Brexit was the final straw: it’s time to scrap the IMF
Sports fans will all be familiar with the commentator who almost always gets things wrong. “Arsenal are very much on top here” he – it is invariably a “he” – will pronounce, or “Root is looking very settled”, only for the opposition to score a goal immediately and for the Yorkshireman to be clean bowled. […]
The coming explosion in natural debt is a serious risk to the economy
Martin Feldstein of Harvard is an economist who should always be taken seriously. Writing in 1997 about the forthcoming introduction of the euro, for example, he argued that “the adverse economic effects of a single currency on unemployment would outweigh any potential gains from trade flows”. He went on to predict that the euro was […]
The IMF is in trouble – and not just due to its poor forecasts
The International Monetary Fund (IMF) has played a prominent role in world financial affairs in the post-Second World War period. In the 1950s and 1960s, its main purpose was to support the system of fixed exchange rates. Since then its activities have evolved to embrace developing economies and both banking and sovereign debt crises. The […]
China is drowning in private sector debt: there’s no telling how this one will end
The eyes of the financial and economics worlds are now fixed on China, with focus predominantly on Chinese stock markets and the country’s GDP figures. A fascinating perspective was provided last week in the leafy borough of Kingston upon Thames. The university has recruited the Australian Steve Keen as head of its economics department, and it […]
It is not just the Euro. Southern Europe faces a major structural crisis
Major shocks to social and economic systems ruthlessly expose weaknesses which can be contained in more normal times. When the price of oil quadrupled in 1973/74, the different levels of resilience in the labour markets of Western Europe were quickly revealed. Inflation initially rose sharply everywhere. By 1976, it had fallen to 4 per cent […]
CEO compensation and Jamaican demands for reparations: two sides of the same coin
David Cameron’s visit to Jamaica last week led to vociferous demands for the UK to pay the Caribbean island billions of pounds in reparations for slavery. Most people here reacted with predictable eye-rolls and sighs. Slavery was abolished throughout the British Empire in 1833, nearly two centuries ago. Jamaica has been independent since 1962, over […]
Keynesians are wrong: Cutting public spending can boost economic growth
The key aim of George Osborne’s economic policy has been to eliminate the financial deficit of the public sector. The main way of trying to achieve has been to squeeze public spending. The orthodox economic textbooks maintain that this withdraws demand from the economy, and so leads to the growth rate being slower than it […]
Guaranteed bank deposits and the market for lemons
One aspect of the Greek crisis which will affect many readers is the reduction in the amount of cash in a bank deposit which is protected. The Bank of England announced that the current guaranteed amount of £85,000 will be cut to £75,000 on 1 January. This has led to predictable outrage, with Andrew Tyrie […]
Bribing the electorate: new rules of the game thanks to zero inflation
The temptation to believe in the concept of a free lunch is one which has proved irresistible to numerous governments through the ages. Henry VIII, for example, has seized popular imagination once again through the brilliant portrayal of him by Damian Lewis in Wolf Hall. Bluff King Hal is the nickname often associated with the […]
Capitalism is stable and resilient
The financial crisis did succeed in creating one dynamic new industry. Since the late 2000s, there has been a massive upsurge in op-ed pieces, books and even artistic performances offering a critique of capitalism. A founder member of the Monty Python team, Terry Jones, is the latest to get in on the act with his […]
