Macroeconomics: UK economy, IB Economics

Phillip Inman looks at the government's record in managing large-scale infrastructure investment and argues that a desire to cuts costs not only reduces the quality of infrastructure investment but also counter-intuitively increases costs. 

Strangely, for a Guardian journalist, he's got a lot in common with the IEA's David Myddleton whose 2007 paper "They Meant Well, Government Project Disasters" looks sat six government projects over 80 years that were abject failures. Were this book to be revised, I suspect that HS2 and a variety of new IT projects would get honourable mentions.  

Policymaking in the raw - with the Prime Minister getting advice about the dangers of her growth plan, although note that two of her advisors are Fellows of the IEA - one of whom also writes for the Daily Telegraph. 

I wonder if they reflect that a free market pro-growth programme has been rejected by....the free market. No doubt it's not the fault of the markets, in which case it must be the fault of the government. 

However, there does seem to be a consensus that policymaking requires credibility, transparency and accountability. Of the three, from a political point of view, it's only had the latter. 

Has the debate over the public finances changed? Certainly the Guardian thinks so, with the right-wing Institute for Economic Affairs publishing a research paper that argues that we can live with higher levels of debt.

However, I wonder whether the purpose of the paper is less about the economics of the debt, and rather more about the other issues it raises - the suggestion is that the government should look to be prudent, but fostering growth and deregulating is seen as a better way of paying of the debt that increasing taxes. Given the libertarian bent of the think-tank, I suspect that this is more the issue.

This clip doesn't have much in the way of high quality production values but it's a very clear introduction to the ways in which the UK government might ultimately pay for the Covid-19 intervention policies that have been adopted. 

Larry Elliott summarises the latest interest rate decision arguing that in holding rates, the Bank of England are trying to send out the message that they're 'serious' about tackling inflation. However, he's also in the camp - along with those unusual bedfellows the TUC and the Institute for Economic Affairs - that the next move is going to be for rates to fall. 

Thus, whilst Andrew Bailey is 'hawkish', most people believe that given the prevailing economic environment means that interest rates are going to fall next time round. 

And here's what the Guardian believes could be the supply-side agenda that the government commits to - deregulation across the board, notably in childcare and education, and the abolition of corporation tax. 

Quite how this is all going to occur, not least given last year's commitment to a global minimum level of corporation tax, heaven only knows, but you can't say you haven't been warned. 

Len Shackleton at the IEA looks at solutions to the current unemployment situation, arguing that many of the proposed solutions - investment in technology, increased infrastructure investment, jobs subsidies.

He argues that most of the solutions posited by the state are inefficient, and instead look for solutions in the free market, via deregulation. Who would have thought that the IEA would hae thought this.