Budget 2013: Has Osborne got the right fiscal/monetary policy mix?



In his Budget, Chancellor George Osborne described the UK strategy as one of monetary activism and fiscal responsibility

However, the world is coming round to the idea that a tight fiscal, loose monetary policy mix is unlikely to support a recovery in growth when interest rates are close to zero and consumers are intent on paying down debt. A more effective approach would be to ease back on austerity until a recovery is well under way. The current policy mix, leaning ever more heavily on unconventional easing by an unleashed Bank of England, risks a continued slide in the value of the pound and a more extended period of stagflation. The UK's ambitious fiscal tightening plans gained plaudits from the Intern...

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