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Investing for Prosperity: Skills, Infrastructure and Innovation

Published online by Cambridge University Press:  26 March 2020

Timothy Besley ,
Miguel Coelho  and
John Van Reenen
Timothy Besley
Affiliation:
London School of Economics
Miguel Coelho*
Affiliation:
Institute for Government
John Van Reenen
Affiliation:
Centre for Economic Performance and London School of Economics
*
E-mail: [email protected]
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Abstract

What policies and institutions are needed to sustain long-run growth in the UK? We describe an optimistic story of the UK economy over the past 30 years. From the late 1970s, the UK reversed a century of relative decline in terms of per capita GDP with our main counterparts in the US, France and Germany. A key factor behind this improvement was an array of policy changes including an expansion of higher education and greater competition in product and labour markets. However, major weaknesses with respect to long-run investment in human capital, infrastructure and innovation remain. These are hampered by problems of short-termism and policy risk. We propose a series of radical reforms to address these problems: such as more flexibility in schooling with a new focus on disadvantage; a new architecture for national infrastructure decisions and more competition in banking.

Keywords

UK economyinvestmentproductivitypolicy riskO20O52
Type
Research Articles
Information
National Institute Economic Review , Volume 224 , May 2013 , pp. R1 - R13
Copyright
Copyright © 2013 National Institute of Economic and Social Research

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Footnotes

This is a summary of the report of the LSE Growth Commission (2013). We would like to thank the other Commissioners and Secretariat from the LSE Growth Commission. Numerous people have given valuable evidence and comments on the report, especially Romesh Vaitilingham, Nigel Rogers, two anonymous referees and the editor. We are grateful to the Economic and Social Research Council and HEIF (Higher Education Innovation Fund) for financial support.

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