Recession, Recovery and the State: Does a shrinking economy mean the state should grow?

Recession or Recovery: What Policies are Best for Business?

Politeia's 2012 economic series continued on 16th April, with Professor Vito Tanzi presenting Recession, Recovery and the State: Does a shrinking economy mean the state should grow?

Professor Tanzi’s lecture considered the role of the state in the current economic conditions, where many countries contend with high unemployment and low growth. The lecture  revisited the policies of expansion proposed by some econmists and asked whether enthusiasm for Keynesian-style fiscal policy is justified by examining the key issues:

• How far are such policies likely to be effective or dangerous

• To what extent has Keynesian thinking contributed to the crisis?

The lecture considered the best course for governments given the circumstances of today's rapidly changing global economy, and examined their role in managing and promoting market efficiency.

Vito Tanzi’s recent book, Government versus Markets, the Changing
Economic Role of the State (Cambridge 2011) was published last year. He has served as Director of Fiscal Affairs at the IMF and as Undersecretary for Economy and Finance in the Italian government.

• Competing in a wider and uncertain world: How can business compete in the current international climate of fiscal and financial uncertainty? How can it counter the implications of instability or downward growth in the Eurozone and the US?
   
• Cutting the burden and cost of regulation: What priority should be given to curbing regulatory, fiscal and employment costs in the UK and EU if business is to compete with lower cost or protected economies?
   
• Access to Finance: What further steps are needed to enable businesses to borrow for or invest in their business and growth?
   
• Small, Medium and Big Business and the Public Sector: What are the lessons for growth?