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 […]

No more whingeing, please. The recovery is solid.

Last month saw some very positive economic news. The US Federal Reserve raised interest rates for the first time in over seven years.  The Bank of England reported on the major stress test of UK banks which it launched in March 2015.  It concluded that “the banking system is capitalised to support the real economy […]

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 […]

Corporate structure, Darwinism and Random Selection

The corporate world exhibits a wide variety of structures. Co-operatives and partnerships have been around for a long time and have some well known examples. The Co-op, for example, was founded in Rochdale as long ago as 1844 and now is represented worldwide. Goldman Sachs was a partnership for most of its existence. There are […]

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 […]

What a good job Keynes didn’t believe in forecasting

Keynes is in many people’s minds at the moment, as uncertainty about the course of the economic recovery is high. In May 1933, at roughly the same stage in the cycle as we are today, Keynes wrote in the Times: ‘Confidence has been restored and cheap money established both on long and on short term […]

cutting the deficit

The new Government’s plans to reduce the deficit much more sharply than most people expected. Will this stimulate or depress the economy? Not surprisingly there is a fierce debate about this. But it is a situation in which econometric evidence is not going to be of much use at all in arbitrating the dispute. So […]