Policy Paper

Moving Back Towards Market-Based Government Finance

The Federal Reserve and the Bank of England have been pursuing yield curve control in their respective government securities markets since market liquidity collapsed in the middle of March. The paper discusses the issues that arose during and after previous episodes of yield curve control, particularly after World War II, and proposes changes in procedures, such as state underwriting of new issue auctions and a safety net for market markers, that would help the authorities escape from the rigidity of present policies.

Central Bank Operations in Government Securities During the Pandemic

With economic activity severely disrupted by the coronavirus crisis, many governments have been supporting peoples’ incomes and keeping businesses alive by means of income support programmes financed by borrowing. This paper describes how the borrowing is being done in the United States and the United Kingdom, and how central banks are in practice managing not just short-term interest rates but also yields on government bonds.

Keywords: Central bank operations, government bonds.

JEL classifications: E52, E58.


The Economy on Ice - Meeting the economic challenges during and after the COVID-19 crisis

The purpose of this article is twofold. Firstly, it argues that it is doubtful that the currently announced policies will achieve their targets while they create substantial obstacles to the recovery of the post-crisis economy. Secondly, it proposes an alternative plan that its aim is (a) to ensure that everyone in the UK has the means to survive the crisis and, (b) to facilitate economic recovery by preserving the productive capacity of the economy and, hence, its ability to sustain a high employment rate.

A Switch to Active Fiscal Policy: NIESR Response to Budget 2020

On Wednesday 11th March 2020, Chancellor Rishi Sunak delivered his first Budget only 27 days after being appointed. The Chancellor delivered this first, post-Brexit Budget for this Government, which has a strong mandate after its comprehensive election victory in December that should be strong enough to implement a strategy for reform over the whole of this parliament.

The opening section of this analysis provides an overview and response to the 2020 Budget, followed by comments on the following topics before concluding: