The German Finance Minister Wolgang Schauble has been a strong advocate of austerity, supply side reforms and ‘sound money’ policies. (i.e. sticking rigidly to inflation targets). Generally, this has been the preferred approach of Europe to the ongoing debt crisis and recession of the past few years. Recently, he has claimed that the European economy …
I often like to tease my parents because they both now both qualify for free bus travel – one of the many ‘perks’ of being ‘old’. Half-jokingly I say they are the lucky generation. Buying a house in the 1960s, enabled a massive increase in wealth. They benefited from an era of full employment and …
No one doubts the commitment of many in the EU to seeking a way to prevent the Euro breaking up. The Euro project is deeply embedded in the European establishment. But, are they fighting a lost cause? Are the structural problems with the single currency so severe, they would be better off pursuing an orderly …
On the day Spain, announced its unemployment rate had increased to a truly staggering 27%, many see the UK’s anaemic growth rate of 0.3% in Q1 2013 as a ‘success’. But, it is worth noting UK real GDP is still considerably below its 2008 peak. Dataset ABMI at ONS When you look at GDP like …
Readers Question: Why do countries that experience a boom risk losing international competitiveness? An economic boom implies that an economy is growing above its long term trend rate. This means that the rate of economic growth is high, but there tend to be inflationary pressures because demand is growing faster than supply. The impact of …
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 – …
Another guide to inflationary pressures is the producer price index (PPI). Producer inflation measures the price of goods produced by manufacturing firms. This is sometimes referred to as ‘factor gate prices’ In the year to February 2013 the output price index for home sales of manufactured products rose 2.3%. In the same period the total …