David Cobham's picture
Affiliation: 
Heriot Watt University
Credentials: 
Professor of economics

Voting history

Covid-19: Economic Policy Response

Question 3: Which would be the maximal public debt you would be willing to tolerate if used effectively (as in your answers to 1 and 2 above) to support an economic recovery?

Answer:
120% of GDP (e.g. if fiscal support were doubled)
Confidence level:
Confident
Comment:
There needs to be room for further fiscal expansion if required, but a limit of 120% would help to ensure the possibility of an eventual return to normal levels (a return not to be hurried for the wrong reasons as it was after 2008).

Question 2: Which of the following would have the second greatest impact in mitigating the economic effects of the coronavirus economic crisis in the UK?

Answer:
Making unemployment benefits more generous, streamlined, or comprehensive
Confidence level:
Very confident
Comment:
This provides the key safety net when, or for whom, the other measures mentioned above fail.

Question 1: Which of the following would have the greatest impact in mitigating the economic effects of the coronavirus economic crisis?

Answer:
None of the above, other, or no opinion
Confidence level:
Very confident
Comment:
The policy measure announced by the UK government since this survey was put together - paying 80% of employees' wages up to the limit of £2500 per month - looks right to me. It could be subsumed under 'broad cash transfers' but it seems better to enter it as a separate item. It needs to be supplemented now by some comparable scheme to help the self-employed (whose activities have been so much encouraged - directly and indirectly - by government policies in the last decade in particular).

The UK Productivity Puzzle

Question 4: Which of the following policies would be your second choice of policy to boost private sector productivity, in addition to or absent your first choice?

Answer:
None of the above, other, or no opinion
Confidence level:
Very confident
Comment:
There needs to be a gradual but sustained reversal of the benefits cuts and the excessive pressures on people to take poor-quality jobs that have been introduced in the last decade (without abandoning the basic idea of ‘universal’ benefits), combined with investments in human education, notably via FE colleges and apprenticeships, so that individuals can more easily choose to get some retraining before re-entering the labour market at a higher point (and with higher skills).

In the last two questions you are asked which government policies are best suited to help the UK emerge from its productivity growth slowdown. Question 3 asks for your most preferred policy option, while question 4 asks for your second choice. You may use the comment section to outline specific policy recommendations.

Question 3: Which of the following policies would best help improve private sector productivity?

Answer:
Aggregate demand management through fiscal and/or monetary policy
Confidence level:
Very confident
Comment:
There needs to be a gradual but sustained reversal of the public expenditure cuts involved in the decade of austerity – not just a large increase in NHS spending plus a few large infrastructural projects, but a reversal of the cuts in other areas such as education and, above all, local authority funding. This in turn will encourage a revival of private sector investment.

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