Relax, the UK (probably) isn’t heading for recession
Immediate fears of a recession in the UK economy were eased last week with the latest Office for National Statistics (ONS) estimate of monthly GDP. The economy had shrunk in April, but growth resumed in May. This has not prevented widespread conjecture that a recession is imminent. The Resolution Foundation claimed last weekend that the […]
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 […]
Our economic recovery is real, but what we can still learn from the US?
Some people are never satisfied. The evidence is mounting that the UK economy is now on the path to recovery. But to those who denied the possibility of any economic revival at all under the policies of “austerity”, this is simply not good enough. It is the wrong kind of recovery, they say. Fuelled by […]
Why Can’t Debt Just be Inflated Away?
The debt problems which the UK and Europe currently face are essentially ones of political economy. Basically, there is a lot of debt around and the simple question is: who is going to pay for it? All the economic theory in the world does not get around this fundamental issue. Traditionally, bondholders paid. The real […]
Minsky Mania: a Raincheck
The American economist Hyman Minsky is currently very fashionable, especially amongst those who are sympathetic to the idea of more government intervention in the economy. Minsky argued that financial crises were an inevitable feature of capitalism, unless governments stepped in through regulation and central bank action. He hypothesised that in prosperous times, when the corporate […]
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 […]