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Thursday 23 April 2009
David Cameron may be licking his lips at the thought of a return to Conservative rule but, after yesterday's Budget bombshells, he'd be wise to heed some lessons from history. For the Tories, a poisoned chalice awaits.
Monday 20 April 2009
Monday 30 March 2009
How much will the financial crisis eventually cost? I'm not talking about the billions of pounds or the trillions of dollars being spent to rebuild the world's financial system. These numbers are now so big that, in thinking about them, I feel decidedly numb. Moreover, the asset purchase and insurance schemes launched by governments may not cost that much over the longer term: not all the assets being purchased or insured against will prove toxic and a recovery in economic activity would probably leave governments and taxpayers nursing only modest losses. Indeed, with any luck, they might even make money.
Monday 23 March 2009
It is bad enough explaining to people what quantitative easing is, let alone what it actually does. Part of the problem lies with the different approaches adopted by central banks on either side of the Atlantic. The Bank of England deliberately intends to increase the supply of money, whereas the Federal Reserve has, so far, made no such commitment. Both central banks are, though, supposedly engaged in quantitative easing.
Monday 09 March 2009
There is something wonderfully quirky about the way in which a major change in monetary arrangements is announced in the UK. Not for us a detailed paper outlining the new monetary process, the intermediate and ultimate measures of success, the longer-term implications and the possible exit strategies. Instead, we get an exchange of letters. Next time, perhaps we'll get a postcard: "Dear Chancellor ... having a wonderful time although weather cloudy ... have come across this thing called a printing press ... looks great, but must be used carefully ... love Merv xx."
Monday 02 March 2009
Friday 27 February 2009
"Ouch! In a new interview with 'USA Today', Stephen King was asked about his thoughts on the writing talents of J K Rowling and Stephenie Meyer (who created the Twilight Saga)... He said: 'The real difference is that Jo Rowling is a terrific writer and Stephenie Meyer can't write worth a darn. She's not very good ... it's very clear that she's writing to a whole generation of girls.' I have always respected Stephen King for his brutal honesty ... but there have been those books of his that are absolutely terrible."
Monday 16 February 2009
Chugger chugger chugger chugger"... yes, it's the sound of the printing press. With UK interest rates down to 1 per cent and US interest rates at zero, it's no longer possible to pretend that rate cuts alone will bring this economic crisis to an end. In the monetary sphere, something else needs to be done. Central bankers can no longer be content merely focusing on the price of money: in real, inflation-adjusted terms, they no longer have any influence. They also need to act on the quantity of money.
Monday 02 February 2009
As a symbol of the growing protectionist backlash, it’s hard to beat the protests in the UK last Friday. Repeating Gordon Brown’s pledge to create “British jobs for British workers,” the protesters demanded protection against foreign workers in the construction industry.
Monday 26 January 2009
On 24 October 1930, a report from the British government's Economic Advisory Council was circulated by Ramsay MacDonald, the Prime Minister, to his Cabinet. The Economic Advisory Council consisted of the great and the good of the economics profession, and was chaired by John Maynard Keynes. Its terms of reference were "to review the present economic condition of Great Britain, to examine the causes ... and to indicate the conditions of recovery."
Monday 08 December 2008
There are moments in any economic cycle when one's worst fears are confirmed. Friday's US employment release provided one of those occasions. Those who were hanging on to the belief that, somehow, there was a disconnect between Wall Street and Main Street will have to think again.
Monday 24 November 2008
Sunday 09 November 2008
Monday 20 October 2008
Whisper it quietly, but it's just possible that the Bank of England's inflation target contains a fatal flaw.
Monday 06 October 2008
What should you do if your banking system doesn't work? Some will doubtless celebrate, arguing that banks are the source of all monetary evil. Others will panic, worrying about the onset of another Great Depression. Policymakers, though, should do neither of these things. They need, instead, to find a way to make the financial system function again.
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