Date: Wednesday 16 November 2016
Time: 18:00 -19:30
Speakers: Graham Gudgin and Ken Coutts
Talk Title: 'Can fiscal and monetary policy offset macro-economic losses from Brexit’
Location: Ramsden Room, St Catharine's College
The next St Catharine's Political Economy Seminar in the series on the Economics of Austerity, will be held on 16 November, 2016 - Graham Gudgin and Ken Coutts will give a talk on ‘Can fiscal and monetary policy offset macro-economic losses from Brexit'. The seminar will be held in the RAMSDEN Room at St Catharine's College from 6.00-7.30 pm. All are welcome. The seminar series is supported by the Cambridge Journal of Economics and the Economics and Policy Group at the Judge Business School.
Graham Gudgin is currently Honorary Research Associate at the Centre For Business Research (CBR) in the Judge Business School at the University of Cambridge. He was director of the Northern Ireland Economic Research Centre from 1985 to 1998 when he became Special Adviser to the First Minister in the NI Assembly until 2002. Prior to this he was a member of the Cambridge Economic Policy Group (CEPG) under the late Wynne Godley. He is the author of a large number of books, reports and journal articles on regional economic growth in the UK and on the growth of small firms. Current research interests at the CBR are in UK macro-economic policy. Together with Ken Coutts at Cambridge and colleagues at the Ulster University an econometric model of the UK has been constructed to undertake policy simulations for the UK economy. The first forecast report (winter 2015) and a description of the model can be found on the CBR website.
Ken Coutts is currently Honorary Research Associate at the Centre For Business Research (CBR) in the Judge Business School at the University of Cambridge and Life Fellow in Economics, Selwyn College, Cambridge.
He was formerly Director of Studies in the Faculty of Economics, University of Cambridge. A member of the Cambridge Economic Policy Group in his younger career, led by Wynne Godley, his main interests are in macroeconomics, monetary and fiscal policy, trade, capital flows and balance of payments. He has published widely in these areas.
He has also written extensively on the pricing behaviour of manufacturing industries in the UK and Australia. He is currently working on macro-economic policy issues in the UK.
Graham Gudgin and Ken Coutts will talk on 'Can fiscal and monetary policy offset macro-economic losses from Brexit?' They will describe key features of their Keynesian CBR macro-economic model of the UK economy and how it differs from the Government's OBR model. The CBR model is then used to investigate the economics of Brexit. They take the view that normal forecasts are not currently possible due to the lack of reliable information on the future shape of the UK's trade arrangements and on companies short-term and long-term reaction to these uncertainties. The best that can be done at present is to generate scenarios based on assumptions about these uncertainties. A series of plausible assumptions are investigated including the Treasury's estimates of the impact of leaving the EU single market.
The macro-economic impact of the assumptions turns out to be considerably dependent on the extent to which short-term declines in business investment due to 'uncertainty' represent investment postponed rather than permanently cancelled. The impact also depends on whether monetary policy is accommodating in face of rising consumer price inflation and on the extent to which fiscal austerity is delayed or reversed.