The macroeconomics of fiscal give-aways
In this box, which we published in our latest Review, NIER No. 249 August 2019, we evaluate the macroeconomic effects of expansionary fiscal policy measures on the UK economy. We consider two fiscal packages, one based on Labour Party policy and one based on some of the policies put forward during the Conservative Party leadership campaign. We show that while these policies would have little effect on the level of economic output, they might nevertheless change the composition of output and the distribution of income in the directions desired by those that proposed them.