Public debt has jumped during the pandemic as the government has taken unprecedented action to support the economy, support that will continue to be needed for some time to come until unemployment is brought down. With the budget less than a fortnight away, the Treasury will be looking to establish a new set of fiscal rules to govern public borrowing. Past sets of rules have had a patchy record. With interest rates at historic lows, the burden of debt will be low. Interest rates stuck close to zero also mean that monetary policy cannot play its traditional role of boosting the economy during a downturn. Does this mean that fiscal rules are an unhelpful hinderance to good macroeconomic management? If we dispense with rules-based approaches, is it possible to safeguard the public finances against the risk of ‘deficit bias’ in an era of ultra-cheap debt? Finally, is there a way to walk a path between no rules and ones that are too restrictive to be helpful or credible?
- Ian Mulheirn | Executive Director, UK Policy, Tony Blair Institute for Global Change - CHAIR
- Adam Posen | President of the Peterson Institute for International Economics, former member of the Bank of England’s Monetary Policy Committee
- Gemma Tetlow | Chief Economist, Institute for Government
- Sir Robert Chote | Former Chairman of the Office for Budget Responsibility, Visiting Professor, King’s College London
- James Browne | Head of Work, Income and Inequality Analysis, Tony Blair Institute for Global Change