Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
UK economic policy and prospects Jonathan Portes June 2013 www.niesr.ac.uk Twitter: @jdportes Niesr.ac.uk/blog National Institute of Economic and Social Research Slowest recovery in recorded economic history What explains UK economic underperformance? - Fiscal policy: predictable result of premature consolidation - Continued dysfunctionality of financial sector - Commodity prices/imported inflation - And of course the eurozone - Fortunately the labour market has come to the rescue.. Blaming the eurozone? Yes and no.. Impact of consolidation programmes on level of GDP, 2013 -2 -4 -6 -8 -10 -12 Scenario 1 Scenario 2 Euro Area UK Spain Portugal Neths Italy Ireland Greece Germany France Finland Belgium -14 Austria % difference from base 0 Long term damage, here and elsewhere Short term: signs of modest improvement... How to minimise the damage? Lots of Plans.. • Posen: public and private investment, BIB, BoE purchases • NIESR: public infrastructure, NICs, reverse benefit cuts • LSE GC: investment, skills/human capital, innovation • Fabians (Pryce, Weldon, Mazzucato, Portes, et al) : state banks, innovation, immigration, inequality, etc. • “Hayekians”: cut spending “properly”, cut taxes No-one left to defend “muddling through”, but that’s what we’ll get.. More public investment could boost output in both short and long term.. Can we afford it?. What does a (medium-term) growth strategy look like? • Building on successes (competition, labour market) • Addressing weaknesses (management, educational underperformance, planning/housing) • Identifying and maximising sectors of comparative advantage (HE, finance, creative industries, business services, pharma, hi-tech manufacturing) • Much of this is common ground – so what are the issues/challenges? Housing • Housing market contributes to number of structural problems with UK economy: – Financial instability – Labour immobility – Inequality/social immobility • But Help To Buy has achieved the impossible.. • Reforms/investment needed for social housing, planning, and mortgage finance UK economic policy and prospects Jonathan Portes February 2013 www.niesr.ac.uk Twitter: @jdportes Blog: notthetreasuryview.blogspot.com National Institute of Economic and Social Research