Tax Cutters Celebrate New “Dynamic” OBR Modelling mdi-fullscreen

The OBR is on the defensive this morning after fresh attacks on their repeatedly inaccurate modelling. They are saying that they will be introducing more “dynamic” modelling into their forecasts for the Autumn Statement and beyond, so behavioural changes and incentives will be considered in response to fiscal policy. Its long-time inability to do so means it always concludes tax cuts are doomed to fail…

The Truss-era Growth Commission, along with other free market think tanks, has dynamic modelling as its keystone in pushing for tax cuts. At the launch of its alternative budget, co-chairman Doug McWilliams said “the jury’s out” on whether the OBR will actually fix its forecasting, though he was “impressed with the result“. He said without continued pressure on them to address their “failure properly to look at the impact of policy changes on behaviour, it would have been surprising if they’d made an announcement¬†today“.¬†Guido has certainly been making that case…

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