Economics

How do you sound clever and au courant in 2014? Easy. You talk knowingly about Capital in the 21st Century, the seminal, magisterial, definitive, landmark, pick-your-coverblurb-adjective book by French academic Thomas Piketty. It’s all about the growing gap between rich and poor, you see, and inequality is all the rage. No wonder: it’s fun to get all hot under the collar about the ‘mega-rich’ — especially if you’re secretly cushioned by the knowledge that you’ve got a bit tucked away yourself. Piketty (who must himself be making a mint) even topped the Amazon.com bestseller list last week, not bad for a such a big book on such a heavy subject. But

In his blog earlier today, Fraser Nelson argues: ‘The UK jobs miracle is happening mainly due to radical welfare reform – the type Labour ducked in office..Under Labour, record numbers of people in work were celebrate as an end in itself – but most of the increase was accounted for by immigration. So more jobs did not mean less poverty – not if a quarter of Glasgow and Liverpool were still languishing on the dole at the peak of a boom. This time, it’s different. The welfare reforms are restoring the see saw link between jobs and dole queues.’ I suppose I should by now get over the fact that

If you are reading this article online, perhaps you could go to the comments section and let us know what single slightly unusual item you have bought which has brought you the most reliable and lasting happiness. Perverse answers are welcome, of course, but I am not so interested in suggestions such as ‘a Thai bride’ or ‘a brewery’ or ‘“The Concert” by Johannes Vermeer’. What I am hoping for is a list of slightly unusual domestic or practical items which you might have bought on a whim or as a slight extravagance but which subsequently you found surprisingly delightful or life-changing to the point of boring your friends about

Google ‘the bread market’ and you get 135,000 hits, mostly from specialist food industry websites. Google ‘the property market’, however, and you get over 180 million. ‘The financial markets’ nets you 282 million. Seen like this, it’s unsurprising that capitalism has a reputational problem. The likelihood that the word ‘market’ is attached to any area of commercial activity is in direct proportion to the degree to which that category is seriously messed up. The idea that all ‘markets’ are effectively the same is perhaps one of the stupidest economic errors of the past 50 years. For a start, asset markets are not like other markets. As John Kay explains, writing in

It was back in 2001 that my good friend Jim O’Neill of Goldman Sachs coined the acronym ‘Bric’, short for Brazil, Russia, India, China. These were the emerging markets that were going to surpass the developed economies. And so they have. Well, nearly. I, too, am partial to a good acronym and it has always seemed to me very unfortunate that there isn’t a matching one for the four biggest established economies. According to the International Monetary Fund, these are currently the United States, Japan, Germany and the United Kingdom (based on last year’s GDP figures). I therefore propose ‘Juugs’. The rise of the Brics and the fall of the

 São Paolo It was back in 2001 that my good friend Jim O’Neill of Goldman Sachs coined the acronym ‘Bric’, short for Brazil, Russia, India, China. These were the emerging markets that were going to surpass the developed economies. And so they have. Well, nearly. I, too, am partial to a good acronym and it has always seemed to me very unfortunate that there isn’t a matching one for the four biggest established economies. According to the International Monetary Fund, these are currently the United States, Japan, Germany and the United Kingdom (based on last year’s GDP figures). I therefore propose ‘Juugs’. The rise of the Brics and the fall

Here is a graph that shows the four economic downturns Britain has been through (red lines) over the past forty years. What I find strking is that each downturn was preceded by the same thing: a surge in the growth of money (blue line). In other words, the bust followed an unsustainable credit-induced boom. The motives and justification behind monetary policy leading up to each boom/bust might have been different. In the early 1970s, monetary policy was shaped by Competition and Credit Control (CCC) reforms. In the late 1980s, those who decided monetary policy wanted to shadow the Deutschemark, then join the Exchange Rate Mechanism (ERM). After that unhappy experience, monetary

Despite ‘the age of austerity’, Britain still has a debt problem. That’s the conclusion of a new report from the Centre for Social Justice. It suggests that personal debt in the UK has reached a record high of £1.4 trillion, or 90 per cent of the UK’s economic output last year. That’s not happened overnight; but the debt level has increased steadily over the last decade: Breaking this down, the CSJ says that the average household debt is now £54,000 (nearly double what it was a decade ago). Thanks to the increase in borrowing, 5,000 people were made homeless last year due to mortgage and rent arrears. Christian Guy, director

It takes a lot to make the subject of immigration respectable for liberals, at least if you’re pointing out its problematic aspects. But Paul Collier, an Oxford economist specialising in the world’s bottom billion, has, in the 270-odd pages of his new book Exodus, opened up the issue for the left — well, for all comers, actually. Which, for a book suggesting among other things that, left to itself, there is no natural limit to immigration, is quite something. ‘The overwhelming reaction I’ve had,’ he told me, from his Oxford berth at the Centre for the Study of African Economies, ‘is that people thank me for making the subject discussable.

The maths of America’s financial problems are fairly simple. Every year the federal government spends more than it brings in so must borrow to fill the gap. This is fine when you’re young and healthy, with great prospects and you are borrowing to invest. But one day your lenders look at you and realise you’re not young and growing any more. You’re middle-aged and knackered. You are borrowing simply to spend and time is running out for you to pay back your debts. It’s an ugly moment for anyone, especially the most powerful country in the world. There are economists like Paul Krugman who argue that America is not like

The latest adaptation of one of Trainspotting author Irvine Welsh’s books is Filth  – a film so filthy that Deborah Ross had to ‘endure’ the film ‘from behind her hands’. But, somewhere amongst the ‘enduring’, she became ‘strangely hooked’, as Bruce Robertson (aka James McAvoy) led her through Edinburgh’s ‘dark underbelly of general horridness’. Filth may be ‘ghastly and unpleasant, but also kind of brilliant’, says Ross. Here’s the trailer: Breaking Bad started off with mixed reviews and an ‘uncertain future’, as it ‘dumbfounded viewers and critics alike’ – at least according to the economics professor Steffen Huck. But despite all of that, the series went on for 5 seasons,

I am surprised no more attention has been given to Martin Vander Weyer’s suggestion in The Spectator two weeks ago that a mansion tax should be levied on those buyers who pay no other UK tax. Why has it taken so long for anyone to raise this idea? Where tax paid against income should be set against tax paid on property? Let’s consider this question in psychological terms. Assume that you are eager to buy a particular house but someone else decides he wants to live there too. He is twice as rich as you are and so comfortably outbids you. Whatever the other person’s moral worth, you know two