Robert Skidelsky
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Financial Times

Supply matters - but so does demand
Robert Skidelsky and Marcus Miller
FT | Monday, February 18, 2013

At long last, the defenders of George Osborne’s deficit-reduction strategy have come up with a reasoned case.
The thoughtful argument in support of the UK chancellor is made by Ryan Bourne and Tim Knox, economists at the centre-right Centre for Policy Studies think-tank. They say that Britain suffered a huge supply shock following the recession of 2008. This left it not only with reduced output, but also – by undermining the banking system and by causing a big increase in state spending and the national debt – with less capacity to produce output.
Since the problem is one of reduced capacity, Bourne and Knox contend, expansionary monetary and fiscal policy will not solve it. Policy should, instead, aim at raising the “medium term

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One more chance for Osborne to change course
Robert Skidelsky
Financial Times | Monday, December 03, 2012

On Wednesday in his Autumn Statement George Osborne, the chancellor, is expected to admit that it will take three more years of austerity than originally planned to bring borrowing under control. Extravagant hopes are being placed on Mark Carney, the newly appointed Bank of England governor. There will be talk of an incipient recovery meeting “headwinds from the eurozone” and comfort will be taken from the thought that things could be a lot worse.
Of course, the crises in Europe and elsewhere have not helped. But the reasons for the failure of austerity and of quantitative easing to revive the economy lie deeper than headwinds. The chancellor’s policy is based on the wrong theory of the economy; the BoE’s on the wrong theory of money.

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Enough is enough of the age of consumption
Robert and Edward Skidelsky
Financial Times | Wednesday, July 04, 2012

Until fairly recently economists envisaged three stages of economic development.
First, there was the stage of capital accumulation started by the industrial revolution. The Marxist historian Eric Hobsbawm called it the age of capital. Society saved a large part of its income to invest in capital equipment. The world gradually filled up with capital goods.
This stage, economists thought, would be followed by the age of consumption, in which people began realising the fruits of their previous frugality. They would save less and consume more, as the returns to new investment fell and the possibilities of consumption expanded.
Then would come the third and final stage, the age of abundance. With a surfeit of consumption goods, people

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How Keynes would solve the eurozone crisis
Marcus Miller and Robert Skidelsky
Financial Times | Wednesday, May 16, 2012

Almost 100 years ago, a young official in the UK Treasury sought to advise European policy makers on how daunting external debts might best be managed. There was, he argued, a limit to the national capacity to service debts. Those expecting further payments were bound to be disappointed. More than that, efforts by creditors to insist on further debt payments would be politically dangerous. “If they do sign,” he wrote to a friend, “they can’t possibly keep some of the terms, and general disorder and unrest will result everywhere.” He recommended a round of debt cancellation among European countries, a plan that would – at the stroke of a pen – remove much of the problem. When he was ignored by creditor governments, John Maynard Keynes quit

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Urgently needed: a plan C to save Britain’s economy
Robert Skidelsky and Felix Martin
Financial Times | Thursday, November 24, 2011

The Office for Budget Responsibility forecast in March that the UK economy would grow by 1.7 per cent in 2011, and that the government could meet its target of eliminating the structural deficit by 2014-15. But the economy has underperformed these forecasts by so much that it now seems growth will be little more than 1 per cent, and the target not achieved until 2016-17. A recent speech by David Cameron showed he was preparing to announce what a report from Barclays Capital neatly called “two years’ slippage in eight months”.
So we have embarked on Plan B – printing money, though only to a modest extent, a £75bn programme of “quantitative easing” announced by the Bank of England on 6th October. For those who never believed in Plan A –

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