John Muellbauer

John Muellbauer is an Official Fellow of Nuffield College and Professor of Economics, Oxford University. He is also a member of the Academic and Policy Board of OXONIA, The Oxford Institute for Economic Policy. Professor Muellbauer is primarily an applied macroeconomist, though his microeconomic textbook with Angus Deaton, Economics and Consumer Behaviour (CUP 1980), is still in print. Current areas of research include modelling regional housing and labour markets in the UK, monetary transmission and policy, consumer behaviour, the South African and Japanese economies, and forecasting growth in the G7 countries. An important theme in his research has been the impact of institutional differences both across countries and through time, on monetary transmission and macroeconomic fluctuations. He currently holds research grants from the ESRC with Adrian Pagan on “Improving Methods for Macro-econometric Modelling”, and from DFID with Janine Aron on “New Monetary Policy Challenges for Sustainable Growth in South Africa”. He has been a consultant to the Bank of England, HM Treasury and the Office of the Deputy Prime Minister. He has contributed extensively to the UK debate over property taxation and also to the argument as to whether the UK should join the Euro. He is co-founder of the website He is a Fellow of the British Academy and of the Econometric Society.

Papers Published in World Economics:

Monetary Policy, Macro-stability and Growth

There is greater appreciation now amongst economists of the negative effect of uncertainty on investment, growth and equality, especially when credit constraints are widespread. This implies an important linkage between the transparency and predictability of the policy environment, and growth and equality. The paper begins with a literature survey on the inflation and inflation volatility link, the uncertainty and investment link and the inflation volatility and growth link. This framework is used to examine the experience of South Africa’s new monetary policy regime (inflation targeting, IT) in achieving greater macrostability. South Africa is an interesting case study, being one of the more advanced of the emerging markets with its deep and sophisticated financial system, and yet with around 35 percent unemployment and a legacy of developmental problems from the Apartheid era. The authors demonstrate using evidence from three sources of micro-data that the new monetary regime is more credible, transparent and predictable. They examine the performance of monetary policy and argue IT has not resulted in real interest rate levels that are a hindrance to growth. They explore the better response under IT to big external shocks like exchange rate depreciation, as compared with the monetary regime prior to IT. The paradox is examined of success in achieving macro-stability, where greater household acquisition of debt and increased demand is both inflationary and limits saving, hence constraining corporate investment. The paper concludes with lessons from South Africa’s recent successful monetary policy experience for other emerging market countries and for less developed countries’ central banks e.g., in Africa.

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