Knowing and Making

Andrew Sullivan approvingly quotes Barry Eichengreen on Britain: [Britain] failed to develop a coherent policy response to the financial crisis of the 1930’s. Its political parties, rather than working together to address pressing economic problems, remained at each other’s throats. The country turned inward. Its politics grew fractious, its policies erratic, and its finances increasingly unstable. In short, Britain’s was a political, not an economic, failure. And that history, unfortunately, is all too pertinent to America’s fate. Now there's no doubt that Britain's political parties (once they got over six years of intensive cooperation during the war) did engage in a debate about how to run the country. Partly about its role in the world, but more importantly the nature and extent of the welfare state, the kind of industrial policy to follow, and how the education system and the country's infrastructure should be built. Its most important decision about its "role ...

With the imminent release of an 'Economy' category on the Wikio blog ranking site, it may be time for me to update my list of UK economics blogs . I hadn't even heard of a few of Wikio's top 20 (though as Richard Murphy points out at that link, some of them aren't really about economics). I'm pleased to be on the list and especially flattered by Paul Mason's comment here . Paul is perhaps the black sheep of the BBC's three main economics bloggers and all the more interesting for it, so I'm very pleased to hear he is a reader. The most surprising omission for me is Stumbling and Mumbling - Chris is one of the best economics analysts in the UK blog scene. And I'd have expected to see Tim Worstall on there, for his traffic levels and profile at least. They both seem to be listed under Politics instead. Congratulations to everyone on the list and I look forward to some friendly rivalry with you all in moving up the rankings. Update : By my...

The UK grew at an unexpectedly strong 1.1% rate in the second quarter, according to the ONS. Unexpected to the consensus of economists, that is - some of us are not so surprised. It has seemed clear - anecdotally, but from a wide range of conversations - that the economy has been fairly strong in the last few months - and with unexpectedly low growth in Q1, a rebound was already likely to show up the Q2 figures. This means that over the last year, the economy has grown by 1.6% - including a quarter of negative growth in 2009 Q3. If this quarter's rate is sustained - which it probably won't be - we will have almost 3% growth from October 2009 to September 2010. Even if it falls back to 0.7%, we will still have achieved a 2.5% growth rate. Despite George Osborne's sheepish attempts to take the credit - you can just tell that he knows better - this is a clear vindication of the last government's policies. Or rather, as Chris Dillow hints , it vindicates the last go...

Some news has been creeping in which gives us a picture of the British economy that's gradually becoming clearer. First, from the ONS via David Smith : Business investment for the first quarter of 2010 is estimated to be 6.0 per cent higher than the previous quarter. From the same source, some news on public borrowing: ...in December, the Treasury preducted public sector net borrowing for 2009-10 of £178 billion on the definition it uses. The latest figures from the Office for National Statistics show a downward revision to the outturn, taking it to £156 billion...At one time people were predicting figures as high as £220 billion. Recent growth estimates are decent (though not outstanding) too: Gross Domestic Product (GDP) increased 0.2 per cent in the first quarter of 2010, compared with an increase of 0.4 per cent in the previous quarter. There was a concern prior to the release that growth might be negative, due to heavy snow in January and February. So growth of 0.2%, thou...

Regular readers may be relieved to hear that I'll be back onto regular economics soon. If nothing else, even I will be bored of the election before long. But I have a couple more political articles to come first. The debate over forming a coalition to govern the UK seems to be mainly focused on the question of "who won?" Was it the Tories, because they are the largest single party with 36% of the vote (and 47% of the seats)? Was it a combination of Labour and Liberal Democrats, because together they represent over 50% of people? Or, similarly, the Conservatives and Liberal Democrats, who have about 59% between them? Should we reform the voting system so that the majority of votes always reflects a majority of parliamentary seats? All this debate ignores a deeper point. This is not a football match. The electoral system is not intended as a talent contest to award a prize to whoever can perform better and impress more people. It's meant to provide a way for the p...

Martin Wolf outlines what has to happen to get the UK's fiscal deficit under control while keeping the economy growing [note the similarity to Chris Dillow's argument a few days ago]: Policymakers must bear four points in mind: first, they must promote the essential strengthening of investment and net exports; second, they must realise that this big economic adjustment is a necessary condition for a durable fiscal improvement; third, they must also prevent the fiscal deficit from crowding out the needed rebalancing; and, finally, they cannot assume that today’s huge fiscal deficits can be comfortably financed indefinitely, should the rebalancing of the economy itself fail to occur. This is going to be a very tricky policy performance. I agree with the diagnosis. But it raises a different question which is not answered: why does not the market solve this problem? Some would argue that public sector borrowing itself causes the problem - if the government did not run a defici...

Dear Tyler I'm very much looking forward to reading Create Your Own Economy and even more encouraged by your offer on the blog today. And yet I have a dilemma. It seems that it won't be published in the UK until September (not in fact, as per amazon.co.uk , last February). I can order it now from Amazon US, but the estimated delivery time is 18-32 business days - which might take me nearly up to the UK publication date anyway. Unless I pay more for priority courier service than the price of the book. And that option - even if it still generates positive consumer surplus - just doesn't feel right. On the other hand, I can buy the CD version which is available in the UK and get it delivered next week. Or I can get an audio version online - but that isn't downloadable until Tuesday 14th. And anyway, either of the audio editions will take longer to consume than the hardcover version. I am pretty sure I can read faster than Patrick Lawlor can speak. Not as long, admitte...

Hidden amongst the noise and disruption of an astonishing day in British government are a couple of fascinating stories which have the potential to form the political landscape for years to come. But there's almost no time to act: the government must take steps within 48 hours to avoid being overtaken by events. The first story is the reshaping of the Cabinet into three new "councils". These are: National Economic Council: Economics and enterprise Democratic Renewal Council: Constitutional and political reform Domestic Policy Council: Public services These three new groupings provide a structuring framework for most of the Cabinet, with the exception of foreign, defence, European and international development policy - which may be a candidate for a future fourth council. The second story is Brown's appointment of more people from outside the House of Commons as ministers - Alan Sugar being the most visible - and his statement in today's press conference that we ca...

Robert Peston, famous among his blog commenters as the BBC's banking editor (with a sideline in other businesses) has come up with his most creative definition yet of a "business" - the UK government . He points out, in a surprisingly sanguine article, that UK government debt has been put on negative watch by Standard and Poor's. As he says, it's not that big a deal - I suppose the surprise is that it didn't happen earlier. As the UK is likely to be one of the world's top ten debtors in the next few years, with about £1 trillion of public debt (still less than Citigroup or RBS, incidentally, and much lower than the Japanese, US or Italian governments), it is only natural that people would keep an eye on the figures. S&P have said that the downgrade might happen if the next government does not come up with a credible plan to put the debt on a long-term downward trend. Seems fair - and everyone expects the next Chancellor, whoever it might be, to do exac...

The new EconDirectory.com rankings are out, and Knowing and Making has moved up to number 65 (based on visitors) and 68 (based on page views). In the UK, we are now the second most popular economics blog, behind Tim Worstall . The BBC and FT blogs do not publish their stats in this directory (Willem Buiter is on there but it's his pre-FT blog address), so it's likely that Stephanomics, Undercover Economist and Economist's Forum are ahead too - but we are definitely in the top ten. Thanks for all your visits over the last year, and if we can get ahead of Tim Worstall by the summer I'll buy you all a drink*. * Offer limited to those who turn up in the pub and collect it

I haven't found a list of UK-based economics blogs out there, so I thought I'd make one. Alphabetical order by name of blog: 2UBH : low-volume blog on economics among other things. By Tim Chapman Adam Smith Institute : highly free-market, not especially UK-focused subject matter but based in London Adam Smith's Lost Legacy : Free-market oriented economics blog written in Edinburgh, at the moment mainly providing commentary on other blogs Alex Singleton : Politics and economics within the Telegraph blogs stable Bluematter : Interesting links to economic and political news, and occasionally some analysis too Business Angel Blog : by charter, it's not about economics - but like many business blogs, it has crept recently into the more exciting territory of discussing the economic crisis Capital Chronicle : This isn't UK-based, but the author has some UK history and writes about British news frequently. The phrase "mustn't grumble" tips the balance ...