Readers Question: I am also interested in Marxist economics and they seem to say the 2007-2008 crisis was a result of over-financialisation of the economy, and that investors/owners could not squeeze surplus out of other sectors in the economy as they once could. Financialisation of an economy refers to the situation where the finance sector …
I spent the last two weeks in New York, hence the lack of blogging. Fortunately or unfortunately, it meant I missed the last two weeks of discussion surrounding the legacy of Mrs Thatcher. Of course, in America, it was all a bit more black and white. – Mrs Thatcher good, Arthur Scargill bad (well America …
Readers Question: How sustainable do you think that the austerity measured imposed on European countries are in economic and political terms? This is a good question. Firstly, I feel there is a certain political appeal of austerity. See: Why is austerity politically popular? When austerity was introduced, there was a reluctant support for austerity – …
The post 2008 recession has seen the longest decline in real GDP on record. 55 months after the peak output of 2008, the UK economy is still 4% below it’s peak. By contrast, in the same time frame during the early 1930s, the economy had recovered to be more than 2% higher than the 1930 …
The problem: Cyprus debt to GDP ratio increased to 127% (Forbes) in the third quarter of 2012 Cyprus GDP growth in 2012 is estimated to be between -2 and -4% (estimate) The Cyprus economy has been hard hit by the slump in Greece – a major trading partner of Greece Cyprus made significant loans to …
A new series from the ONS shows an index of labour costs per hour. (this is an experimental series and looks as if it is not seasonally adjusted) Labour costs seem to be persistently highest in Q1. Labour costs per hour are primarily comprised of 1. Wage costs per hour but also 2. Non-wage costs. …
In the late nineteenth century, firms with great monopoly power were the US railroads and oil companies. These days we have a new set of monopolies, companies like Google, Amazon. For example, Amazon has over 30% of the online retail of books and DVDs. Also, a firm with a monopoly selling power like Amazon can …
Readers question: Why is the stock market peaking when the economy is doing badly? There is an old saying that the stock market has predicted 10 out of the last three recessions. Similarly, you could argue the stock market has been predicting several recent economic recoveries which haven’t really materialised. How to explain why the …