Archive for the Economic theory Category

For richer or for poorer? The economic case for marriage is worth remembering

For richer or for poorer? The economic case for marriage is worth remembering

An important piece of social news emerged last week. According to the Office for National Statistics, the divorce rate in 2018 fell to its lowest level for nearly 50 years. The overall trend is clear and well-established. The divorce rate rose steadily from the late 1950s, with

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Labour’s rejection of conventional economic theory ignores important insights

Labour's rejection of conventional economic theory ignores important insights

One of the first tasks facing whoever becomes chancellor after the General Election will be choosing the next governor of the Bank of England. Getting to make this choice would be a key step in the plans of Labour’s shadow chancellor John McDonnell to shake up the

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What kind of person crosses the Nevada desert to investigate UFO conspiracies?

What kind of person crosses the Nevada desert to investigate UFO conspiracies?

Area 51 is a mysterious place. Located deep in the Nevada desert, it is home to highly classified US military operations. Rumours abound that it harbours secrets about extraterrestrial life. In June, a podcaster released an interview with someone who claims to have studied flying saucers in

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Modern Monetary Theory? More like Magic Money Tree

Modern Monetary Theory? More like Magic Money Tree

As the Brexit process unfolds, the possibility of a Corbyn government has become much more tangible. Last month, John McDonnell, the shadow chancellor, wrote to the Treasury to say that in power he would require them to “widen the range of economic theories and approaches in which

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From Northern Rock to lunch tables, no one is immune from the herd mentality

From Northern Rock to lunch tables, no one is immune from the herd mentality

The Bank of England and Federal Reserve held a two-day conference last week in London on big data and machine learning. All very interesting stuff. There was an intriguing vignette as we emerged from the conference room for the frugal lunch on the first day. Straight ahead

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At long last, economists appreciate that private debt was the catalyst for the crisis

At long last, economists appreciate that private debt was the catalyst for the crisis

This month saw the tenth anniversary of the collapse of Lehman Brothers, a collapse which precipitated one of the only two global financial crises of the past 150 years. The late 2000s and early 1930s were the only periods in time when capitalism itself has trembled on

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Never mind who wins, the World Cup is a treasure trove for curious economists

Never mind who wins, the World Cup is a treasure trove for curious economists

Our boys make progress – and I don’t mean on Brexit. On a visit to Glasgow last Thursday, a popular Scottish newspaper had a mock-up photo of Harry Kane lifting the cup. In massive type, the headline shrieked “This Would Be the End of the World”. Yes,

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There are economic lessons to learn from TfL’s hated bus announcement experiment

There are economic lessons to learn from TfL’s hated bus announcement experiment

The Transport for London (TfL) bus experiment has proved to be overwhelmingly unpopular. Supposedly at every bus stop (but more usually once the bus has pulled away) a disembodied voice informs the passengers that the bus is about to move. The hated announcement is being run as

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Mind the gap: Economics is catching up to the fact that we’re not always rational

Mind the gap: Economics is catching up to the fact that we’re not always rational

Do Tube strikes make Londoners better off? At first sight, the question is simply absurd. The answer is surely “no”. But a paper in the Quarterly Journal of Economics comes to the opposite conclusion. Cambridge economist Shaun Larcom and his colleagues analysed the two-day strike of February

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Embarrassing academic reversals show expert opinions are often built on sand

Embarrassing academic reversals show expert opinions are often built on sand

Last week we saw yet another major reversal of opinion by experts. For years we have all been lectured severely on the need to finish every single course of prescription drugs. But the latest wisdom is that this is not necessary. The announcement that petrol and diesel

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