The Great Frost of Covid-19 will pass – and Britain’s economy will heat up
The Great Frost of 1709 has been in the news this week, quite possibly for the first time since 1709 itself. According to Bank of England estimates, this was the last time that GDP fell by more in a single year than it did in the Covid year we have just had. The Office for […]
Burnley and Asda are unlikely warnings of debt-driven troubles
It has been a week of mixed messages. Not just on the release from lockdown, but on the economy. The Bank of England indicated that banks have been given six months to prepare for negative interest rates. The Monetary Policy Committee was quick to clarify that this did not mean that they would necessarily cut […]
Beware those who’d lock us down and throw away the key
Rather like dedicated Remainers, pro-lockdown enthusiasts never seem to give up. Their ardour will have been fuelled by leaks over the weekend of results from the epidemiological models. Apparently, even though quite soon all the over-70s will have been jabbed, lifting restrictions before the summer would lead to a massive third wave of the virus. […]
Hurrah for a vaccine — but was lockdown actually worth it?
The development of the vaccines has changed many things. It has even influenced the opinion of the Prince of Lockdown himself, health secretary Matt Hancock. Life, he pronounced at the weekend, would be back to normal by the spring and the “blasted regulations” abolished. But one thing has remained constant: the government’s continued refusal to […]
Economics lessons from history: Don’t expect a post-Covid boom
Just over 200 years ago, the finances of the British government looked even more parlous than they do today. Since the mid-1790s, the country had been engaged in a titanic struggle with Napoleon’s France. To pay for the conflict, the government had borrowed on a massive scale. The cumulative financial deficit — the difference between […]
It is science, not lockdowns, that will save the world
The various new vaccines announced over the past two weeks give real hope of a return to normal life. Of course, many practical questions remain. How will these vaccines be delivered? Do they stop the transmission or simply the symptoms of the virus? Exactly how effective will they be outside a controlled trial environment? But […]
Lockdown 2.0: A creative destruction revolution, or the death knell of innovation?
So Boris Johnson has failed to follow his own government’s guidelines on cost-benefit appraisal. Study after study by economists show that the costs of lockdown far exceed the benefits. The NHS — the “envy of the world” — has conspicuously failed to develop sufficient capacity to deal with a second wave, despite having had months […]
The government must take back control of the Covid narrative
The word “narrative” is usually seen as being a posh way of saying “story”. But the idea of narratives is one which is gaining traction in economics. Last year, for example, Nobel laureate Robert Shiller of Yale published a book entitled “Narrative Economics”. He argued that it is the perception of events and the stories […]
Coronavirus fatality rates are way down – why has the government not taken this on board?
King Canute has had a bad press. The monarch sat on the beach on his throne with the deliberate intention of demonstrating to his courtiers that he could not stop the waves from coming in. But in popular thinking, he is the deranged king who believed he could control the sea. In this spirit, step […]
Sweden shows us whether lockdown was worth the economic cost
Did Sweden get it right in its response to Covid? There is increasing interest in this question. Contrary to widespread belief, the Swedes did introduce a few legally enforceable restrictions on behaviour. For example, public gatherings of more than 50 people were forbidden in March. Private ones were exempt from the ban. But, overall, compared […]
