From an economic point of view, the period since the recession that began in 2008 has been quite unlike any other period since at least the Second World War, including the periods after the recessions of the early 1980s and early 1990s. Indeed, the slowdown has lasted for longer, and its effects on the public finances, on household incomes and on productivity have been more marked even than was the case in the 1930s. This time really does seem to be different.
That inevitably creates uncertainty for businesses, for households and for policymakers. The macroeconomy is failing to bounce back as expected by government, by the Office for Budget Responsibility (OBR) and by most independent forecasters. In addition, wages, employment, productivity, inequality, consumption and many other microeconomic indicators are moving in unexpected directions. The implications for how we think about policy are profound.
The papers in this Special Issue of Fiscal Studies make some pointed comparisons with previous recessionary periods and show how household incomes and expenditure have changed, how older households in particular have been affected and how productivity has been hit. A related paper looks at the pattern of wage and employment changes.