Richard McManus

Expansionary contractions and fiscal free lunches: too good to be true?

This paper builds a framework to jointly examine the possibility of both ‘expansionary fiscal contractions’ (austerity increasing output) and ‘fiscal free lunches’ (expansions reducing government debt), arguments supported by the austerity and stimulus camps, respectively, in recent debates. We propose a new metric quantifying the budgetary implications of fiscal action, a key aspect of fiscal policy particularly at the monetary zero lower bound. We find that austerity needs to be highly persistent and credible to be expansionary, and stimulus temporary, responsive and well-targeted in order to lower debt. We conclude that neitherare likely, especially during periods of economic distress.

UK pension sustainability and fund manager governance: agent duties to the principal

Sustainable investing includes the application of non-financial (Environmental, Social and Governance (ESG)) criteria to asset selection in institutional investor portfolios [Capelle-Blancard, G., and S. Monjon. 2011. “Trends in the Literature on Socially Responsible Investment: Looking for the Keys Under the Lamppost.” Business Ethics: A European Review 21(3): 239–250]. The article explores the implications for applying ESG screening to the institutional investors making the asset selections. Institutional investors are a heterogeneous group of investors, with fund managers specifically being some of the largest listed organisations globally [Ingley, C. B., and N. T. van der Walt. 2004. “Corporate Governance, Institutional Investors and Conflicts of Interest.” Corporate Governance 12(4): 534–553]. Whether their own corporate management duties to fiduciary governance (the G in ESG) benefiting their shareholders has any material impact on the financial returns outcomes of the pension asset management contract, and specifically whether there is a fiduciary conflict favouring of the exclusive best interest of fund management shareholders is the question addressed by the paper.

Fiscal trade-offs: the relationship between output and debt in policy interventions

Implicit in fiscal policy debates is that there is a trade‐off between output and debt outcomes; stimulus is at the expense of debt, and austerity at the expense of output. This paper theoretically and empirically investigates this trade‐off through analysing the relationship between traditional output multipliers and ‘debt multipliers’ (the impact of policy on government debt). Theoretically the elasticity between the two is the marginal tax rate from movements of output in response to policy. This leads to two further hypotheses: first, if the marginal tax rate in the private sector is higher than that in the public sector, changes in government spending will result in a larger impact on debt than changes in taxes; and second, ‘fiscal free lunches’ are possible with recent estimates of the output multiplier. Indeed, empirically we find that tax revenues increase from exogenous tax cuts when the response of output is high.

A methodology to understand student choice of Higher Education Institutions: the case of the United Kingdom

ABSTRACT The need to understand how prospective students decide which higher education institution to attend is becoming of paramount importance as the policy context for higher education moves towards market-based systems in many countries. This paper provides a novel methodology by which student preferences between institutions can be assessed, using the United Kingdom as a case study. It applies both revealed preference and discrete choice modelling techniques to estimate the priority attributes and potential trade-offs of students choosing between different UK universities. Whereas the former methodology has the advantage of being based on actual decisions, the latter provides an experimental setting for more nuanced findings to be elicited; the combination of approaches allows for a rich and detailed set of results. This methodology can also be used to ask detailed strategic questions of higher education institutions and further applied to other international markets.