Without some institutional encouragement, the BoE are going to feel caught between a rock and a hard place in identifying missing macroeconomic stimulus.
The rock is that if they don't do it, it will later reasonably be asked why macro outcomes were not better, why, for example, they undershot their inflation target.
The hard place is that, especially fresh after a government stimulus, the BoE would be explaining that the govt had got its sums wrong, or was not doing its job properly.
The govt should be - seems to be - concerned about fiscal space, and ought to be concerned about not appearing to subvert monetary policy to fiscal policy. So it should welcome institutional cover to get advice on the missing stimulus
And unlike the BoE it is not a centre of excellence for macro modelling any more. So it should be looking for an excuse to milk the BoE's currently functionally idle capacity in this way. [If this is not already going on in private].
You can follow @t0nyyates.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: