Letter from Dresden

The city of Dresden, capital of the Free State of Saxony, in the east of Germany, has a grimly melancholy reputation in the UK as the town most comprehensively destroyed by Allied bombing during World War II, a level of destruction with little military or strategic necessity. Over three days in February 1945 British and… Continue Reading

Letter from Shenzhen

I have at last visited Shenzhen, one of China’s four first tier cities (along with Beijing, Shanghai and Shenzhen’s neighbour Guangzhou), as part of the Cambridge EMBA International Business Study Trip. It’s a likeable and impressive city, much greener and cleaner than Beijing and less crowded than Shanghai. It’s also the centre of the Chinese… Continue Reading

Slow progress in reforming the IMF

The International Monetary Fund (IMF) is a great example of an institution that was created for one purpose – to police the system of fixed exchange rates set up in the 1944 Bretton Woods treaty – which has survived and evolved to do something quite different – provide emergency lending and financial advice to countries… Continue Reading

Improving prospects for market-based reform in China

Ahead of attending the Cambridge-Beijing Forum on market reforms in China, hosted by Cambridge Judge Business School next month in Beijing, I thought I should check the official Chinese government position. The Chinese Premier (head of the State Council, loosely “Prime Minister”) annually reports on the work of government to the National People’s Congress (NPC)…. Continue Reading

Meeting Merton

It is rare to meet your heroes. I wouldn’t exactly describe Professor Robert C. Merton as one of my heroes – I’m not sure I have any heroes actually – but he is somebody I admire greatly. He is probably the most distinguished financial economist in the world today. He won the Nobel prize (*) … Continue Reading

Suggested reading on China

I was recently asked to recommend blogs and other resources on the Chinese economy. In case other people would find it useful, I list the main ones here. Bear in mind that, not reading Chinese, I’m confined to English sources so there may be many excellent Chinese resources that I’m unaware of. A good start… Continue Reading

Rekindling the spirit of 1944?

The leader of one of our main international financial institutions argues that we need to remember and learn from the cooperative spirit in which the Bretton Woods international financial system was born in 1944. Unfortunately the creation and later success of that system depended on the economic and financial dominance of a single self-interested nation,… Continue Reading

Getting money right

It must be puzzling and exasperating to the general public that economists still seem so clueless about perhaps the most important and central topic in economic policy, the money system. Yet a lot of economic news is about the problem of money – not having too little but the money system. The Fed has been… Continue Reading

New evidence on the causes of the Eurozone problems

While the US and UK economies are both recovering quite decisively from their post-crisis recessions, the Eurozone is not. And unemployment is at appalling levels in much of “peripheral” Europe, particularly for young people. Current macroeconomic policy consists of low interest rates from the European Central Bank (ECB) but nothing like the quantitative easing we… Continue Reading

The international impact of abolishing China’s capital controls

Perhaps a little lost in the Christmas shopping rush was an interesting article in the 2013 Q4 Bank of England Quarterly Bulletin about what might happen when China finally abolishes all controls on its international capital flows, consistent with its stated policy goals. China has already had a very large impact on the international financial… Continue Reading

A new pamphlet on nuclear power policy in the UK

I recently contributed to a pamphlet on nuclear power, published by the think tank Politeia and launched at the House of Commons last week. The other two authors are Professor Roger Cashmore, Chairman of the UK Atomic Energy Authority, and David Mowat, MP for Warrington South and Parliamentary Private Secretary in the Cabinet Office. The… Continue Reading

British banks still need to work on their public relations

Outside a North Oxford branch of major British retail bank Lloyds Bank last Saturday, I saw a car parked on the “staff” parking place. Not just any car, but a Porsche. The people of Summertown (an admittedly prosperous area) might wonder how their banking business pays for a bank manager’s purchase of such an expensive… Continue Reading

The Raspberry Pi takes Manhattan

Every self respecting computer system has its own magazine and now it seems the Cambridge-grown Raspberry Pi has one too. The photo shows a segment of the crowded magazine shelf in Barnes and Noble’s shop in Union Square, New York, taken on a recent trip. The magazine even seems to have CJBS official yellow lettering…. Continue Reading

What the price to book ratio tells us about the health of Eurozone banks

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The central importance of housing to the British financial system

In Britain we seem to have a love affair with the property market. Home ownership is 69%, not especially high, but average house prices are a constant topic of discussion, mainly because property in the prosperous south east of  the UK (including Cambridge) is very expensive. The latest Bank of England Financial Stability Report shows… Continue Reading