David Miles's picture
Affiliation: 
Imperial College
Credentials: 
Professor of economics

Voting history

The Economic Cost of School Closures

Question 2: To what extent will school closures increase inequality in human capital development?

Answer:
By a large amount and persistently
Confidence level:
Confident
Comment:
The damage to education done by school closures has been very unequal - the least well off have been set back by the most. Evidence suggests that 6 months of virtually no schooling is very damaging to future incomes, and many of those from the poorest groups seem to have experienced something close to that.

Question 1:What damage will school closures have on economic growth over a 10-15 year horizon?

Answer:
Moderate
Confidence level:
Confident
Comment:
In terms of aggregate growth the impacts will probably be moderate but not trivial. Cohorts with current ages from 5 to 18 have been affected by school closures. Fifteen years from now they will be aged 20 to 33 so the great majority will be of working age. They could make up around 25% to 30% of the workforce. If the lasting damage to their productivity and job prospects is only a few percentage points - say 3% to 6% - it will mean GDP is then lower by a percent or two.

Will COVID-19 Cause Permanent Damage to the UK Economy?

Question 2: Which aspect of the economy poses the greatest risk for a slow recovery?

Answer:
Labour markets (e.g. unemployment hysteresis effects)
Confidence level:
Not confident

Question 1: How quickly will the economy rebound (e.g. to the pre-pandemic trend) once the COVID-19 pandemic has been contained and absent major policy interventions? 

Answer:
The economy will recover within a small number (1-5) of years
Confidence level:
Not confident
Comment:
It may take a few years before recovery is complete - a V shaped recovery with output back to the pre-crisis levels by early 2021 no longer seems plausible given the likelihood of some restrictions lasting much of this year and the persistent effects of spells of unemployment. Recovery within 4-5 years seems more likely than within 1 year.

COVID-19 and UK Public Finances

Question 2: What is the best way to (eventually) reduce public deficits and debt?

Answer:
None of the above, other, or no opinion
Confidence level:
Confident
Comment:
The best way is to do so gradually (bond markets permitting) and let economic growth do its work. Should real interest rates on gilts remain at negative levels it will not take much growth to bring D/GDP down.

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