Statistics Flashcards
How much GDP gap is mismeasurement at fault for
some argue 3%
Some argue up to 1/3
What are laggard firms
- lower 40% of productivity distribution - only account for 10% of productivity
Macro environment in 2009 and 2010
2009:
Deficit - 11.5%
Debt - 68%
2010
unemployment 8% - was 5.3 in 2007
Growth rate average 2-2.5, was at lowest of -6% in Q1 of 2009
What was the size of sturctural deficit in 2008 and 2010
2008:
40% spending, 36% receipts
2010:
46% spending, 36% receipts
What was the structural deficit in 2021/22?
1.3%
What were the deficits in 2008,2009, 2010 and 2015
2008: -0.6% surplus
2009: -1%
2010: 2%
2015: slowly decline to 0.5%
Debt and GDP in 2003 and 2021
2003:
£382bn debt, GDP was £2.057tn
2021:
£2.36tn debt, GDP £3.13tn
What were debt-gdp ratios - what is the critical value?
Pre 2008 stable at roughly 35%
- Explosive path towards unnaffordable - 85% in 2012
Reinhart and ROgoff - 90% critical value - growth at -0.1%
- Actually 2.2% so may not be as suggested
What was the deficit/GDP ratio in 2010 - what would the effect of austerity be on this
deficit/GDP was 7.6% - rising debt/GDP
- Deficit could be maximum of 1% of GDP
- Was expected to fall to 0 then turn positive by 2010 silly people
What was the debt forecast with and without austerity
What was the effect of austerity on GDP?
2010 debt forecast was 60% in 2017
-Actually 75%
Pre crisis - growth roughly 2.2%, lost out on 13% growth after 2017
Post crisis - growth roughly 0.1-0.2%
What are the deficit/gdp / debt gdp graphs for 3 countries
Germany: 3.1% deficit, 75% debt
Greece: 15.6% deficit, 120% debt
UK: 11.5% deficit, 68% debt
What are the different sizes of multipliers?
OBR spenidng multiplier - 0.6
Public investment - 1
Income tax multiplier - 0.3
In recessions IMF argues it ranges from 0.9-1.7
In the long run it is equal to 0
How much lower was the actual effect on GDP than estimated
Was £300m lower than estimated value both with and without austerity
What was the effect of the pandemic on the deficit?
Forecast higher in march 2020 - was predicted to be 50-60bn, actually 320bn
Permanent loss of 2% GDP
March 2020 predicted GDP was 100-104, actual level was 75
What was the impact of the pandemic on the debt/gdp ratio?
Expected to top out at <100%, stabilise and then fall gently
Effect of trussonomics
Mini budget - forecast to be 36% GDP, fell to 35%
Forecast borrowing rate £99bn, actual rate £200bn
- Only stabilised around £100bn in 2026 - £70bn higher than it should have been
Debt - GDP:
Forecast to fall from 84% in 2020 to 80% in 2026
Instead, stable at 85% from 2020-22, rises up to 97% in 2026
Debts barely on falling path - estimated to fall by £28bn in 3 years, isntead falling by £9bn - at 97% of GDP instead of 80%
Exchange rates:
- Falling but stable at 1.15, fell to 1,075 against the dollar
Bond yields:
5 year bond yield, rising, stable at 3% - rose to 4.5%
30 year gilt - Sep 23 3.9%, Sep 28 5%
Effect on New austerity
public borrowing expected 6% - with mini budget would be 8%
Bank rate expected to be 3% - with mini budget 5%
Interest on gilts fell from about 1.7% in october to 0.7% late nobvermber
Tax as a % of income increased above 37%, mini budget estimated it to be 35%
What were the different values of spending:
22-23: 1bn
23-24: 7bn
24-25: 8bn - 6bn
25-26: -7bn
26-27: -14bn
27-28: -21bn
