I’ve written before about the dismal outlook for the western banks, suffering from overcapacity, increasing regulation and slow GDP growth (or continued contraction in the case of much of Europe). A new McKinsey report reinforces my pessimism. In particular McKinsey … Continued
It might seem straightforward to measure how much debt a government has. But it’s not that simple. First, we have to decide what is “debt”. We should obviously include debt securities and bank loans. But what about pension and insurance … Continued
One advantage of being an academic is that although you have no less work to do than people in “normal’ jobs, you have more choice of when to do it. So, after a long Sunday afternoon of marking, reviewing an … Continued
Since the definition of poverty is not having enough money, it might seem obvious that giving money to poor people is a good way to help them. But cash transfers, as they are known in the aid and development world, … Continued
I hadn’t ever wondered about why people save spare change in a pig-shaped china container. But the ever-interesting Federal Reserve Bank of New York blog Liberty Street has just told me. It seems that it originally had nothing to do … Continued
I make the point in classroom discussions of the US fiscal outlook that, simplifying only a little, the problem of US federal spending reduces to the problem of the US health care system. All rich countries face an increase in … Continued
Every country is unique but some are more unique than others. Japan, though quite obviously not located in the geographic western hemisphere, is part of “the west” as a group of rich democracies with advanced economies. Its inclusion is not … Continued
I’ve mentioned before the long running argument about whether The Wizard of Oz is in fact an allegory of the gold standard. Those who think it is point to the book having being written during the arguments about bimetallism (whether … Continued
An essential function of the financial system is paying for things. We take for granted the ability to move money from companies to employees, from customers back to companies and for a myriad of daily transactions. This aspect of the … Continued
It is supposed to be George Bernard Shaw who said that the UK and USA are “two nations divided by a common language.” Long established differences persist. Nobody in the UK says “gotten” anymore, even though it was normal English … Continued
A key feature of macroeconomic analysis is the relationship between a country’s savings and investment rates. Savings represent income that is not consumed. Investment means spending on assets that will last for some period of time, such as factories, houses, … Continued
To laugh often and much, to win the respect of intelligent people and the affection of children, to earn the appreciation of honest critics and endure the betrayal of false friends, to appreciate beauty, to find the best in others, … Continued
In economics and finance it is important to be clear about when we’re discussing a stock – the amount of something at a point in time – and when we’re referring to a flow – the volume of something during … Continued
Finance theory is rooted in the conventional neoclassical economics assumptions of how rational people approach risk. It assumes that people can mostly be thought of as having consistent preferences over outcomes, evaluated according to the probability of their happening. Rationality, … Continued
Although there is nothing much to rival the views from the top of the Empire State Building and GE Building (the “top of the rock”) the part of New York that has only recently become my favourite is more remarkable … Continued