Expansionary fiscal contraction

To many people, this phrase is an oxymoron. How can fiscal contraction be expansionary? But the evidence suggests that this is exactly what has been happening in the United States. In terms of national output, GDP, the trough of the trough of the recession was reached in the second quarter of 2009 (2009Q2). We have […]

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 […]

Recovery is not always smooth

There has been huge media attention about the 2011 Q2 UK GDP growth figures released today. The estimate of 0.2 per cent shows only very weak growth. It is bound to be revised either up or down as more information comes to light. But at the moment, recovery looks very weak, after more rapid growth […]

The economic recession: where are we now, and how bad has it been?

The world economy as a whole is roaring away. The 5 per cent real GDP growth on 2010 is almost the highest annual growth rate seen over the past 20 years. And even in 2009, world output fell by only 0.5 per cent. The problems have been almost exclusively in the developed world. Looking at […]

one swallow…

Of course one swallow doesn’t make a summer, but the second quarter 2010 UK GDP figures released today show output growing at an annual rate of over 4 per cent, much higher than the consensus. I wrote a piece for the Financial Times last summer arguing that ‘The historical evidence reveals a typical pattern of […]

was there a double dip in the 1930s?

There is a lot of comment at the moment about the risks of a ‘double-dip’ recession, citing evidence from America in the 1930s. Well, here is the annual growth rate of real GDP in the United States in the 1930s: 1930 -8.9 1931 -7.7 1932 -13.2 1933 -2.11 1934 +7.6 1935 +7.7 1936 +14.2 1937 […]