The UK economy seems to be continuing its slow recovery – today brought figures showing a modest rise in investment in Q3 after the previous quarter’s decline, although consumer spending is a bigger contributor to GDP growth, and the housing market seems – as ever – to be one of the main engines of growth. However, the Bank of England cast doubt on the quality of the investment figures, which have been volatile, and it would be good to see it expanding more consistently.
The uncertainties about the outlook make this a good time for us to have published in the Perspectives series Andrew Sentance’s Rediscovering Growth: After the Crisis.*
Rediscovering Growth: After the Crisis (Perspectives)
Andrew has blogged about the book himself – here at The Hawk Talks and here on some of the implications of the ‘new normal’ of slow growth for airports at (pdf) PWC. So I won’t try to sum up his views myself. Here’s what he says are not the reasons for a lacklustre outlook – read the book to discover his explanation!
There are many misunderstandings about the reasons for disappointing growth. It is not due to a deflationary global economy, as in the 1930s. Emerging market economies have not had difficulty finding growth opportunities – and their performance has been strong both before and since the crisis. Inflation has been a bigger problem than deflation for many economies around the world since the financial crisis – including the UK. Nor is weak growth the product of restrictive economic policies – fiscal austerity or a lack of monetary stimulus. Across most western economies, government spending restraint and tax increases have not been severe, and monetary policy remains extremely loose.
*Amazon has sold out currently and the e-book will be out around the end of this week – meanwhile, order direct with free UK P&P from the LPP website, http://londonpublishingpartnership.co.uk/rediscovering-growth-after-the-crisis/