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Showing posts from October, 2018

A Budget Polemic

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As Budget Day approaches, Economists for Free Trade have taken it upon themselves to give the Chancellor some advice. They have produced a "Budget for Brexit", subtitled "An Economic Report". One might expect from this that the report would contain a comprehensive set of Budget proposals with Britain's forthcoming exit from the EU in mind, backed up by rigorous economic analysis.

With this in mind, I started reading the report. There was the inevitable introduction from Patrick Minford, as usual criticising the U.K. government for disagreeing with his forecasts. Fortunately, his comments were only a little over a page in length. And remarkably, he concluded with an appeal for the Chancellor to raise public spending:
It is an extraordinary thing that economists like us feel the need to encourage politicians to spend more money and cut taxes. Usually it is our role to discourage profligacy in the name of ‘economy’. However, the mantra of austerity has truly take…

Vítor unbound

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I always find the views of former policymakers fascinating, not least because of their tendency to become much more outspoken once they are out of office. Some express much more radical views than they did while in office: Larry Summers springs to mind, and Adair Turner. Others become critical of the institutions that they ran: Mervyn King, for example.

The latest former policymaker to reveal what he really thinks is Vítor Constâncio, Vice President of the ECB from 2010 to 2018. In a fascinating lecture at the London School of Economics, he discussed the causes of the Euro crisis, the policy responses to it, and what should be done to prevent such a disaster happening again. The entire lecture is on an LSE podcast (audio only, sadly), but Vítor released four of the slides from his presentation on Twitter, with brief comments.

The slide that has attracted the most attention is this one:





Many people seem to have interpreted this as some kind of mea culpa. And the slide does appear to …