Optimism and pessimism in Keynesian versus Marxist economics

My economics reading, aside from keeping up with the latest current affairs in economics, continues to be dominated by a mixture of Keynesian/post-Keynesian and Marxist ideas. I still find myself torn between the two in terms of which provides a more useful analysis of the capitalist economy and the government policies which are implied to improve economic performance while creating some measure of social justice. Continue reading

When and how will UK trade rebalance?

In my previous post, I suggested that for UK public (and private) debt to fall sustainably would require a dramatic shift in the current account from deficit to surplus, which would need to be maintained for a number of years. I also suggested that this seemed an unlikely scenario in the medium term. The UK current account deficit hit 6% of GDP in the third quarter of 2014 and has averaged over 5% for more than a year. Continue reading

How the UK economy can reduce its public and private sector debt

The UK’s current account deficit recently made the economic headlines, hitting 6% of GDP in the third quarter of 2014. Indeed, the BBC’s economics editor Robert Peston has been worrying about it for some time and commented on this statistic in his last blog before Christmas. As he says, the UK chancellor of the exchequer George Osborne and the Prime Minister David Cameron, publicly obsess about the public sector deficit, claiming that it is the UK economy’s major problem, but choose not to mention the current account deficit, which has been over 5% of GDP for 15 months. Continue reading