Tag Archives: economic policy

Opinion: Half an hour that changed the future

Yesterday, the Federal Open Market Committee (FOMC) announced it would reduce or ‘taper’ its level of QE acquisitions from $85 billion a month to $75 billion. In the physical world it was not a touch on the break so much as a slight easing of pressure on the accelerator.

Back in September the FOMC had announced it thought the time for ‘tapering’ was at hand. Long term interest rates (a window on future expectation for growth and inflation) veered up and down as markets tried to gauge the warring claims of the liquidity, income and expectation effects. No clarity: US stock …

Posted in Op-eds | 23 Comments

Opinion: Political deference to today’s orthodoxy is the UK’s economic problem

All three main political parties in the UK today broadly accept the Bank of England’s (BoE’s) programme of buying the paper ‘assets’ of banks with printed money – worthless and valuable alike (quantitative easing – QE). There are few dissenters, but I am one of them.

My dissenting post-2008 remedy was a managed partial default/bankruptcy of the UK’s insolvent banks with a quick operational reboot, on the grounds that it would be cheaper than a printed-money ‘bankers subsidy’. The quantity of intricately interwoven bad assets was unknown, and thus the UK government was subsidising a pig-in-a-poke, I believed.

But hey ho we …

Posted in Op-eds | Also tagged | 26 Comments

The Autumn Statement and the unreal economic debate in which everyone pretends the Coalition stuck to ‘Plan A’

It’s autumn statement day. George Osborne will stand at the despatch box of the House of Commons this afternoon and present his pre-budget report. The Guardian’s Martin Kettle sums up what it’s all about:

For the Conservatives, today is about redefining themselves – in the face of a run of seriously disappointing polls – as the party that feels the voters’ pain over energy prices, house price inflation, wind farms or payday loans – while still, boosted by yesterday’s strong economic surveys and the possible return of the UK’s AAA rating, managing a recovering economy more soundly than Labour. For

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What Japan did while we were sleeping

"2 x inflation in 2 years, 2 x monetary base, 2 x amount bonds purchased" “2 x inflation in 2 years, 2 x monetary base, 2 x amount bonds purchased”The overnight news yesterday from the Bank of Japan spelt out its serious intent to double the monetary base – the type of monetary easing, a l’outrance, that I have been arguing for at LDV, and elsewhere, for a number of years now.

The announcement followed the declaration back in November by the then leader of Japan’s opposition that when elected he …

Posted in News | Also tagged and | 38 Comments

No braking at Gambon – a monetary policy guide for petrolheads

If you had to choose a person from the following list, and only this list, to be Chancellor of the Exchequer, would you choose James May, Jeremy Clarkson or Richard Hammond? Tough choice, but go on: indulge me!

The last time I wrote here, I predicted that the Quad had reached a turning point on monetary policy. I did this not on the evidence of Vince Cable’s New Statesman article, but on a report in the Financial Times that Osborne was set to change the regime imposed on the Bank of England.

Well, …

Posted in Op-eds | Also tagged and | 10 Comments

Opinion: the UK has many economic lessons to learn from Ireland

When various commentators and critics of the coalition’s economic policy cast around for alternative solutions, not many look to Ireland for a model to follow, but perhaps they should.

My native country’s economy is in the sort of doldrums which make the current UK growth and employment rate look utopian, but the economy formerly known as the ‘Celtic Tiger’ is healing itself and there are many lessons for UK policy makers to learn. This year growth is forecast to be 1.8%, double what the UK can expect to achieve, while the country was recently able to return to the bond markets …

Posted in Op-eds | Also tagged | 12 Comments

Opinion: Are we valuing the right kind of growth?

Our economic system is built around the indicator of Gross Domestic Product (GDP). It measures how much we have produced as a country over a period of time. It does this by adding together the market value of what we have produced. As a result, an increase in the market value of what we have produced signifies that our economy is growing. But should it?

In the grand scheme of human history, GDP is relatively new. It was created to allow the US to better understand how to develop

Posted in Op-eds | 15 Comments

Opinion: The Conflicts of Economic Policy

Nick Clegg’s conference speech committed Lib Dems to manage debt out of the economy and implement a fair tax regime. But the objectives of economic policy often conflict with each other.

Let’s take it that there are three objectives for current economic policy:

  1. to reduce deficit and the debt it accumulates
  2. to inject demand into the economy
  3. to have a fair tax system

In the following table, I’ve had a try at evaluating recent and proposed economic policies against these objectives.

Posted in Op-eds | Also tagged and | 53 Comments



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    The point is, no country has ever joined the EU having previously been part of another member state, So that assertion of Alexander's is meaningless....
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    Oh dear Danny! I thought you had begun to switch to a more positive mode. Statements like this read as an act of political hari...
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    I am told that pegging one currency to another, while avoiding a black market situation, requires a central bank to buy and sell foreign currency...
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