Does the productivity gap actually exist?

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Whoever wins the election tomorrow will have to grapple with what appears to be a fundamental economic problem. Estimated productivity growth in the UK is virtually at a standstill. The standard definition of productivity is the average output per employee across the economy as a whole, after adjusting output for inflation – or “real” output, […]

The so-called ‘output gap’: another piece of economic mumbo-jumbo

The concept of the’ output gap’ is central to mainstream macroeconomics. It is not merely of academic interest. The Office for Budget Responsibility (OBR) has a specific requirement to estimate the output gap, which it defines formally as “the difference between the current level of activity in the economy and the potential level it could […]

Why Can’t Debt Just be Inflated Away?

The debt problems which the UK and Europe currently face are essentially ones of political economy.  Basically, there is a lot of debt around and the simple question is: who is going to pay for it?  All the economic theory in the world does not get around this fundamental issue. Traditionally, bondholders paid.  The real […]