Paul Krugman shows in his blog yesterday how relatively minor is the current British debt to GDP ratio by historic standards. I’ve used the same data source (IMF historical debt database) to show the UK and US data, going back to … Continued
As if the dismal state of European political leadership weren’t enough, we have further evidence of the deepening problem on the other side of the Atlantic in Ed Luce’s article in today’s Financial Times. One sentence caught my eye in … Continued
I normally try to be optimistic but we are living in difficult times. The risk of a calamity in the European economy is alarmingly high. While catastrophes such as the pan-European slump we are now threatened with have multiple causes, … Continued
As the Financial Times shows today, German bund (government bond) yields are now higher than British gilts. This is not something that the UK should feel great about as it reflects a general pessimism about the Eurozone prospects and a … Continued
I mentioned in class recently that utility stocks are in some respects like bonds. Which prompted the question, do you value them like bonds then? No. Utility shares are still equities and must be valued as such, but they are … Continued
Martin Wolf reports in today’s Financial Times on a recent IMF-hosted conference on Iceland’s economic recovery. The main comparison is with Ireland: both are small, open economies where government borrowing was low but where massively over-expanded banks created a gigantic … Continued
An article in the Financial Times today explains how domestic public opinion in China constrains the government’s ability to contribute to a Eurozone bailout, even if it wanted to. China spends about the same on health care as Greece did … Continued
I’ve written and taught before on the problem of obsolete and decrepit infrastructure in the US (and UK). Each trip to New York confirms, depressingly, that things are getting worse. Even walking along Fifth Avenue you notice the uneven roads, … Continued
The late Professor Wynne Godley of Cambridge University, used to teach that one must be very clear about stocks (amounts of things defined at a point of time) and flows (volumes defined over a period of time, usually a year). … Continued
I was interested to see that the Grant family of Dufftown, Banffshire, in Scotland are collaborating on an MBA with Strathclyde University. The Grants are more familiar as the owners of Glenfiddich, the world’s best selling single malt whisky. And … Continued
On this morning’s BBC Radio Four “Today” programme, a generally unimpressive interviewee from HSBC said that “you don’t solve a debt problem by borrowing more” or something to that effect. He also used that dreary cliche about kicking the can … Continued
There is a growing view that if the Eurozone governments could come up with a large enough financial bazooka, it would stop the markets in their tracks and restore confidence. That view is nicely punctured by Simon Johnson (former Chief … Continued
British people have been known to play a rather childishly condescending game called “name five famous Belgians”. Part of the problem is some people thought to be French turn out to be Belgians in fact (such as TinTin creator Hergé). … Continued
In my Financial Institutions and Products course on the MFin, I give a brief introduction to national accounts and a way of thinking about macroeconomics that is relatively simple but allows us to explain a lot. It draws on the … Continued
President of the EU Commission, José Manuel Barroso, recently proposed a “Tobin tax” for the EU. Named after the brilliant economist James Tobin, this tax is on transactions in financial markets. Its deceptive attraction is that it is levied at … Continued