It is a surprise to see such a Hawkish Chancellor of Exchequer after a decade of the Dovish regime in the world economic policy. Mr. Rishi Sunak is certainly brave while being a little bit reckless. It is certainly brave to reveal such a tough Hawkish characteristic . He puts emphasis on his prudent attitude toward balancing the budget. Even under the still anticipated downturn with a still remaining strong anxiety, he is willing to increase the overall taxation (generally slowing down economy) to balance the budget. He claimed that, failure of balancing the budget eventually results in the rise of both the price inflation and the interest rate for bonds and mortgages is certainly alarming for economy.
Regarding the usage of the term Hawk and Dove, it does not refer to diplomatic and military policies. This term is uniquely used in macroeconomic policies related to neither diplomacy nor military. In terms of macroeconomics, Hawk is tough and prudent whilst Dove is tolerant and loose. It sounds similar to diplomatic and military policies but the implemented channels and the targets for setting these policies are different and unique in economics. Both have advantages and disadvantages.
Hawks are intolerant towards the enemies of the macroeconomic environmental stability such as the high price inflation (devaluing the income value and disturbs financial planning) and the rumour of distrust from investors and foreign exporters&importers. They put emphasis on eliminating the root causes of the instability by tightening controls over balanced budgets and setting the central interest rate relatively high enough (plotting to consequently lower the high interest rate and stabilise the real income value).
Doves are on the other hand tolerant for using loose policies to save individuals and their economic environment from the hardships (such as unemployment and lack of rescuing resources) even with some expected negative side effects. They frequently claim for need of the looseness because the overall benefit covers the cost incurred by the negative side effect, and it should take place temporarily at least.
Both are equally good as well as bad because both have disadvantages indeed. Hawks are remarkably unpopular during the unexpected economic downturn because Hawkish austerity is possible to be tough also on majority individuals suffering from the downturn, and then is likely to delay the recovery from the downturn. Doves are blamed for their speculative projections often underestimating the cost of their policies so it is likely to misjudge of the timing of both imposing and cancelling their loose policies, and then their tolerance contains the high contingent risk of losing the administrative capability.
Focusing on what Mr. Rishi Sunak is attempts to put into practice, he manages his policies by handing the fiscal policy-channels such as increasing tax rates to increase the inland revenue to reduce the national debt and various bond interest rates. He promises to consequently protect British citizens' income from either the high mortgage interest rate, the high price inflation, and lack of foreign investments with this policy implementation.
The fiscal policy-channels are able to tune the different tax rate for various targeted segments of economic. Nonetheless, the fiscal policy always contains the mis-selection of the target sectors to increase the tax rate causing the systemic risk collapsing economy caused by penalising the certain sector's performance interrelated to many of the others. This Sunakian fiscal policy is expected to effectively handled to hopefully induce the positive aftermath.
Mr. Sunak's policy is neither misguided nor irrational. There are many worthy qualities accountable for encouraging the sustainable robust British economy. Especially, this seems to function for keeping the value of Great British Pound Sterling and secure the trust in the capital market and the foreign trades. Furthermore, his policy takes account of ordinary majority British citizens for securing their future real income value. At the same time, the biggest concern is to determine whether or not this is the right moment to be tough as Hawk meanwhile the popularity of the looseness is still enthusiastically supported by the mass.
Having analysed these aforementioned aspects, Mr. Rishi
Sunak's Hawkishness is neither absolutely good nor absolutely bad; but
it is yet controversial. Only the future might be able to provide the convincing appropriate judgement over his policy-aftermath.
