The G-20 has come full circle. In April 2009 in London the talk was of a massive coordinated fiscal stimulus. While this was considerably exaggerated - much of the "trillion dollar package" has already been announced - there was a genuine collective determination to do what was necessary to ensure the financial crisis did not become a prolonged depression.
- as Tim Leunig and Tim Besley have proposed, the government could kick-start housebuilding by guaranteeing bonds issued by housing associations, secured on the income stream from new houses, and coupled with an innovative approach to ensuring a supply of appropriate land with planning permission. With housebuilding, especially of affordable homes, at historic lows, while the UK still suffers from a structural shortage of housing supply, this would both boost demand in the short term and benefit the economy over the medium to longer term.
- as the ACEVO Commission on Youth Unemployment, of which I was a member, argued, the long-term economic and social damage that will result from current levels of youth unemployment is immense. The government could enable private and voluntary sector providers to invest now in reducing youth unemployment, by promising a substantial future payment stream in return for demonstrated success. This could in turn enable providers to issue social impact bonds secured on those future payments.
- the market for loans to small and medium enterprises is dsyfunctional; this both reduces business investment and hence output and employment in the short term, and holds back productivity in the longer term. As Adam Posen at the Bank of England has suggested, the government could unblock the market and increase financing to the SME sector by creating a securitisation vehicle for SME loans. Such securities could then be purchased the Bank of England as part of its quantitative easing programme, again underwritten ultimately by the Treasury.