Should the UK follow IMF’s advice?

Here are two technical terms, before we get underway: fiscal multiplier and blinkered. A fiscal multiplier simply describes the relationship between government spending and GDP. Blinkered, which was a theory developed by Professor Obvious from the school of common sense, may apply George Osborne.

Here is some simple maths....Read More

Hard-up US consumers show free markets fundamentals are wrong

It is one of those Victor Meldrew theories. In other words, it is easy to say: “I don’t believe it.”

Economic theory, at least some of it, says government spending does not lead to more growth in an economy. The theory says that households spot that the government is...Read More

Posted May 09, 2013

Darling boy and girl of Austerian economics calls for stimulus, but not just any old stimulus

Ken Rogoff and Carman Reinhart – the two academics who wrote that rather controversial paper suggesting that when public debt to GDP rises over 90 per cent, growth falls sharply – have come out fighting. And you know what, their observations not only make a lot of sense, they are...Read More

Posted May 02, 2013

Baltics: growing because of or despite austerity

Last June BBC 2’s ‘Newsnight’ had a kind of Paul Krugman special. The Nobel Laureate and arch supporter of Keynesianism was on the show for almost its entire duration. And a big hullaballoo it created too.

But one particular piece of controversy, relating to the Baltics and how their...Read More

Posted May 02, 2013

UK government borrowing was less than expected last year, but...

Each month, UK government borrowing is either up, or down. It is difficult to draw any conclusions, because so many things have an impact on the data. But public borrowing figures released in April are different. They tell us the scale of government borrowing over the course of the previous...Read More

Posted Apr 24, 2013

Osborne’s septimana horribilis – or that was the week that he rather never was

You may recall that the Queen once used the Christmas message to say of the year she had just experienced that it was an annus horribilis. The chancellor has just had one of those horribilis periods, it is just that in his case it was a week. And I’m not...Read More

Posted Apr 22, 2013

Now the IMF weighs into austerity

It was told elsewhere how the single most important piece of academic research underpinning austerity has come under attack. See: Austerity economics in disarray. Now the IMF has put the boot into the Austerians.

At the press conference held by the IMF as it revealed its latest economic...Read More

Posted Apr 17, 2013

Public borrowing falling, but oh so slowly

In his latest budget speech George Osborne said “[some people] think by borrowing more, they can borrow less.” This was greeted with laughter. How could anyone think such a thing?

Well, maybe he is right, maybe he isn’t. But what is clear is that the borrowing is falling very, very slowly.

He...Read More

Posted Mar 21, 2013

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