What explains poor growth in the UK? The IMF thinks it's fiscal policy

For the UK, and indeed other advanced economies, the most important point in today's IMF World Economic Outlook is not that it further explodes the myth - repeated again yesterday by the Chancellor - that low interest rates reflect policy "credibility" rather than economic weakness, or that it again emphasises that the UK and others could and should loosen fiscal policy in the face of that weakness. The IMF said all this about the UK back in July, as I explained then. Rather, it is that the Fund has radically revised its opinion about just how damaging the impacts of premature fiscal consolidation have been in the UK and elsewhere.

[Update, November 2012: following on from the IMF analysis, we at NIESR have now published the first rigorous quantitative estimates of the impact of coordinated fiscal consolidation in the eurozone. They show that austerity has, indeed, been self-defeating, in the sense that debt-GDP ratios are higher, rather than lower, as a consequence of the premature move to contractionary fiscal policy.]

Who's accountable for this spreadsheet? Ministers, civil servants and mistakes

A junior civil servant makes a coding error on a complicated spreadsheet.  Unfortunately, this has direct implications for a hotly debated political issue.  When the error is discovered, the Secretary of State apologises and issues an embarrassing correction.  Not surprisingly, his opposition counterpart is outraged:

"This is an extraordinary development. It really does call into into question the competence of ministers and of the government as a whole"

Fair taxes: not just about income tax

[This article originally appeared in the Independent]

The Liberal Democrats call for a "mansion tax" (that is, a higher rate of council tax for the most expensive properties), possibly supplemented by some form of wealth tax seems to have provoked a peculiarly illogical misuse of one particular statistic among economic commentators who really should know better.  Their objective appears to be to show that the "rich" are already paying more than their "fair share", and that any additional imposition would be both unfair and economically damaging.  This is, of course, an entirely legitimate argument, both as a matter of ideology and of economics. But they will have to come up with some rather more convincing facts and evidence than they have so far.  

"People aren't interested in graphs": Chris Skidmore's response to my review of "Britannia Unchained"

In an interview with the Spectator's Isabel Hardman, Chris Skidmore MP has responded to my New Statesman review of Britannia Unchained, his book with fellow MPs Kwasi Kwarteng, Priti Patel, Dominic Raab and Liz Truss . She quotes his response:

‘Well, it’s a 116-page book, there’s 433 footnotes to it. I go back to the point about data, there’s statistics, it can be backed up. The point, the broader point is that Jonathan Portes and the NIESR, you know, this is the problem we have with political discourse is that as politicians we want to get across a message and I think he was critical about it – I don’t know how well NIESR pamphlets sell, but people aren’t interested in looking at medians and graphs. We have a duty to try and broaden that message outside of the think tank zone.’

What explains low long-term interest rates: article for Liberal Democrat Voice

[This article was originally published in Liberal Democrat Voice here in response to a specific request to comment on the texts reproduced below. I have made many of the arguments below in previous blogposts, so regular readers may not find much new, but for others it may be a useful summary]. 

As the head of an independent economic research institute, it's not my job to attend the Liberal Democrat conference (or indeed that of any other party).  But, following up an FT article here, I was asked to comment on the text of a motion which argues that:

"Conference recognises that the difficult decisions taken by the Coalition Government have ensured the credibility of the UK government’s position in the financial markets allowing the UK to borrow at record low rates"

and on an amendment:

"Conference also notes that it would be a mistake to attribute record low public sector borrowing costs to accelerated fiscal consolidation rather than to a flight to relative safety."

Lazy Brits 2: Attack of the Zombies

[Starring Toby Young and Daniel Hannan MEP (title roles), Daniel Knowles and Chris Cook (data geeks), and Dr. Anna Hedge (punchline writer)]

As I hope is clear from the title, this is a nerdy post about statistics and research.  In his Sun column on Sunday, Toby Young said:

As [Daniel] Hannan points out in his book, Britain is the seventh largest economy in the world, the fourth largest military power and the fourth largest exporter.

The last point looked odd; surely the UK exports less than any of China, Germany, the US and Japan?  So I questioned it, via twitter.   First, Mr Hannan said:: "It is both true and surprising"; then, when I said that I didn't think it could possibly be right, he pointed rather vaguely to one of "the IMF, OECD, CIA Factbook".

Sterling: my part in its downfall

[this post was published September 17, 2012 in Juncture, the journal of the Institute for Public Policy Research]

The economic and political history of the UK's ill-fated experiment with the Exchange Rate Mechanism (ERM) has been picked over many times, and the broad outlines of the story are well known (for a range of well-informed views, see here). So this is more of a personal recollection of how it felt at the time.