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Economics & Social Policy Blogs
Policy Exchange Director of Research & Head of Economics and Social Policy, Warwick Lightfoot, looks at the anxiety surrounding the US Debt Ceiling. He is confident that the American economy has the capacity to service a growing public debt, but questions whether her federal political institutions can be relied on to do so in a predictable way in the manner envisaged by Alexander Hamilton’s the first US Treasury Secretary, who established the credit of the US and laid the foundations for Treaury debt to serve as the world’s risk free benchmark.
Policy Exchange Chief Economist – and former Special Adviser to the Northern Ireland First Minister – Graham Gudgin responds to Irish Taoiseach Leo Varadkar’s proposals for the Irish Border to be moved to the Irish Sea after Brexit. Gudgin states that this new tough line from Dublin on the Irish Border is an unhelpful change of direction on an already complex issue — and that Varadkar’s decision to cease work on a potential electronic Border is particularly unwelcome. Moreover, his call in Belfast for the UK to negotiate a bespoke customs unions deal with the EU would require a special dispensation from the EU to allow the UK to agree new trade deals with third countries. This would be a major departure from EU practice — and is unlikely to be agreed.
Michael Taylor — Policy Exchange’s Economics Research Fellow — considers whether it’s right to assume that migration has a positive effect on productivity and living standards. He assesses the UK’s recent experience in terms of population expansion and the growth rate of GDP per head, before concluding that what ultimately matters is living standards, and that the UK’s performance has been ‘disappointing in recent years’.
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on the latest reports from the United States, which show that its economy continues to expand steadily while unemployment continues to fall and the number of jobs increases. He contends that on the estimates given, the American economy ‘is at full employment and policy makers should be considering removing sources of stimulus from aggregate monetary demand, rather than looking to increase demand’.
Mike Taylor — Policy Exchange’s Economics Research Fellow — reflects on the IMF’s recent downgrading of its 2017 GDP forecast for the UK from 2 per cent to 1.7 per cent, which coincided with its upgrading of its euro area forecast from 1.7 per cent to 1.9 per cent. Pointing out that the areas are in different stages of their economic cycles, he concludes that ‘structurally, the UK is in better shape to deal with the bumps in the road ahead’.
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on ongoing debate in the States about the trend rate of growth and the relative performance of the US economy. He argues that while America retains great relative strengths, it is ‘not immune from the structural impediments that hinder other advanced economies with developed welfare states’.
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on recent research from the economics department of the Federal Reserve Bank of Minneapolis. Different scenarios are considered regarding potential EU and UK approaches to foreign direct investment, leading Lightfoot to conclude that ‘being open to such investment will be the key to improving the UK’s economic well-being’.
Policy Exchange’s Economic & Social Policy Research Fellow, Jonathan Dupont, writes about the debate within the Cabinet about the cap on public sector pay, for The Times’ Red Box. He suggests that, while the cap ‘should come to an end soon’, this ‘should be done in a systematic manner, taking into account the many difficult trade-offs involved, and what is affordable’.
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on the big questions facing central banks as they get ready to end the unconventional policies they developed in response to the credit crunch and Great Recession.
Writing on CapX, Jonathan Dupont – Policy Exchange Economic & Social Policy Research Fellow – explains why UK foreign aid should complement the market, not replace it.