Narrating the Economy

Abstract

AbstractThis chapter explores the politics of economic expertise, considering assumptions made about (in)stability, equilibrium, and crisis within capitalism, and the difficulties successive crises posed for those forecasting the British economy’s twenty-first-century trajectory. It drills down into the Office for Budget Responsibility’s understanding of the UK economy and the drivers shaping its evolution under conditions of pervasive uncertainty, homing in on the OBR’s construction of UK growth assessments. To make sense of the economy, the OBR uses the past as a guide to the future, its growth forecasting entailing particular constructions of economic reason, and understandings of capitalism. Charting how thinking about growth forecasting has evolved since the Global Financial Crisis, the chapter investigates crisis-defining and crisis legacy–defining economic ideas, and explores their impact on how the economy is narrated. It focuses on a series of OBR growth downgrades since 2010, and considers how the financial crisis caused forecasters to question the dominant assumptions underlying their long-standing economic models. Rethinking Britain’s economic growth trajectory involved the OBR in the politics of economic method, its altered view on the equilibrium rate of unemployment having implications for the politics of austerity, for example. The OBR’s evolving economic narrative, increasingly alert to secular stagnation dynamics, indicates the policy salience of the OBR’s social construction of fiscal rectitude. The chapter demonstrates the astonishing degree of intuition, judgement, and guesswork that informs growth forecasting, and the significant policy ramifications of evolving OBR thinking. This challenges the view of independent fiscal oversight as a purely technical undertaking.