Recession Ready?: Assessing the UK's Macroeconomic Framework
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Asset and Debt Deflation in the United States: How Far Can Equity Prices Fall?
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Arestis, Philip; Karakitsos, Elias Research Report Asset and debt deflation in the United States: How far can equity prices fall? Public Policy Brief, No. 73 Provided in Cooperation with: Levy Economics Institute of Bard College Suggested Citation: Arestis, Philip; Karakitsos, Elias (2003) : Asset and debt deflation in the United States: How far can equity prices fall?, Public Policy Brief, No. 73, ISBN 1931493219, Levy Economics Institute of Bard College, Annandale-on-Hudson, NY This Version is available at: http://hdl.handle.net/10419/54323 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu ® The Levy Economics Institute of Bard College Public Policy Brief ASSET AND DEBT DEFLATION IN THE UNITED STATES How Far Can Equity Prices Fall? PHILIP ARESTIS AND ELIAS KARAKITSOS INSTITUTE VY No. -
Quantitative Easing Inquiry
TRADES UNION CONGRESS – WRITTEN EVIDENCE (QEI0016) QUANTITATIVE EASING INQUIRY The TUC exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 48 member unions. TUC takes a view on QE, and macroeconomic policy more generally, because economic outcomes – above all recession – affect jobs, pay and working conditions. We want to see economic policy that provides work for all who want it, with inflation contained and a fair distribution of incomes. It is important to recognise the exceptional context in which QE has been so extensively used: first through the most severe global financial crisis since the great depression, second alongside government pursuit of contractionary policy, third alongside financial instability caused by the referendum result, and finally the pandemic. The approach follows longer-standing convention that monetary policy is the main tool for stabilising economies (so-called ‘monetary dominance’). This has had broader impacts, not least the consequence on public services and household incomes of cutting government spending, as well as the distributional impacts of QE. There are concerns too that the arrangement has fostered renewed financial excess long pre-dating the pandemic. TUC call for a wider inquiry into these outcomes and the relation with monetary and fiscal policies.1 1. Has the expansion of the Bank of England’s Quantitative Easing programme undermined the independence of the Bank, or the perception of its independence? What are the implications of this? Given monetary dominance, QE followed logically after central bank rates were cut to near zero. -
Speech by Martin Weale at the University of Nottingham, Tuesday
Unconventional monetary policy Speech given by Martin Weale, External Member of the Monetary Policy Committee University of Nottingham 8 March 2016 I am grateful to Andrew Blake, Alex Harberis and Richard Harrison for helpful discussions, to Tomasz Wieladek for the work he has done with me on both asset purchases and forward guidance and to Kristin Forbes, Tomas Key, Benjamin Nelson, Minouche Shafik, James Talbot, Matthew Tong, Gertjan Vlieghe and Sebastian Walsh for very helpful comments. 1 All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx Introduction Thank you for inviting me here today. I would like to talk about unconventional monetary policy. I am speaking to you about this not because I anticipate that the Monetary Policy Committee will have recourse to expand its use of unconventional policy any time soon. As we said in our most recent set of minutes, we collectively believe it more likely than not that the next move in rates will be up. I certainly consider this to be the most likely direction for policy. The UK labour market suggests that medium-term inflationary pressures are building rather than easing; wage growth may have disappointed, but a year of zero inflation does not seem to have depressed pay prospects further. However, I want to discuss unconventional policy options today because the Committee does not want to be a monetary equivalent of King Æthelred the Unready.1 It is as important to consider what we could do in the event of unlikely outcomes as the more likely scenarios. In particular, there is much to be said for reviewing the unconventional policy the MPC has already conducted, especially as the passage of time has given us a clearer insight into its effects. -
Re-Appointment of Sir Jon Cunliffe As Deputy Governor for Financial Stability at the Bank of England
House of Commons Treasury Committee Re-appointment of Sir Jon Cunliffe as Deputy Governor for Financial Stability at the Bank of England Twenty-Third Report of Session 2017–19 Report, together with formal minutes relating to the report Ordered by the House of Commons to be printed 17 October 2018 HC 1626 Published on 18 October 2018 by authority of the House of Commons The Treasury Committee The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue and Customs and associated public bodies Current membership Nicky Morgan MP (Conservative, Loughborough) (Chair) Rushanara Ali MP (Labour, Bethnal Green and Bow) Mr Simon Clarke MP (Conservative, Middlesbrough South and East Cleveland) Charlie Elphicke MP (Independent, Dover) Stephen Hammond MP (Conservative, Wimbledon) Stewart Hosie MP (Scottish National Party, Dundee East) Mr Alister Jack MP (Conservative, Dumfries and Galloway) Alison McGovern MP (Labour, Wirral South) Catherine McKinnell MP (Labour, Newcastle upon Tyne North) John Mann MP (Labour, Bassetlaw) Wes Streeting MP (Labour, Ilford North) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No. 152. These are available on the internet via www.parliament.uk. Publication Committee reports are published on the Committee’s website at www.parliament.uk/treascom and in print by Order of the House. Evidence relating to this report is published on the inquiry -
Appointment of Michael Saunders to the Bank of England Monetary Policy Committee
House of Commons Treasury Committee Appointment of Michael Saunders to the Bank of England Monetary Policy Committee Eighth Report of Session 2016–17 Report, together with formal minutes relating to the report Ordered by the House of Commons to be printed 11 October 2016 HC 729 Published on 17 October 2016 by authority of the House of Commons The Treasury Committee The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue and Customs and associated public bodies. Current membership Mr Andrew Tyrie MP (Conservative, Chichester) (Chair) Mr Steve Baker MP (Conservative, Wycombe) Mark Garnier MP (Conservative, Wyre Forest) Helen Goodman MP (Labour, Bishop Auckland) Stephen Hammond MP (Conservative, Wimbledon) George Kerevan MP (Scottish National Party, East Lothian) John Mann MP (Labour, Bassetlaw) Chris Philp MP (Conservative, Croydon South) Mr Jacob Rees-Mogg MP (Conservative, North East Somerset) Rachel Reeves MP (Labour, Leeds West) Wes Streeting MP (Labour, Ilford North) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication Committee reports are published on the Committee’s website at www.parliament.uk/treascom and in print by Order of the House. Evidence relating to this report is published on the inquiry page of the Committee’s website. Committee staff The current staff of the -
Speech Given by Gertjan Vlieghe at the Durham University on Monday
An update on the economic outlook Speech given by Gertjan Vlieghe, External Member of the Monetary Policy Committee Durham University 22 February 2021 I would like to thank Lennart Brandt, Rodrigo Guimaraes, Andrew Bailey, Ben Broadbent, Julia Giese, Jamie Lenney, Becky Maule, Nick McLaren, Michael McLeay, Michael Saunders, Matt Swannell, Matt Tong, and Silvana Tenreyro for comments or help with data and analysis. 1 All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice In this speech I will focus on recent developments in the evolution of the pandemic and how these affect the outlook for the economy and monetary policy. 1. The current economic situation The economy has been on an extraordinary trajectory since the start of last year, and it is important not to lose sight of where we are. After falling by about 25% last spring, GDP recovered sharply over the summer, but has stagnated since the late autumn, and has probably fallen outright at the start of this year. In December, the latest available data, GDP was just under 7% below its level of 2019 Q4. Compared with the evolution of GDP in the financial crisis (see Chart 1), we are still only at levels comparable with the trough of the financial crisis. Our expectation is that the recovery will be more rapid than it was then, as illustrated by the red diamonds showing our February central projection. I will discuss that in more detail in a moment. But for now I want to emphasise how far we still have to travel in this recovery. -
Economic Crisis, Whether They Have a Pattern?
The 2nd ICVHE The 2nd International Conference on Vocational Higher Education (ICVHE) 2017 “The Importance on Advancing Vocational Education to Meet Contemporary Labor Demands” Volume 2018 Conference Paper Economic Crisis, Whether They Have a Pattern?—A Historical Review Rahmat Yuliawan Study Program of Secretary and Office Management, Faculty of Vocational Studies Airlangga University Abstract Purpose: The global economic recession appeared several times and became a dark history and tragedy for the world economy; the global economic crisis emerged at least 15 times, from the Panic of 1797, which lasted for recent years, to the depression in 1807, Panics of 1819, 1837, 1857, 1873, or the most phenomenal economic crisis known as the prolonged depression. This depression sustained for a 23-year period since 1873 to 1896. The collapse of the Vienna Stock Exchange caused the economic depression that spread throughout the world. It is very important to note that this phenomenon is inversely proportional to the incident in the United States, where at this period, the global industrial production is increasing rapidly. In the United States, for Corresponding Author: example, the production growth is over four times. Not to mention the panic in 1893, Rahmat Yuliawan Recession World War I, the Great Depression of 1929, recession in 1953, the Oil Crisis of Received: 8 June 2018 1973, Recession Beginning in 1980, reviewer in the early 1990s, recession, beginning Accepted: 17 July 2018 in 2000, and most recently, namely the Great Depression in 2008 due to several Published: 8 August 2018 factors, including rising oil prices caused rise in the price of food around the world, Publishing services provided by the credit crisis and the bankruptcy of various investor banks, rising unemployment, Knowledge E causing global inflation. -
Managing Much Elevated Public Debt Managing Much-Elevated Public Debt 225
lnstitute for Fiscal Studies IFS Green Budget 2020: Chapter 5 Carl Emmerson David Miles Isabel Stockton Managing much elevated public debt Managing much-elevated public debt 225 5. Managing much- elevated public debt Carl Emmerson (IFS), David Miles (Imperial College London) and Isabel Stockton (IFS) Key findings 1 The COVID-19 crisis has pushed up government borrowing substantially, meaning that the Debt Management Office (DMO) will need to sell a much larger value of gilts than normal. Our central scenario is for over £1.5 trillion to be raised through gilt issuance over the next five years, double the £760 billion forecast in the March 2020 Budget. There is considerable uncertainty around this amount. 2 The characteristics of the gilts that the DMO issues will have implications for the public finances in the longer term. The enormous value of debt being issued means that the costs of financing it just slightly wrong will be large. 3 Short- and long-maturity gilt yields have fallen even further from the already low rates seen prior to the pandemic. A similar phenomenon can be seen in the Eurozone and the US, where – as in the UK – yields are now much closer to the very low rates that have become typical for Japan. 4 The expansion of the Bank of England’s programme of quantitative easing means it bought £236 billion of gilts between March and September 2020, almost exactly the same as the £227 billion of gilts issued by the DMO over the same period. As a result, private borrowing has not been crowded out by The Institute for Fiscal Studies, October 2020 226 The IFS Green Budget: October 2020 government borrowing. -
Speech by Gertjan Vlieghe
Assessing the Health of the Economy Speech given by Gertjan Vlieghe, External Member of the Monetary Policy Committee Bank of England 20 October 2020 I would like to thank Lennart Brandt, Rodrigo Guimaraes, Andrew Bailey, Ben Broadbent, Jon Cunliffe, Pavandeep Dhami, Andy Haldane, Jonathan Haskel, Jamie Lenney, Michael Saunders, Martin Seneca, Matt Swannell, and Silvana Tenreyro for comments and help with data and analysis. 1 All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice 1. Where are we? The current state of the economy Let me start with a bit of simple arithmetic to illustrate what is happening to the UK economy. If something drops by a quarter and then increases by a quarter, it ends up a little more than 6% short of where it started. It turns out that this is, approximately, what has happened to the UK economy during the pandemic so far. It’s actually a little bit worse. Between February and April, GDP fell by 25%. Since then, between April and August, GDP has risen by 22%. In August, GDP was about 9% below its February level. Rather than trying to figure out what letter of the alphabet this looks like, I would like to give you some context of what it means to be 9% short of where you started, in GDP terms. In the global financial crisis, UK GDP declined by 6% relative to its pre-crisis peak. Since we are 9% short of the pre-pandemic peak, in GDP terms, we are therefore not even at the bottom of the financial crisis, as shown in Chart 1. -
Output and Expenditure in the Last Three UK Recessions Economic & Labour Market Review | Vol 4 | No 8 | August 2010
Economic & Labour Market Review | Vol 4 | No 8 | August 2010 ARTICLE Output and Graeme Chamberlin Offi ce for National Statistics expenditure in the last three UK recessions SUMMARY he latest Preliminary estimate of Gross incomplete science, and here much depends Domestic Product (GDP) reported on the defi nition being applied. Data This article describes the main features that the UK economy grew by 1.1 per revisions can also complicate matters by of the last three UK recessions using the T cent in the second quarter of 2010 – the changing the perceived history of economic output and expenditure measures of Gross third successive quarter of positive growth. time series, meaning that dates of past Domestic Product (GDP) to refl ect supply Th is follows the severest recession since the cycles may also change over time. For these and demand activity in the economy. The Second World War, when between 2008 reasons dating business cycles is oft en most recent recession saw a similar peak Q1 and 2009 Q3, GDP contracted for six a precarious task, even with the benefi t to trough fall in GDP as the early 1980s successive quarters as the level of output of hindsight. Th e Business Cycle Dating recession. Both these recessions, which fell from peak to trough by 6.4 per cent. Committee, based at the National Bureau coincided with a period of downturn in Now that it appears a recovery is underway, of Economic Research (NBER) which is the the global economy, were more severe and following recent publication of the leading association of academic economists than the early 1990s recession where the Blue Book where National Accounts are in the US and considered to be a global peak to trough fall in output was relatively benchmarked to more reliable annual data authority on business cycle dating, still modest. -
Bank of England Monetary Policy Report February 2021
Monetary Policy Committee Monetary Policy Report February 2021 Monetary Policy Report February 2021 Monetary policy at the Bank of England The objectives of monetary policy The Bank’s Monetary Policy Committee (MPC) sets monetary policy to keep inflation low and stable, which supports growth and jobs. Subject to maintaining price stability, the MPC is also required to support the Government’s economic policy. The Government has set the MPC a target for the 12-month increase in the Consumer Prices Index of 2%. The 2% inflation target is symmetric and applies at all times. The MPC’s remit recognises, however, that the actual inflation rate will depart from its target as a result of shocks and disturbances, and that attempts to keep inflation at target in these circumstances may cause undesirable volatility in output. In exceptional circumstances, the appropriate horizon for returning inflation to target can vary. The MPC will communicate how and when it intends to return inflation to the target. The instruments of monetary policy The MPC currently uses two main monetary policy tools. First, we set the interest rate that banks and building societies earn on deposits, or ‘reserves’, placed with the Bank of England – this is Bank Rate. Second, we can buy government and corporate bonds, financed by the issuance of central bank reserves – this is asset purchases or quantitative easing. The Monetary Policy Report The MPC is committed to clear, transparent communication. The Monetary Policy Report (MPR) is a key part of that. It allows the MPC to share its thinking and explain the reasons for its decisions. -
The Labour Market Story: the UK Following Recession
The Labour Market Story: The UK Following Recession Briefing Paper July 2014 The Labour Market Story: The UK Following Recession The Labour Market Story: The UK Following Recession Briefing Paper July 2014 The Labour Market Story: The UK Following Recession Table of Contents Executive Summary ............................................................................................. v 1 The UK economy: recession, recovery and potential .............................. 1 1.1 Recession and recovery ......................................................................................... 1 1.2 Productivity .............................................................................................................. 6 1.3 Competitiveness ...................................................................................................... 8 1.4 Industry sectors ..................................................................................................... 12 1.5 Spatial variation in economic performance ........................................................ 15 2 The labour market ..................................................................................... 19 2.1 Unemployment and job creation .......................................................................... 19 2.2 Employment: a range of experiences .................................................................. 23 2.3 Changing employment practices ......................................................................... 27 2.4 Migration and the labour market .........................................................................