers who take a short-term view are much more likely to disagree and may not serve society well.


Pensions policy in the UK

Friday, March 17th, 2006 by Paul Ayres

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In November 2005, the independent Pensions Commission published its second report, setting out a series of recommendations for reform of the UK pension system. Drawing on recent research from the Centre for Market and Public Organisation (CMPO), University of Bristol, Sarah Smith discusses the Commissions proposals.

What is the pensions crisis all about?

Population ageing has put increasing strain on the UK pension system. Unlike many other OECD countries, there has not been the prospect of rapidly growing state spending on pensions. But past reforms have created their own problems, notably: (more…)

Making school choice work for disadvantaged children

Friday, March 17th, 2006 by Paul Ayres

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Following on from the recent debates about education reform, Simon Burgess, Professor of Economics and Director of the Centre for Market and Public Organisation (CMPO), at the University of Bristol discusses school choice.

What should school reform be for?

· Raising standards is one obvious response. In England, this seems to be a particular problem at the lower end of the achievement scale, with large numbers of people leaving school with no qualifications.

· Another response is that it should be targeted at giving children from poorer families a better deal in the education system. (more…)