Lockdown measures around the world show that governments can still make deep interventions in the economy. As the costs of mitigation policies mount, it looks likely that the state will need to provide large-scale fiscal support for months to come. The measures imposed to combat coronavirus are both unprecedented and large-scale. But from an economic […]
Category: Public spending, taxes & debt
To deliver its policy objectives, the government often has to decide on the extent to which it should outsource provision of public services to the private sector. Although outsourcing can help cut costs, evidence from the pandemic suggests that it may not always be the optimal strategy. The decision of whether or not to outsource […]
If the government decides to raise taxes after the pandemic, an alternative to taxes on work or spending could by a one-off wealth tax. A well-designed tax of this kind could raise significant revenue in a fair and efficient way without excessive administrative costs. Despite recent positive news of the various effective vaccines, the Covid-19 […]
A big rise in government borrowing has been an essential policy response to the health and economic effects of Covid-19. History indicates the importance of supporting the economic recovery rather than worrying about what is a temporary shock to the public finances. The UK public finances are undergoing a crisis of a magnitude that we […]
Lockdowns place burdens on businesses forced to close and people unable to work. The perspective of public economists, who have long studied government interventions in markets, offers insights on the strictness of enforced immobility and its impact on the economy and inequality. There are basically two ways in which governments can intervene in the economy […]
The Covid-19 crisis has renewed interest in the merits of introducing a tax on net wealth in the UK. A key issue to consider is whether such a tax should be operated uniformly across the country or with some elements devolved to the governments in Edinburgh, Cardiff and Belfast. There has been significant recent interest […]
The UK government’s announcement of a rise in national insurance contributions to pay for additional health and social care spending has been met with some criticism in the devolved nations. The practical implications of the decision to ring-fence the funding are limited, but it could remain a source of tension. On 7 September 2021, the […]
How public debt is managed is a critical question for any national government acting on behalf of its current and future citizens. It is of particular importance to a newly independent country making choices about its approach to public spending and taxation. The statecraft of a new country must include debt management and choice of […]
The UK Covid-19 Inquiry provides an opportunity to evaluate how expertise, models and informal analysis contributed to the overall outcome for mortality and the economy. Key questions surround the Treasury’s decision not to use integrated ‘epi-macro modelling’ to inform its policy-making. With the worst of the pandemic now behind us, it is time to take […]
Bold fiscal policy has aimed to mitigate the collapse in UK economic activity, but the recession makes the public finances more precarious. How can we assess the fiscal consequences of the crisis – and the interplay between fiscal measures and the macroeconomy? Early estimates suggest that the UK economy contracted by 25% in the first […]