No abstract

Summary This paper quantifies the effect of political constraints, as measured by legislative control by the incumbent government, on the size of fiscal stimulus packages that have been put in place as a reaction to the Great Recession. On average, political constraints reduced the size of a country's fiscal stimulus package by between 1 and 2.7 percentage points of GDP. This finding is robust to a number of alternative dependent variables, control variables, and sample specifications and is in line with the widely held, but never tested, perception that political reality limits the de facto application of discretionary fiscal policy as reaction to economic shocks.

No abstract

No abstract

We show the recovery in consumer spending in the United Kingdom through the second half of 2020 is unevenly distributed across regions. We utilise Fable Data: a real-time source of consumption data that is a highly correlated, leading indicator of Bank of England and Office for National Statistics data. The UK's recovery is heavily weighted towards the "home counties" around outer London and the South. We observe a stark contrast between strong online spending growth while offline spending contracts. The strongest recovery in spending is seen in online spending in the "commuter belt" areas in outer London and the surrounding localities and also in areas of high second home ownership, where working from home (including working from second homes) has significantly displaced the location of spending. Year-on-year spending growth in November 2020 in localities facing the UK's new tighter "Tier 3" restrictions (mostly the midlands and northern areas) was 38.4% lower compared with areas facing the less restrictive "Tier 2" (mostly London and the South). These patterns had been further exacerbated during November 2020 when a second national lockdown was imposed. To prevent such COVID-19-driven regional inequalities from becoming persistent we propose governments introduce temporary, regionally-targeted interventions in 2021. The availability of real-time, regional data enables policymakers to efficiently decide when, where and how to implement such regional interventions and to be able to rapidly evaluate their effectiveness to consider whether to expand, modify or remove them.