How can we boost Britain’s productivity growth and trade post-Brexit? What role does national government play in creating an enabling macroeconomic environment, and how can it do this well?
This work stream connects into the development of regional and sector-based industrial strategies, as well as fiscal and monetary policy, competition policy, corporate governance and the impact of trade and globalisation on inward investment, the demand for skills and creation of quality jobs.
Central banks’ drive to stabilise inflation in an increasingly globalised world has distorted the distribution of income
Our response and analysis of the 2016 Budget
Analysis ahead of the 2016 Budget
Why we need a more democratic capitalism
Why we need a more democratic capitalism
The growing inequality of trust in business reflects an increasingly pervasive view that large sections of society are no longer benefiting from our current economic system. If this chasm of trust is to be bridged, business and government need to create a far more democratic and inclusive economy. The failure to tackle this problem is likely to result an increase in the politics of fear which could ultimately undermine both our individual liberty and also our long-term prosperity.
The chancellor’s decision to devolve the full revenues from business rates to local areas is a radical step forward for England’s regions. But for local leaders to increase investment in infrastructure, they need to be able to set rates locally and borrow against these revenues.
The chancellor’s decision to devolve the full revenues from business rates to local areas is a radical step forward for England’s regions. But for local leaders to increase investment in infrastructure, they need to be able to set rates locally and borrow against these revenues. Without this flexibility there will be only minimal increases in investment. Full fiscal devolution to local authority partnerships that reflect local economies, if done after resolving longstanding flaws with the tax itself, could enable areas to generate up to an extra one per cent of revenues above their current trend rates. This would enable councils in London to finance large-scale projects such as Crossrail 2 or those in Manchester to fund a major regional transport hub.
Continue reading “Osborne’s fiscal devolution must go much further to transform local growth”
The CMU should focus on the fast-growth and innovative firms that truly make a difference and are capital constrained
The CMU should focus on the fast-growth and innovative firms that truly make a difference and are capital constrained
The long awaited Action Plan on Building a Capital Markets Union was published by the European commission on 30 September. Commissioner Jonathan Hill should be applauded for the scope of the plan and also the pragmatic nature of his approach. He has constantly stated that he wishes to focus on whatever is required to drive growth and jobs, taking a bottom-up approach rather than grandiose plans per se.
Continue reading “The Capital Markets Union needs to do more to help risk-takers”
Social democrats need to shift away from an exclusive reliance on tax and redistribution towards thinking more about making markets work at the micro level
Continue reading “Making markets work: how effective regulation reduces reliance on taxation”
How do we stop the financial system from occasionally blowing up the world and producing – as it has post 2007/8 – a severe post-crisis recession?
How do we stop the financial system from occasionally blowing up the world and producing – as it has post 2007/8 – a severe post-crisis recession?
How do we stop the financial system from occasionally blowing up the world and producing – as it has post 2007/8 – a severe post-crisis recession? Let me start with the fact that finance has got much bigger. Over the last 50 years, finance has come to play a far bigger role in modern advanced economies. In the 1950s the total finance sector in the US accounted for about 2.5 per cent of GDP; by 2007, that was about eight per cent of GDP. There is a very similar growth pattern in the UK. In other countries the absolute figures are often smaller, but the direction of change is the same.
Continue reading “The social value of finance: problems and solutions”
How can the state deter short-termism in finance and facilitate a better environment for the ‘patient capital’ needed for growth?
How can the state deter short-termism in finance and facilitate a better environment for the ‘patient capital’ needed for growth?
Consider two countries – China and Italy. As recently as 1990, these economies were equal in size as measured by aggregate GDP at purchasing power parity exchange rates. But let us now put these countries on quite different trajectories for capital accumulation. Let China begin investing at double-digit rates for 20-plus years, while Italy accumulates capital at a rate of only two per cent per year. By 2013, China is now seven times larger than Italy. Indeed, China is creating an economy the size of Italy’s every two years; an economy the size of Greece’s every quarter; and an economy the size of Cyprus’ every week.
