Economics

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,

Two years ago, the West thought it recognised what was happening in the Arab world: people wanted democracy, and were having revolutions to make that point. Now, recent events in Egypt have left many open-mouthed. Why should the generals be welcomed back? Why should the same crowds who gathered in Tahrir Square to protest against the old regime reconvene to cheer the deposing of their elected president? Could it be that the Arab Spring was about something else entirely? I believe so. The Arab Spring was a massive economic protest: a demand that the poor should have the basic rights to buy, sell and make their way in the world.

The Labour years can, in retrospect, be seen as a massive experiment into the link between cash and education. Gordon Brown almost doubled spending per pupil over the past decade, the biggest money injection in the history of state schooling. But as he did so, England hurtled down the international league tables. It now languishes in 18th place, according to the Organisation for Economic Co-operation and Development (OECD). The plan didn’t work. Only now is the full cost of that failure becoming clear. In an age when ‘work’ is increasingly something done with the head rather than the hands, education standards determine the wealth of nations. There is now enough