Slides of Nick Crafts' RES Policy Lecture

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Take Fiscal Consolidation as a Given • It is the basis of the Coalition Agreement • Delaying fiscal consolidation risks excessive D/Y • Return to ‘financial repression’ (capital controls, g > r) which would permit much looser fiscal policy while maintaining fiscal sustainability neither feasible nor desirable • NB: the composition of fiscal consolidation is a big issue
Fiscal Consolidation and Productivity • Reduction in ‘non-productive’ government expenditure and raising indirect taxes more favourable for growth than raising direct taxes and cutting ‘productive’ expenditure • Effects can also work through NAIRU (benefits), labour force participation (retirement), efficiency (privatization, subsidy withdrawal) • Design should presumably has to take account of political constraints and ‘fairness’ issues; otherwise easy to devise strategy that is good for supply-side
Page 1 and 2: POLICY LECTURE Returning To Growth:
Page 3 and 4: Promoting Recovery • 3 basic poss
Page 5: Fiscal Consolidation • Cutting go
Page 9 and 10: Sources: Mitchell et al. (2012); ON
Page 11 and 12: Public Finances (% GDP) Net Public
Page 13 and 14: Treasury Bill Rate (%)(1930q1-1938q
Page 15 and 16: Houses Built (without state assista
Page 17 and 18: The “Managed Economy” in 1930s
Page 19 and 20: Lessons about Recovery (1) • Conv
Page 21 and 22: Treasury Bill Rate (%) (1979q2-1987
Page 23 and 24: 1980s’ Supply-Side Policy • Fro
Page 25 and 26: 1970s Experience • Strong bias to
Page 27 and 28: Increased Competition and Productiv
Page 29 and 30: Levels of Productivity in the Marke
Page 31 and 32: Real GDP/Person (UK = 100 in each y
Page 33 and 34: Regulation and the contribution of
Page 35 and 36: Financial De-Regulation and 1980s
Page 37 and 38: Credit Conditions Index Data kindly
Page 39 and 40: Macroeconomic Policy and Post-2009
Page 41 and 42: Fiscal Consolidation since 2010: Gr
Page 43 and 44: UK Success Stories • Have been pr
Page 45 and 46: Infrastructure: Not Good Enough •
Page 47 and 48: Cognitive Skills: Top 6 and UK, 200
Page 49 and 50: Planning Rules Matter • An import
Page 51 and 52: What is the Most Effective Role for
Page 53 and 54: Sources of Growth in Real GDP/HW in
Page 55 and 56: Wholesale and Retail Trade • Woul
Page 57:
Lessons (3) • The recovery is wea
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Slides of Nick Crafts' RES Policy Lecture

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