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[This note was prepared for the Policy Network economy conference, "The quest for growth".]
With the economy persistently weak, there is a growing consensus among economists that premature austerity has done considerable unnecessary damage, and that there is a strong case for slowing fiscal consolidation - at least to restore some of the unnecessary and damaging cuts to public investment (which have been the source of most of the
NIESR has just published research estimating the economic impact of immediate versus delayed fiscal consolidation in the UK. The research was undertaken by Dawn Holland (NIESR), John Van Reenen, Professor of Economics at the London School of Economics and Director of the Centre for Economic Performance, and Nitika Bagaria, a Phd student also at LSE and CEP. John and I have written an article for the FT(£).
NIESR's quarterly forecast for the UK economy is published today. Highlights:
NIESR's quarterly forecast for the world economy is published today. Highlights:
This post relates to the ongoing blog debate on "the state of macroeconomics", which I contributed to here, and which has drawn in a whole host of economics bloggers who know far more about modern macroeconomic theory than I do. However, here I want to address a related, more mundane question, but one which is perhaps more relevant to most non-economists' concerns.
There is a huge amount of interesting material in the full IMF staff report on the UK, released today, in particular the lasting damage ("hysteresis" to economists) done by this prolonged period of very low growth. But in this post I wanted to draw attention to one particular paragraph (it is para 43 on page 38). I reproduce it here in full:
Guest post by Alex Bryson, Senior Research Fellow, NIESR
The first achievement highlighted today by the Prime Minister in his Sunday Times article was deficit reduction:
"We’ve got the deficit down by a quarter already"
I was on the Today programme this morning to discuss a report, written by Howard Reed of Landman Economics for a group of childrens' charities, called "In the Eye of the Storm", about the impact of tax and spending change on "vulnerable children and families".John Humphrys began by asking me what the report showed.
[This article appeared first in Public Finance]
The G-20 has come full circle. In April 2009 in London the talk was of a massive coordinated fiscal stimulus. While this was considerably exaggerated - much of the "trillion dollar package" has already been announced - there was a genuine collective determination to do what was necessary to ensure the financial crisis did not become a prolonged depression.
[By Angus Armstrong, Director, Macroeconomic Research, NIESR]
[this post was updated at 9pm on 29/6/2012 to respond to Sam Freedman (DFE)]
The Manifesto for Economic Sense, authored by Paul Krugman and Richard Layard, has now been signed by a number of distinguished economists, including (but not limited to) the following:
Alan Manning - London School of Economics
Andrew Graham - Oxford University
Charles Wyplosz - The Graduate Institute, Geneva
Diane Coyle is not just one of the UK's most eminent "public intellectuals", but also simply one of the most impressive people I know; how she manages to run her own economic consultancy, serve as Vice-Chair of the BBC Trust and as a member of the Migration Advisory Committee, write a book every year or two and tweet constantly is completely beyond me.
[This is slightly updated version of an article that appeared first last September in the Independent here.
The G-20 has come (almost) full circle. In April 2009 in London, the communique set out leaders' commitment to a massive coordinated fiscal stimulus: