Growth and distribution from top to bottom

My previous post focussed on the possible mechanisms which could underlie a sustained economic recovery in the UK. In particular, growth in productivity would allow real wages to rise, leading to rising consumption which in turn would allow household debt as a share of national income to fall over time. Continue reading

Mechanisms of sustained economic recovery for the UK

After a period of relatively good performance, UK economic growth appears to be easing up, and data from the global economy also shows a deterioration. In particular, the Chinese economy is slowing, while the news from the Eurozone is dismal, with the once apparently mighty German economy flirting with recession, and the rest of the area performing poorly, and struggling to recover. Continue reading

Complexity in economics and the effectiveness of different policies

Those on the right and left of the political spectrum frequently engage in debates over economic policies which they are seemingly unable to resolve, even with reference to ‘evidence’. This may be because the differing outcomes of various policies are determined by variables not included in the model they are considering. Continue reading

The importance of the welfare state in a capitalist economy

A capitalist economy, as it grows, goes through a process of continuous structural change. Jobs in some sectors are lost, as jobs are created in others. In a recession, the job losses dominate. In a boom, the jobs created do so. This is part of a process that allows economy-wide productivity to grow in the long run. Continue reading

The emerging markets slowdown and the need for an effective industrial policy

After being seen as the solution to the Great Recession and slow global economic growth, the progress of emerging markets and their catching-up with the rich countries has slowed. Continue reading