The latest episode of my Economics Explored podcast features a conversation I had earlier this week with Nicholas Gruen of Lateral Economics regarding his recent Financial Times opinion piece on the need for an independent fiscal policy advisory body. In his article, Nicholas explained the specifics of his proposal in the context of UK institutions:
Small across-the-board cuts or increases to legislated tax rates would be a fiscal policy instrument analogous to the official bank rate in monetary policy. Just as the Bank of England’s Monetary Policy Committee sets the official bank rate, so the power to make such across-the-board adjustments could be given to an independent fiscal board, or even to the BoE, reconstituted as a consolidated Macroeconomic Stability Board.
In the podcast episode, Nicholas elaborates on why he thinks such an independent fiscal board would be desirable and why the concept shouldn’t be dismissed simply because it appears politically infeasible. I wrote a brief guest post on Club Troppo about the podcast discussion, so please check that out as well as the conversation itself.
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