Britons squeamish to spend their savings are jeopardising our economic recovery
The economic recovery is under threat. British consumers are saving and not spending. The Office for Budget Responsibility (OBR) estimates that during lockdown, households accumulated a massive £180bn of so-called “excess savings”. Earlier in the year, most economic forecasts assumed that these would be run down. Lockdown had constrained people’s normal behaviour and with the […]
It is science, not lockdowns, that will save the world
The various new vaccines announced over the past two weeks give real hope of a return to normal life. Of course, many practical questions remain. How will these vaccines be delivered? Do they stop the transmission or simply the symptoms of the virus? Exactly how effective will they be outside a controlled trial environment? But […]
To pay for this crisis, the government must keep in mind Ricardian equivalence
John Maynard Keynes could certainly craft a neat phrase. In the Second World War, he wrote in his pamphlet How to Pay for the War: “It is only in a free community that the task of government is complicated by the cause of social justice.” The impact of the coronavirus pandemic is similar to a […]
The economic impact of Brexit tariffs only tells us half the story
Brexit is about much more than the economic costs and benefits, but the idea that the former dramatically outweigh the latter has become the received wisdom in much of the media. Report after report emerges which purports to show that, under any of the various trade arrangements envisaged, the UK will be worse off as […]
Blame restrictions on the supply of land for new homes for rising wealth inequality
Official data released last week on London house price increases in 2016 generated a lot of interest. Given that housing represents by far the most important component of wealth for most people, it is not surprising that stories like this are read avidly. There is a feeling that the current situation regarding the affordability of […]
No wonder free trade is under threat: we’re just rediscovering its losers
It had been an article of faith among economists and policy-makers that free trade is a Good Thing. Trade liberalisation was a key feature of the world economic order enforced by the United States after the Second World War. For decades, the trend of removing trade barriers led to world trade growing around twice as rapidly as […]
History shows why robots won’t destroy our jobs
Economics is often described as the dismal science, but it often contains cheerful material. A paper by the leading American economic historian Joel Mokyr made for exuberant holiday reading. Written for the top Journal of Economic Perspectives, it is entirely in English and contains not a single mathematical symbol. Mokyr examines the history of anxieties […]
“Ricardo, Ricardo, that wonderful guy”: innovation, job losses and living standards
Here is your starter for ten. What do the Uber app and David Ricardo have in common? Ricardo, I hear you ask. Scarcely known outside academic economics, he ranks equal with Adam Smith and Keynes as the greatest ever British economist. His classic Principles of Political Economy was published in 1816. He made millions of pounds on […]
Why is economic growth stalling? May be it is Ricardian equivalence!
The British and American recoveries do seem to be stalling. The recovery profile is by no means as strong as is usually the case after recessions, even after pretty major financial crises like that of 2008/09. One of the insights of complex systems is that the impact of any particular factor may differ dramatically according […]
