In what follows, I wish to say a little about why an improved understanding of the economy and economic policy matters, for the general public when making everyday decisions and for the Bank of England when making policy decisions. I want to say a word, too, about what the Bank is doing to support public engagement, public understanding and thus public policy, with a focus on engaging children in schools. The Twin Deficits Economists often talk, with some trepidation, about economies which face a “Twin Deficit” problem. For example, the UK currently faces both fiscal and current account deficits running to several percentage points  1  Hawking (1988). Kumar et al (2015) show that Google searches in the US for the word ‘puppies’ far exceed searches for macroeconomic variables, such as GDP, inflation and unemployment. 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  of GDP. In economist circles, such Twin Deficits are usually the prompt for a pursing of lips, a sucking of teeth and a sharp intake of breathe. Yet economics may be facing its own “Twin Deficit” problem. These twin deficits are not unique to, but are probably more acute in, economics. With the public at large, there is an understanding deficit and a trust deficit in economics. Because a lack of trust inhibits understanding, and because a lack of understanding contaminates trust, these Twin Deficits are inextricably entwined. Starting with the understanding deficit, the most compelling evidence comes from the public themselves.
People have more important things to do in their lives than think about interest rates and bank regulation, about price and financial stability. Or at least I hope they have. Indeed, central banks would be failing in their job if people were spending too much of their lives thinking or worrying about these issues. Nonetheless, the actions of central banks are important for most people at key decision points in their lives. At those points, a trusting and understanding relationship between the central bank and the public matters. It matters for people when making good decisions. It matters for the economy when following a good course. It matters for policymakers when setting good policy. That is why everyday economics, terrible title and all, matters to the Bank of England. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Annex  Figure 1 – Study of Mathematics  Per cent of total population at each age  1%  Undergraduate level  12%  A-level  75%  GCSE  100%  Pre-GCSE  Sources: HESA, Joint Council For Qualifications, ONS and Bank Calculations Notes: As mathematics is compulsory at younger ages, we assume that the percentage of students studying it pre-GCSE is 100%. Undergraduate level includes of the professional graduate certificate in education, foundation degrees, HND/DipHE and other undergraduate qualifications. This chart does not include Scottish qualifications.