The New Statesmen says the chancellor’s first Budget is going to come down to an intellectual dispute about the legacy of John Maynard Keynes:
In the standard textbook model that Reeves would have learned at Oxford and the London School of Economics in the late 1990s, business investment is a reward for governments that behave nicely. Investors want low tax rates, flexible markets and, above all, stability. Any hint of an increase in borrowing and they will spook, worrying that government debt will spiral out of control. In this kind of model, even austerity can be expansionary, as it demonstrates to the business community that the fiscal authorities are really committed, even at the expense of electoral pain.
