Archive for the Blog Category

Can Game Theory Help the Greeks?

Game theory is a big topic in academic economics. It is scarcely possible to graduate from a good university without exposure to its abstruse logic. So perhaps the Greek government, replete with economists, is using game theory to plan its tactics. Or is Chancellor Merkel herself being

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Birthday parties and the NHS: We Need More Markets

Many outrageous things happened around the world during the course of last week. But, judging by both the level of popular interest in the story and reaction to it, the most heinous was the decision of a mother to send an invoice to the parents of a

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Bring Back Cedric the Pig!

Executive bonuses are back in the news. The Goldman Sachs pot of £8.3 billion has been prominent. German executive pay has overtaken that in the UK for the first time. Top management seems to have no shame. Some bad publicity, but the fat cheque remains safely in

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Can Adam Smith Solve the Problem of Youth Unemployment in Europe?

Youth unemployment remains a serious problem in Europe. There is the tiniest glimmer of hope in that the number of young people under 25 unemployed in the Euro zone is 58,000 lower than it was a year ago. But that still leaves 3.4 million without a job.

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Prospect theory: will the Greeks keep a hold of Nurse?

Will 2015 be the year in which fantasy economics in Europe is finally put to the test? Somewhat to the surprise of many commentators, in December the Greek political class failed to elect a new president even after three attempts. Parliament has now been dissolved and an

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A Tale of Two Financial Crises: the 1930s and Now

As the seventh anniversary of the start of the economic crisis approaches, it is an appropriate moment to take stock. At the time, the recession was simply not recognised by conventional economic forecasts. These continued to foresee positive growth until the collapse of Lehman Brothers in the

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Bond market yields imply gloomy growth prospects

Very strange things have been happening in government bond markets. The yield on 10 year US bonds is currently around 2.25 per cent. It makes intuitive sense that the Germans, with their longstanding reputation for fiscal prudence, are enjoying a much lower rate, some 0.8 per cent.

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The Ferguson riots: economics and bias in the American justice system

The riots in Ferguson, Missouri continue to dominate headlines around the world. Even the brutal dictatorship of North Korea has got in on the act, accusing the United States of being a ‘human rights tundra’. The disturbances follow a grand jury decision not to indict a police

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Corporate tax is getting easier to avoid. Time to abolish it.

Corporate tax avoidance is once again prominent in the news. When Jean-Claude Juncker, the new European Commission president, was prime minister of Luxembourg, the country seems to have operated as a vast tax shelter. Leaked documents have revealed that special tax arrangements were agreed by his country

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Is Ed Miliband secretly a Rational Economic Person?

Recently, we have seen a very effective piece of forward guidance.  Ed Miliband’s statement that Labour would bring in a mansion tax on properties worth more than £2 million has had a dramatic impact.  The market for expensive properties in London has more or less ground to

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