Tag Archives: inflation

In the past few days, I have read three pieces from Economists for Brexit - now renamed "Economists for Free Trade" - extolling the virtues of "hard" (or "clean") Brexit and calling for the UK to drop all external tariffs to zero unilaterally after Brexit. Two are written by professors of finance (Kent Matthews and Kevin Dowd). The third is from the veteran economist Patrick Minford.All three of these pieces wax lyrical about the benefits to GDP and welfare from unilaterally reducing...

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Inflation is back.Here is the change in the consumer price index (CPI) for January 2017, according to ONS: Well, this doesn't look too serious. CPI is barely reaching the Bank of England's target of 2%. It has been much higher for most of the last decade, and yet the Bank of England has kept interest rates at historic lows.But consumer price inflation - the prices that people pay for goods in the shops - is only one side of the equation. On the other side is producer price inflation (PPI),...

Brexit supporters have been severely critical of the OBR for its grim outlook for the UK post Brexit. The OBR is by no means the most negative of the professional forecasting bodies, and historically its forecasts have tended to err on the side of optimism, as Duncan Weldon observes. But it struggles to find anything good to say about post-Brexit Britain. In particular, it is distinctly negative about the future for Britain's external trade.Brexit is above all a shock to trade, since its...

New paper by Nate Cline and Perry. From the abstract: Several explanations of the ‘great inflation moderation’ (1982–2006) have been put forth, the most popular being that inflation was tamed due to good monetary policy, good luck (exogenous shocks such as oil prices), or structural changes such as inventory management techniques. Drawing from post-Keynesian and structuralist theories of inflation, this paper uses a vector autoregression with a post-Keynesian identification strategy to show...

I can't resist this. Blithely ignoring the utter mess he and his developers have managed to make of the cryptocurrency Ethereum, Vitalik Buterin has written a post on inflation and monetary policy. Wow. Is there no end to his talents? In this case, there is most definitely an end. Economics 101 is the end, pretty much. I don't claim to be the world's greatest economic expert - not by a LONG way - but the errors in this piece leapt out at me.  Firstly, inflation. Here is Buterin on...

Guest post by Ari Andricopoulos It is difficult to read the history of inter-war Europe and the US without feeling a deep sense of foreboding about the future of the Eurozone. What is the Eurozone if not a new gold standard, lacking even the flexibility to readjust the peg? For the war reparations demanded at Versailles, or the war debts owed by France and the UK to the US, we see the huge debts owed by the South of Europe to the North, particularly Germany. The growth model of the...

From the Federal Reserve Board press release: "The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. However, global economic and financial developments continue to pose risks. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the...

Working their way a bit higher but still seriously depressed:With the year over year CPI increase now only 1% the Fed can only wait and see if headline will catch up to core and ‘justify’ their tightening bias. Consumer Price IndexHighlightsThe CPI core is showing pressure for a second month, up a higher-than-expected 0.3 percent in February with the year-on-year rate up 1 tenth to plus 2.3 percent and further above the Federal Reserve’s 2 percent line.Gains are once again led by health...

Yesterday, HSBC prepared the ground for imposing negative rates on business depositors. This is an excerpt from HSBC's letter announcing the necessary change to the Terms & Conditions of HSBC business accounts:   Now, this requires some explanation. Firstly, the change applies only to BUSINESS accounts. Retail depositors are unaffected. Secondly, it applies only to currency accounts, not sterling accounts. And thirdly, despite HSBC's mention of "negative rates set by central...