Duncan’s Economic Blog

Econbrowser on the UK

Posted in Uncategorized by duncanseconomicblog on February 1, 2011

The well respected US blog Econbrowser has an excellent post up on the UK economy which I highly recommend – it draws together work from a variety of sources (IMF, Gavyn Davies, RGE Monitor, etc).

If you read one thing on the UK economy this month, make it this.

Two highlights are a chart from Davies and quote from RGE.

 

Our main criticism of Plan A is that it is unnecessarily front-loaded in terms of cash impact, as opposed to policy approval. It is inevitable that hastily cobbled together measures to cut costs quickly will have a more detrimental impact on the economy (i.e. a higher fiscal multiplier) than more considered measures aimed at reducing long-term spending. Likewise, the severe cuts to capital expenditure and government investment will have a higher fiscal multiplier than reforms to long-term health provision or pension costs.

3 Responses

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  1. yorksranter said, on February 1, 2011 at 2:44 pm

    Look mum, they’re all out of step except our kid!

  2. Craig said, on February 4, 2011 at 9:17 pm

    Duncan – very off topic but can you explain the UK debt repayment in relation to:

    “Of course it was much worse than that. They left us well and truly in the red. This year we’ll be spending over £43bn just on the interest on our debts.

    That’s £830m per week. Just under £119m a day. For that money, we could build a new primary school every hour. We could buy a new Chinook helicopter every day. We could take 11 million people out of paying income tax. We could triple the number of doctors in our hospitals”

    How much did labour contribute to the overall debt and how much are previous governments responsible for? How much impact will reducing the deficit have on interest payments of the overall debt?

    Apologies for being a bit off topic.


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