12 days of Fabian Christmas: A New Golden Rule

During 2012 we launched our online format, with A New Golden Rule: Putting the corporate sector surplus at the heart of economic decision making being the very first Fabian online report.

In A New Golden Rule, Peter Kenway, Dan Corry and Steve Barwick explore how corporate sector surplus is key to economic strategy going forward and advocate that, in order to give the corporate sector surplus the status it requires, it should explicitly appear within a new golden rule, to capture the way that reductions in the public sector deficit depende upon reduction in the corporate sector surplus.

While many of the immediate – and deeper – causes of the financial crash of 2008 rested elsewhere, in the years leading up to it the UK’s economy was becoming unbalanced. The public sector deficit is one aspect of this imbalance. But it is not the only one. Much less discussed is another side of it, the corporate sector – Britain’s companies, large and small – behaving as long term savers, spending less than they earn.