Springtime for America

Is America heading for a boom? Real GDP has risen for 13 successive quarters and now stands 3 per cent above its peak level. A net total of 4.8 million jobs has been created over the past three years, with a fall of half a million in the public sector being massively outweighed by the 5.3 […]

A quiz for the end of 2012

There are many puzzles about the economy, and in the holiday spirit a quiz is provided at the end. A bottle of champagne from me to the winner, the drawn will be from correct entries on the 31st. It might be difficult predicting the outcome of the fiscal cliff in the US. But at least […]

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 […]

A Tale of Two Recessions: Grounds for Optimism

The economic news at the moment is mixed, and the impact of the 2007-2009 financial crash is far from over. But looking back into the past may give us something to feel cheerful about. There have only been two global financial crises in the past century, that of the early 1930s and the most recent […]

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 […]

How bad is this recession?

A number of commentators have pointed out that this is the slowest recovery from recession in more than a hundred year.  Taking output measures this is correct.  But taking employment as the main measure of recession it is not. Both the 1980s and the 1990s saw much sharper job losses, while the 1970s recession saw […]

Ignore the IMF: Economic forecasts have a history of being unreliable

So the IMF has slashed its growth forecasts for the UK economy.  This august body has just pronounced that Britain’s economy will come to a virtual standstill.  Growth in 2012 will be just 0.2pc, compared with the IMF’s April forecast of 0.8pc growth.  It cut its 2013 growth forecast by the same margin to 1.4pc […]