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It is my view that the greatest weakness of economics is the habit of drawing, or encouraging politicians to draw, macroeconomic conclusions from microeconomic reasoning (“the government budget, like a household budget, must balance”). This weakness is endemic within the profession. It is caused by the deliberate neglect of macroeconomics, including shameful neglect of Keynes’s monetary theory and policies; and by the dominance of microeconomics. Such skewed dominance is not accidental....

I wrote this post on the 21st April, 2018, for PRIME. “There are a significant number of households that are in so deep that the slightest sign of rough weather could see them in over their heads,” said Jonathan Davidson, one of the FCA’s directors of supervision. Given these imbalances, the biggest danger facing the British economy is this: at their meeting in May the Monetary Policy Committee of the Bank of England is very likely to raise rates – despite a warning from the governor...

On the 15th April, this year, I visited New Zealand at the invitation of the Institute of Directors, to address 600 CEOs at their annual meeting. This is an interview given to the journalist Rob Stock in which he asked about the possibility of another financial crisis. Related Posts

At the invitation of New Zealand’s Institute of Directors, I recently visited Auckland. I was there to address the IoD’s annual gathering of 600 CEOs..and on the side did this interview with NZ’s equivalent of the BBC, for a Sunday Talk Show with popular host, Wallace Chapman. It was good to be given fully 20 minutes to address a largely non-economist audience. Related Posts

from Olivier Favereau  Something has gone wrong in the European Union. Four examples bear witness to this dysfunction. How can it be justified that hundreds of thousands of letter-box companies have been allowed to develop, when the aim of these ghost companies is to evade taxes, labour laws and regulations? How can it be explained that European Court of Justice decisions authorized the restriction of employees’ fundamental rights in order to support business schemes whose very objective...

from David Ruccio While Amazon let it slip last week that its Prime program—the annual membership that offers discount pricing and free 2-day shipping—now tops 100 million members, there’s another number people might be curious about: the company’s average annual wage, which Amazon revealed in compliance with a new regulation that asks companies to show a comparison between an average worker’s wage and the salary of their CEO. Amazon has reported an average compensation for its...

from Peter Radford The future of work has become one of the most hotly debated and analyzed topics of the past couple of years. No one with a pretension of a serious nature or a desire to be seen opining on the “big” issues can afford not to have a point of view on it. Thus we are bombarded by an endless torrent of articles, books, academic papers, and speeches on the way in which the workplace will be changed by the emergence of  various technologies. The usual umbrella under which these...

from Lars Syll Both approaches to DSGE macroeconometrics (VAR and Bayesian) have evident vulnerabilities, which substantially derive from how parameters are handled in the technique. In brief, parameters from formally elegant models are calibrated in order to obtain simulated values that reproduce some stylized fact and/or some empirical data distribution, thus relating the underlying theoretical model and the observational data. But there are at least three main respects in which this...

I’ve always been wondering why small farmers enjoying ‘Fair Trade’ privileges are not modernizing faster in the sense that they invest and modernize, capture the market and do not need ‘us’ anymore. Yes, I know that many international trade rules are not exactly fair. And the words ‘Banana republic’ and ‘Banana wars‘ come from somewhere – the official phrase for such ‘politically enforced’ global value systems is ‘empire‘ (TTIP anyone?). But even then – why do many small farmers and even...