Category Archives: Economics

Could China’s population halve by the end of the century?

Demography, the study of population, is one of the few areas of the social sciences where long term predictions (over one or more decades) can have some value. This is because the dynamics of population growth depend on the current age structure (how many young versus old people), which is fixed in the short term,… Continue Reading

What has the world economy ever done for us? – EMBA elective reading 2 (*)

A lot of people in the richer economies appear doubtful that economic globalisation has been good for them. But there are hundreds of millions in the rest of the world for whom globalisation has been a critical part of their escape from poverty. * Globalisation means the greater international movement of goods and services, finance,… Continue Reading

Populism then and now – EMBA elective reading 1(*)

Consider the following list of political facts: high and rising income inequality; a perception that global market forces are leaving local people powerless; anti-immigrant feelings; blaming banks and monopolistic corporations; a perception that politics is dominated by the rich; anxiety about culture and values being eroded. This might well describe the US and some European… Continue Reading

Perhaps money can buy you happiness

A lot of people believe that if they only had a bit more money – or perhaps a lot more money – then they would be happier. Many psychologists doubt this but some recent research on Swedish lottery winners suggests it is true. * Standard economic theory assumes that more of what you like is… Continue Reading

Is the US yield curve close to inverting – and does this mean a recession?

We have had a long period of economic growth since the great recession of 2009, leading many market commentators to fear a recession is overdue. One fairly reliable indicator of coming recession is an inverted yield curve – meaning that short term interest rates are above long term rates. This looks increasingly possible but is… Continue Reading

Why hyperinflation is thankfully rare

Venezuela’s economic difficulties include very high inflation which threatens to become another example of hyperinflation. But what is this and why is it historically quite rare? * Inflation in Venezuela has recently been reported as reaching 46,000% with the IMF projecting it could reach 1,000,000% by the end of 2018. An article in The Spectator… Continue Reading

Trade and the global economy

In part of my new MFin elective Understanding the Global Economy and Financial System I explore the changing views of economists on international trade, which has been one of the most powerful causes of global economic growth over centuries. * The traditional view of trade – correct but incomplete The reason why trade works is specialisation. If… Continue Reading

Why are some countries richer than others?

The first part of my new MFin elective Understanding the World Economy and Financial System next term will explore the question, why are some countries richer than others? * One of the most important, interesting but hotly contested questions in economics is, why are some countries richer than others? The world is astonishingly unequal; the life… Continue Reading

What is helicopter money?

The possibility that central banks might resort to extreme monetary measures, including helicopter money, is much debated in monetary policy circles. But what is “helicopter money”? * In normal times, central banks in developed countries try to control inflation and the level of economic activity by controlling the short term interest rate. But since the… Continue Reading

Key finance concepts: exchange rates

Exchange rates are among the most important macrofinancial prices, influencing many aspects of an economy. This post introduces exchange rates and their importance for macroeconomic adjustment * What is an exchange rate? An exchange rate is a ratio, the price of one currency relative to another. All prices are ratios, but normally they’re expressed in… Continue Reading

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