Seminar organised by the Directorate-General for Economic and Financial Affairs of the European Commission
The Directorate-General for Economic and Financial Affairs (DG ECFIN) of the European Commission is organising a one-day seminar on the subject of the UK economy on 29 June 2010 in Brussels.
The aim of the seminar is to evaluate the UK economy's past and prospective economic performance: the economy's structural features and growth prospects, as well as to elucidate current fiscal and financial sector issues.
The UK economy enjoyed a period of strong and exceptionally stable economic growth coupled with low inflation in the ten year period leading up to the financial and economic crisis. However, the recession that began in early 2008 hit the UK hard and its recovery is apparently slow and hesitant. The question arises of what are the prospects for economic recovery and fiscal consolidation in the UK. Fiscal consolidation represents an important instance of rebalancing of domestic demand, necessitated by the unsustainable dynamics of the fiscal position. In the context of rebalancing, the household sector's relatively high debt levels accumulated during the previous decade will also shape the prospects for domestic demand growth, while the significant depreciation of sterling since mid-2007 raises the prospect of UK growth becoming more externally-led. Furthermore, future policy decisions relating to regulation and oversight of the financial sector will be made at both the UK and EU levels and such decisions may have an important impact on the functioning, profitability and growth of UK financial markets.
In addition to the above topics, which can be viewed as relating directly to UK growth prospects, the seminar will attempt to examine wider issues surrounding the UK's fiscal and monetary framework, such as the institutional and procedural design of fiscal policy, and the continuities and changes in the Bank of England's role after the crisis. Finally, the seminar will reflect on relative developments of the UK and other EU economies, and on what role economic policies play in this.
With a view to improving our understanding of these issues and derive policy implications in the context of the UK and its relation to other EU economies, the Commission invites the submission of contributions addressing the following questions:
In order to satisfactorily explain the UK's positive economic performance during the pre-crisis decade, structural growth determinants need to be separated from both domestic and global cyclical factors. The contributions should - from the perspective of labour or capital markets, or of productivity developments - shed light on the following questions. How important have factors such as investment and credit growth, financial deepening, labour market participation, productivity growth and globalisation been to the UK's economic growth performance? What are the microeconomic lessons in relation to factor markets that can be drawn from the UK's sharp crisis experience? Will the microeconomic foundations of the last phase of strong growth remain appropriate to underpin the next one, or is major change required? What should be the supply-side response to ensure sustained growth and a sustainable external position?
The UK government's monetary and financial policy response to the financial crisis consisted principally of capital injections into a number of UK banks, of deposit and capital guarantee schemes, asset insurance programmes, extended liquidity provision and a programme of interest rate reductions and asset purchases by the Bank of England. Have such policies been successful, and in what sense? What will be the final cost to taxpayers of the government financial sector interventions? How long should these measures continue to operate, and what form should their reversal take? Concerning exit strategies, the contributions could focus on what is the right macro policy mix to foster recovery and how should monetary and fiscal exit be sequenced? What consideration should be given to the interactions between the unwinding of quantitative easing on the one hand and gilt yields (impacting on government debt dynamics) on the other? How will credit growth and domestic demand be affected? What is the outlook for domestic monetary and credit conditions in the long term? How has the precise mandate/target given to the Bank of England shaped UK monetary policy and how has this affected developments in the last few years??
In view of the UK's critically high budget deficit and against the background of an increasing focus by public authorities, markets and international organisations on long-term sustainability of public finances, concrete plans to restructure public expenditure and increase revenues are of central importance for the UK. What lessons can be drawn from the UK's fiscal performance since the late 1990s, a period that spanned both considerable fiscal consolidation as well as pro-cyclical loosening of fiscal policy?
Taking into account the policy mix and the challenges to sustainability, as well as the EU recommendations, how rapidly should the UK proceed with its consolidation strategy? What should be the balance between tax rises and expenditure cuts in the eventual fiscal consolidation? How can tax rises and spending cuts best be targeted in order to minimise their negative impact? What reforms in spending should be pursued? What will be the economic and social costs of consolidation? What developments could lead to an unsustainable increase in interest rates on UK government debt?
Given the UK government's current suspension of the previous fiscal framework, how should a new fiscal framework for the UK look? Is the balance of responsibilities within the current framework be reworked, and, if so, what form should this take? How could consistency of such a framework with the Stability and Growth Pact be ensured? Within such framework, how to tackle risks from existing off-balance sheet and contingent liabilities, and how to reduce them in future? How to focus on and improve the long-term sustainability of public finances?
The seminar scheduled for 29 June 2010 will include approximately 6 papers to be presented by the respective authors, followed by the comments of discussants and a general exchange of views among the participants.
The final papers should be original work created in response to this call for papers and be roughly 15,000-20,000 words in length.
Selected authors will be required to send electronically a full draft of their paper to DG ECFIN by 14 June 2010 and to present it to the seminar. The final version of the paper should be submitted electronically by 1 September 2010
In accordance with the conditions of the purchase order , the Commission intends to pay a fee of € 3,000 per paper. The Commission will arrange and pay for travel, accommodation and a daily allowance for one speaker per paper to present it at the seminar in Brussels, irrespective of whether the paper is authored or co-authored. The travel and accommodation arrangements will be made via a travel agency, acting on behalf of the Commission.
We invite the submission of abstracts or annotated outlines (one to two pages) of preliminary papers covering any one of the three issues described above. Papers can be co-authored ( proxy form co-author ).
Draft outlines together with a curriculum vitae (including all co-authors) and signed proxy forms should be submitted electronically to the e-mail address firstname.lastname@example.org, clearly mentioning in the subject line of the e-mail the topic of the paper. This mailbox is reserved solely for submissions. Submissions sent to other mailboxes or to Commission staff cannot be accepted. No other communication should be addressed to this mailbox.
Deadline for submission: 7 March 2010 (20:00 CET)
The evaluation of the papers will be based on the following criteria:
The submissions will be evaluated and ranked. The procedure is expected to be completed by mid-March. Candidates will be informed of acceptance or non-acceptance by the end of March at the latest.
Conditional on the quality of the papers, they could be published in a volume collecting the workshop proceedings. The Commission will retain the copyright.