A global epidemic can seem rather abstract, until someone you know personally is killed by it. Last week Emeritus Professor of Economics at Birmingham University Peter Sinclair died at the age of 73 from COVID-19. I and many other remember … Continued
A crumb of comfort during the 2008/09 financial crisis was the thought that we were living through historic times. But to face another historic event barely a decade later is perhaps a bit much. The financial – macro relationship The … Continued
The turbulent financial markets in early 2016 can be seen as a battle between two groups of ideas – the economists see little reason for sudden concern but the markets are worried about hidden risks * Global stock markets performed worse … Continued
Most economist agree on the causes of the repeated crises of the Eurozone but that explanation is not the one that many governments, and the European Commission, want you to believe. * The problems of the Eurozone – bank failures, … Continued
The fundamentals of global economic growth seem broadly positive but there are some reasons for caution, which can be understood through the savings-investment framework described in the previous blog. If savings are “too high” or investment “too low” then the … Continued
Macroeconomics is a complicated subject but it’s possible to understand quite a lot about the key questions in macro, and some of the policy challenges, by considering a few key concepts. This blog gives the elements of what ties macroeconomics to … Continued
Countries that had similar levels of economic prosperity two or three generations ago have diverged spectacularly. Getting economic growth right makes a huge difference to the lives of people. Here are two examples: The US and Argentina, and South Korea … Continued
I recently gave a presentation to the Cambridge China Business Network, a student club. The title is “Like dismantling a nuclear bomb: liberalising the Chinese financial system”. The slides are shown below. Summary Liberalisation of a market means removing most … Continued
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 … Continued
Long term interest rates, as captured by the yield on long term US Treasury Bonds, have recently swung upwards after falling for three decades. It’s still too soon to say that the long bull market in bonds has ended, because … Continued
The economics blogosphere and now the mainstream financial press are full of discussion about the flaws in widely cited research done by Professors Ken Rogoff and Carmen Reinhart. These authors produced an excellent and path-breaking book This Time Is Different which … 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
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