International Airlines Group: a ‘fantastic object’? The psychology of mergers and acquisitions
International Airlines Group (IAG), formed in January 2011 by a merger of British Airways and Iberia, is in the news. Operating losses at Iberia in the first nine months of the financial year are believed to be in excess of £200 million. Since the start of last year, IAG’s shares are down by nearly 40 […]
Our Friends in the North are trapped in a monetary union
Michael Heseltine’s report on economic growth came out last week. It contains 89 recommendations. A mere 57 varieties, to recall the famous Heinz slogan, might have connected it more with popular culture. The report has already attracted a lot of comment, mainly that Lord Heseltine seems nostalgic for things like the Regional Development Agencies and […]
If it can happen to Google, who can feel safe?
The dramatic crash in Google’s share price and the temporary suspension of trading in the company’s shares made headline news. The event was triggered by the 20 per cent year-on-year fall in profits in the third quarter of this year. As usual, there was no shortage of explanations of why this happened – after the […]
Don’t say IMF, it’s IMF Squared!
In the boom decade of the 2000s, corporate rebranding and renaming was all the rage. Some were successful. Others are best forgotten, like PWC’s proposal to bestow the name of Monday on its consulting arm. But as the world’s economic recovery gathers momentum, perhaps it is time to revive the practice. A prime candidate is […]
Policy makers have learned from the mistakes of the 1930s
Nobel Prize winner Paul Krugman will shortly be in town. With Lord Richard Layard, he will be calling for more public spending and borrowing. The two have issued a ‘Manifesto for Economic Sense’. But is it? The opening sentences make dramatic claims: ‘More than four years after the financial crisis began, the world’s major advanced […]
Macro-economic modelling and its uses
An International Macro Symposium conference this week hosted by the ESRC and the Oxford Martin School has brought home to me how little things have changed in some quarters. There is still a belief that with some tweaks the old modelling frameworks can capture the elements that were missing before the crisis, and a deeply […]
How Big Is My Multiplier?
The debate rages about whether the Chancellor should implement a Plan B, or C or D or even Z. There seems to be a plethora of alternatives. But many of them share a key common theme. Namely, that an increase in public spending will boost output in the economy overall. This was one of the revolutionary new […]
How to unpick the apparent paradox of falling GDP and rising unemployment
GDP estimates are eagerly awaited in the City, and dominate the media headlines. Huge significance is attached to arithmetically trivial differences, whether between market expectations and the announced figure, or to subsequent revisions to the data. But GDP is not something which can be put in a set of scales, say, and measured accurately. The […]
The Olympics, traffic in Central London and a bar in Santa Fe
We all know now about the empty roads and deserted shops, all quite contrary to the official announcements before the Games began. No doubt Transport for London used their massively complicated, expensive models of the transport network to deduce that the system would be under massive strain. But a deceptively simple game devised in the […]
Transparency, Clarity and Understanding
The call for more transparency is a compelling one. We should have more information, more easily available. Stuff should not be hidden away. I am generally a believer in all of this, and that people have greater ability to absorb and critique than they are given credit for. But there are risks and caveats which […]
