Why is inflation so low?

Zero inflation is trending. The consumer price index in the UK was at the same level in February as it was a year earlier. The reporting of this figure on the BBC website created some unintended amusement, however. The drop to zero, we were told, was “sharper than many analysts had expected”. And what was […]

Public sector pay and pensions are why the deficit stays high

Why can’t the UK government get its deficit down?   This question has been exercising commentators recently, in the light of the latest assessment from the Office for Budget Responsibility (OBR) that George Osborn will once again miss his target for the deficit in the 2014/15 financial year.   Of course, the size of the deficit has […]

Recessions are good for the nation’s health

Many readers at this time of the year will be looking forward to their summer break, perhaps contemplating with a certain amount of envy their colleagues who have already departed.  But is leisure good for you?  A bit of a no brainer one might think.  Indeed, until recently the consensus amongst applied economists was that […]

Two cheers for the global recovery, but doubts remain in the Euro zone

Worries are growing about some of the countries in the Euro zone slipping back into double dip recession. By convention, a recession is when national output (GDP) has fallen for two successive quarters. But this is far from being news. In a substantial number of economies, output is lower than it was not just two […]

New ideas are needed in economics, but not the tired old statist one

The annual Institute for New Economic Thinking (INET) conference was held in Toronto earlier this month. INET was created by George Soros in the autumn of 2009 in response to the economic crisis. Mainstream economics bears a heavy responsibility for creating the intellectual climate prior to the crash that the problems of boom and bust […]

Supply-side growth, not inflation, is the cure to the debt overhang problem

In the year to March 2014, consumer prices in Sweden fell by 0.4 per cent. This has prompted the central bank, the Riksbank, to abandon the normally cautious language used by such institutions. Over the same period, inflation was negative in a further seven European countries, such as Greece, Portugal and Spain. In eight other […]

The ‘Gentleman in Whitehall’ does not know best

The government is relaxed about people cashing in their pension schemes to buy a Lamborghini. But the left-leaning liberal commentariat is certainly not. Abuse has been heaped onto George Osborne’s Budget measure of removing the requirement for people to buy an annuity. The main thrust of the attacks is that individuals may act irresponsibly. They […]

Forward guidance needed for companies, not consumers

Most of the commentary on the UK’s economic recovery focuses on consumers. Are they taking on too much debt again to finance their spending? Is there a bubble in house prices, as people get excited about bricks and mortar again? Certainly, in terms of its sheer size, spending by consumers is by far the biggest […]

The recovery is well grounded – except in France

The coming year looks like it will be a good one. At the start of each of the past five years, the economic scales have been tilted down, and the challenge has been to look for factors which might have tipped them back up. This year, the balance is reversed. The onus lies with the […]

How Bad Has It Been? 2008-2013 in Historical Perspective

The end of a year is a good time to take stock. For the first time since 2007, prospects for the UK for the forthcoming year look unequivocally good. But looking back, just how bad have the last few years been across the developed world as a whole? And how do they compare with previous […]