Dr Rob Calvert Jump, with Jo Michell from UWE, has published a report on the dangerous fiction of fiscal 'black holes'.
The report, published today by the Progressive Economy Forum, shows that the widely-reported £50bn “hole” in the public finances is the result of government accountancy rules and highly uncertain forecasts, not tax or spending decisions.
BBC Today and The Times covered the report.
The Times writes:
"Using Office for Budget Responsibility forecasts, the authors of the research, Jo Michell and Rob Calvert Jump, conclude that small changes in forecasts for future interest rates and growth, and what is counted as debt, alter the size of the “hole”. These changes to forecasts and accountancy rules produce far bigger effects on the £50 billion “hole” than any changes in spending and taxes the government is reported to be considering. “There is a consensus among economists that austerity does significant damage to an economy’s potential, undermining growth, as the last decade has shown,” Calvert Jump said."
BBC Today writes:
"There is now a consensus among economists that austerity does significant damage to an economy's potential, undermining growth, as the experience of the last decade in Britain has shown us," Mr Calvert Jump said.
"Further austerity will do far more damage than a 'fiscal hole' that disappears with tweaks to models or accounting rules."
The BBC article peaked as the 4thmost read article on the BBC website, with BBC Radio 4 also featuring the report.
Links:
The Dangerous Fiction of the "Fiscal Black Hole" * The Progressive Economy Forum
