The impact of alternative paths of fiscal consolidation on output and employment in the UK

Nitika Bagaria, Dawn Holland, Jonathan Portes, John Van Reenen 14 August 2012

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In 2009-2010, the UK's budget deficit was about 11% of GDP (see here); there was no dispute among economists that a credible plan for fiscal consolidation was required. The discussion turned on the timing, given the fact that short-term interest rates are effectively at zero, output is substantially below capacity, and unemployment well above most estimates of the natural rate of unemployment.

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Topics:  Global crisis Macroeconomic policy Taxation

Tags:  fiscal policy, UK, global crisis, Fiscal crisis, austerity, consolidation

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