My paper for the Sheffield Political Economy Research Institute on the recovery and the failure of economic rebalancing.
In 2013, economic growth in Britain started to gather pace, after several years of under-performance. This has led to claims that the British economy is finally recovering, and moreover, that the ‘austerity’ pursued by the coalition government since 2010 has been successful. This paper offers a sustained scrutiny of such claims, and examines evidence on whether the economy is ‘rebalancing’ away from the key aspects of the pre-crisis growth model – as promised by the coalition government upon taking office. The paper argues that the resurgence of growth is, to some extent, illusory. Insofar as the economy is experiencing recovery, it is best characterised as a ‘pseduo-recovery’ in that it has been facilitated by a return to the pre-crisis growth model. Given that the flaws and contradictions of the pre-crisis growth model have not been addressed by the coalition government, the recovery is likely to prove unsustainable.
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Image: HM Treasury