Comments on: So, how’s it going?

By: Patrick Love

Patrick Love — Tue, 06 Nov 2012 23:42:33 +0000

Rick,

This is based on our interim economic outlook published on 6 September. Pier Carlo Padoan, OECD Chief Economist and Deputy Secretary General says:
“Fiscal consolidation, while necessary from a medium-term perspective, is acting as a drag on short-term economic activity. An adverse feedback loop may be at work in some countries, with activity turning out weaker than assumed in budgets and thereby prompting overruns and further consolidation needs.” (page 12) You can find a pdf of the outlook here:

http://www.oecdtokyo2.org/pdf/theme_pdf/macroeconomics_pdf/20120906InterimAssessment.pdf

Patrick

By: Rick Boychuk

Rick Boychuk — Tue, 06 Nov 2012 20:29:13 +0000

Patrick,

I’m seeking the source of the OECD warning you cited: ….that although this is a medium-term policy designed to help public finances, it acts as a drag on short-term economic activity, and can even start a negative feedback loop whereby activity is weaker than expected when planning the budget, so less tax comes in and there is overspending, and then the need for more consolidation, which acts as a drag…

By: Philip Hodkinson

Philip Hodkinson — Mon, 05 Nov 2012 17:01:31 +0000

Read with interest! I have been around a long time, this allows me to look back further than most and make comparisons with earlier recessions.
Each time the UK has had a downturn in its economy, it has struggled more, each time, to reach a recovery.
The answer is quite obvious; each time there was less and less of a manufacturing base on which to support a return to growth.
Time was, less than 100 years ago, when almost all the world’s commodities were produced here. Then of course we were prosperous.
The decline in the UK’s manufacture, as with other EU countries, has simply gone too far. Some rebuilding of this, obviously not to the levels mentioned previously, but partially, is needed to redress some of the imbalance with emerging economies. If we and the EU cannot afford to trade at a sustainable level, then of course, the development of these economies will not be sustained either.
Th difficulty with this solution is that history is a hard teacher and not everyone wants to learn.

By: Sean Byrne

Sean Byrne — Mon, 29 Oct 2012 22:44:35 +0000

Dear Dr. Love,
I appreciate your hard work and that of the OECD staff, particularly in terms of OECD Insights. I find them quite informative, as one can’t be a specialist in all areas. This is apart from the great research which has been very helpful for my own research. I have to believe that you have readership, which is all of socioeconomic and age backgrounds, and catches on to the pessimism very quickly, i.e. the “Doom and Gloom”(albeit informative). I recommend the “OECD Insights” to every one of my classes, so it is great to see you folks, illustrating that there are viable solutions out there, and more importantly, a sense of hope for the future generations. Thanks again for the great article. Sean Byrne