Employment is rising because labour is cheap
The latest employment figures confirm the buoyancy of the UK labour market. In the quarter April-June of this year, employment rose by 167,000 on the previous quarter, to an all-time high of 30.60 million. Unemployment also fell, by no less than 132,000. Taking a somewhat longer perspective, the low point for employment was reached in […]
The predictability of the Premier League
The Premier League kicks off again this weekend. Given the abysmal showing of our boys in the World Cup, a falling off of interest might be expected. But increasingly, the competition attracts many of the best players from all over the world. A self-reinforcing process has been set up on a global scale. The more […]
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 […]
Open Data: Britain leads the world
The UK economy is doing well. Even so, it is not often that we are placed unequivocally at the top of a world ranking of any kind. But a team of economists led by Nicholas Gruen of Lateral Economics in Melbourne has done just that. In their recent report on the economic potential created by […]
More ideas like HS3 are needed to solve our regional problems
In London and much of the South East, the recovery has been well under way for a considerable time. House prices boom and restaurants are packed. The economic data for the UK as a whole looks just as encouraging, with employment being at its highest ever level. Yet there are persistent complaints that the recovery […]
Psychology, not hard line maths, tells us why Osborne’s strategy is working
So, International Monetary Fund, wrong again! At the end of last week, the IMF abandoned its criticism of the UK government’s economic strategy. Christine Lagarde, the IMF chief, said her organisation had ‘underestimated’ the strength of the recovery in Britain. The IMF now believes that the UK will be the fastest growing of any major […]
Exciting times at the Office for National Statistics: the value of drugs and prostitution
The Office for National Statistics (ONS) has just increased the size of the British economy by nearly £10 billion, a figure equivalent to around 0.7 per cent of the economy as a whole. George Osborne has not waved a magic wand. We have not suddenly become more productive. The reason is that, for the first […]
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 […]
Forget the hype. Capitalism has made the world a more equal place
Metropolitan liberals love to be able to criticise Western society. Recently, their lives have been brightened by the extensive discussion on the rise in inequality since the 1970s, especially in the Anglo-Saxon economies. There is a danger that this essentially anti-capitalist narrative will come to dominate the media, paving the way for increased regulation and […]
A Different View of World Trade: Why National Accounts Can Be Exciting
Imagine that, for some reason, you were forced to choose between having to read a long, turgid novel like Westward Ho or Middlemarch, or a book on the methodology of the national economic accounts. Most people, however reluctantly, would plump for the former. But the latter can at times be very exciting. A recent paper uses national accounts […]
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 […]
Ukraine and Russia: why they’ve proved Friedman’s ‘MacDonalds’ doctrine wrong
On 31 January 1990, a great event took place in Pushkin Square, Moscow. A branch of MacDonald’s was opened. The same excitement was generated in Kiev on 24 May 1997, when the MacDonald’s franchise was extended to the Ukraine. The American author Thomas Friedman wrote in 1999 that no two countries with such a franchise […]
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 […]
German revival exposes deep fissure within Europe’s economies
In the 1990s and early 2000s, Germany was seen by many as the new ‘Sick Man of Europe’. Between 1991 and 2005, GDP growth averaged only 1.2 per cent a year, compared to 3.3 per cent in the UK. Since then, the German economy has revived dramatically. The recovery in the German cluster of economies […]
The so-called ‘output gap’: another piece of economic mumbo-jumbo
The concept of the’ output gap’ is central to mainstream macroeconomics. It is not merely of academic interest. The Office for Budget Responsibility (OBR) has a specific requirement to estimate the output gap, which it defines formally as “the difference between the current level of activity in the economy and the potential level it could […]
