For the next few years, the priority in the UK is achieving output growth and the declines in unemployment that would accompany it. But understanding the UK's economic problems as a combination of short-term and longer-term risks makes it clear that a wider set of policies is needed.

After drawing out the two horns of the UK's economic dilemma - weak demand in the short term and the risk of reduced supply capacity and growth potential in the longer term - this paper outlines a range of interrelated policy changes, fiscal and industrial, to address these problems in the round.

It says that the roadmap for growth should have six crucial elements:

  1. an increase in the scale of quantitative easing
  2. fiscal measures to boost growth in the short term combined with a reaffirmation of the plan to eliminate the deficit in the medium term
  3. additional infrastructure spending
  4. measures to make household debt restructuring easier
  5. measures to keep the long-term unemployed in touch with the labour market
  6. an active industrial policy.